3 Reasons to Expand Your Payment Options
Why franchisees should consider integrated software for payment processing.
By Mike Peters
Whether you’re a restaurant franchise, a beauty salon franchise or a cleaning company franchise, the ultimate goal is the same: drive sales, increase your customer base, build loyalty and enhance the brand, all while keeping costs down.
That’s no easy feat given the demanding job of running a franchise and the increasing competition franchisees are facing. This year, the number of franchises is predicted to increase by 1.9 percent, to 759,000 locations, after a jump of 1.6 percent last year, according to IFA.
To be successful in such an increasing competitive environment, a franchise must meet and exceed customer expectations, especially when it comes to the customer payment experience. Providing and supporting today’s emerging payment options, such as mobile pay, is essential. Ensuring a consumer’s data, as well as business data, is protected and secured is just as critical.
That’s where an integrated software platform can play a strategic role for a franchise.
An integrated software platform can provide specialized solutions for specific franchise businesses. It provides a cost-effective strategy as it can tap the internet, cloud, emerging devices and apps – all low-cost technologies – to keep up with emerging payment options that consumers want and expect.
One example is the table-top order and payment within the restaurant environment. Not only does a diner have fast access to order food – they can pay without having to wait on a server. On the business side, the payment solution requires less staff time, which translates to cost savings and greater workforce efficiency.
Here are three top reasons a franchisor and franchisee should evaluate an integrated software platform strategy.
Reason 1: Consumer Expectations
Consumers want to pay any which way they want – from cash to credit and debit cards, mobile device point-of-sale, wearable devices and digital wallets.
Cash, however, is quickly losing traction with consumers, so franchises need to provide the options consumers are seeking. Just 11 percent of consumers prefer cash, while 40 percent favor a credit card, according to a 2016 TSYS study.
Young customers – notably millennials and Gen Xers – are quickly adopting emerging payment options, such as mobile devices, in greater numbers every year.
An integrated software platform can also offer built-in encryption and tokenization security features – key technologies for protecting customer data. It can also provide EMV-capability – another level of data security. Such security is a consumer expectation these days, and few franchises can afford the cost and brand damage from a security lapse or breach.
Reason 2: Integrated Payment = Win-Win
An integrated software platform can also help a franchise reap the rewards of the digital payment trend and save money. That’s because digital payment is fast becoming the preferred consumer choice, and it’s much cheaper than older payment approaches. In fact, according to a recent Visa study, the average cost of processing a digital payment, is 57 percent less than the non-digital payment, and 78 percent of consumers rank digital payment as the top preferred option.
On the back end, an integrated payment strategy automates the manual accounting process, which means less work reconciling invoices or balancing ledgers. There’s no more manual entry of credit card information, resulting in a faster payment process for the franchise. It also shores up customer data protection, which is still a big concern for the consumer, as integrated platforms provide encryption and tokenization technology.
Reason 3: It’s a Digital World
Consider this statistic from a 2017 TSYS Payment study: the number of consumers who have made in-store purchases with smart phones has nearly doubled, from 7 percent in 2015 to 12 percent in 2017.
Consumers are increasingly tapping mobile devices for payment, and 26 percent are using AI-powered devices to get help from a customer service rep, shop, access news and information and entertainment. Of those polled, 60 percent would use a mobile device to make purchases or payments. That figure increases to 76 percent for consumers between ages 25 and 44, according to the study.
While cash will always remain a viable payment transaction, it’s not hard to imagine the credit card and debit card swipe going the way of check writing at some point – sooner than you may think – as emerging payment options grab consumer traction.
Franchisors and franchisees must be ready to provide what their customers want and expect when it comes to the purchase experience as they strive to keep security strong and spending down. Payment processing technology is moving fast, and the franchisee must embrace it as fervently as the consumer.
Mike Peters is Executive Vice President of Partner Solutions at TSYS Merchant Solutions. He has worked in the financial services industry for more than 38 years. Learn more about TSYS.