Among the new reports released this week are two free reports for download from Mercator Advisory and Javelin Strategy & Research in partnership with the Electronic Payments Coalition.
The Mercator report: “Mobile Order and Pay Ahead: A New Sales Channel for Restaurants and Merchants” describes the new world of mobile order and pay and assesses how restaurant and merchants alike can best take advantage of this increasingly popular customer convenience.
Papa John’s and Pizza Hut said in 2016 that one-third of their sales were mobile ahead orders. Domino’s even has a Zero Click mobile app. Once it’s set up with your preferred pizza choice, just open it up—and think fast—you only have 10 seconds to cancel.
Starbucks and Dunkin’s Donuts also have very popular mobile order ahead apps. Starbucks announced that in the last quarter of 2016, 20% of its busiest stores’ sales during peak traffic times were mobile ahead orders whereas companywide, the corresponding figure is 4%.
Looking forward to the next two to three years, mobile order ahead sales will take off. Business Insider projects that mobile order ahead sales will surpass 10% of QSR orders and hit $38 billion in 2020.
The Javelin Strategy & Research and the Electronic Payments Coalition report: Small Merchants on Interchange: “Value More Important Than Cost” finds the Durbin amendment benefited the largest retailers while Main Street lost. These price controls have unfairly burdened consumers, community financial institutions, and small businesses. By restoring the free market, small merchants will have greater flexibility to find the debit card plan that works for them and their customers.
The study stands in stark contrast to claims from retail lobbying groups, which have argued that getting rid of the 2011 price caps for retailers’ would harm small merchants.
The Javelin study also found 66% of merchants are satisfied with what that they pay (only 11% were dissatisfied) and that small retailers are even happier “when they are allowed to choose additional benefits even at a greater cost.”
Additionally, the Javelin/EPC study also shows merchants prefer credit cards—no matter the cost of the purchase—over debit cards even though credit cards tend to have higher costs, further underscoring that price is not the driving factor for merchants.