Is cash dead? It’s a question being pondered around the hospitality industry.
From a customer experience (CX) perspective, the main advantage of going cashless is the speed of the transaction. The ability to pay for something with the tap of a card or phone is a much more seamless experience.
Digital payments offer the opportunity for companies to harvest data on consumer preferences. The apps collected a significant amount of data through the payments, and they know exactly who our customers are and what they want.
One of the assumptions about switching to digital payments is that age is a major factor. People assume that digital payment is something for Gen Zers or Millennials and that Gen Xers or Baby Boomers will be less likely to relinquish the use of cash.
The burger chain Shake Shack recently made headlines when it announced plans to open its first completely cashless restaurant in New York.
Many other coffee shops, restaurants, and other hospitality operations around the world are making the same move. Cash brings many challenges to foodservice outlets; the cost of cashing up and banking every day, the lack of personalization options (as cash is anonymous), hygiene, and theft.
However, the biggest issue for foodservice operators is speed. Guests want to be able to pay for food and drink quickly, and cash has become the slowest payment option thanks to the arrival of mobile payment and the simplification of EMV/Chip & PIN/contactless card processing.
So is cash dead for hospitality operators? Are we getting close to the day when we can move exclusively to electronic payment methods?
In Oracle’s new report, Is Cash Dead In the Hospitality Sector? They asked over 15,000 consumers around the world about their use of cash and other payment methods in restaurants and other foodservice outlets.
The key takeaways:
- Only a third of global consumers think that cash will still be used in restaurants and other hospitality outlets by 2022.
- 54% of consumers expect to use cashless themselves over the next five years.
- 47% of consumers plan to use mobile payment and digital wallets more
The overall conclusion, according to Stuart Taylor, Senior Director of Global Payments at Oracle Hospitality, is that flexibility is key.
“Flexibility is essential. The hospitality sector isn’t the only industry facing the eventual disappearance of cash – economists and governments have been assessing the option for many years for reasons relating to crime and other drivers. So there are macro-environmental factors at play.”
“But what this report shows is that while guests of all ages are planning to use more mobile payment and less cash in coffee shops and restaurants and hotels over the next few years, plenty of millennials and pre-millennials still think that cash will be accepted in 2022.”
“So the conclusion for any hospitality operator is: Retain flexibility so you can adopt the payment mechanisms that work for you in your countries, and keep things simple as you move towards more electronic payment methods by reducing your PCI scope with a POS partner like Oracle Hospitality.”