For Karen and Frank Donatelli of New Hyde Park, who recently had lunch at Yesterday’s Diner in New Hyde Park, it was convenient to be able to pay their bill through a mobile device brought to their outside table.
The diner upgraded its point-of-sale, or payments, system a couple of weeks before Gov. Andrew M. Cuomo ordered a shutdown of all nonessential businesses in March, giving customers options to pay curbside, at outdoor tables and even through contactless payment apps like Apple Pay.
Besides convenience, the mobile system has another appeal.
"It’s safe," Frank Donatelli said.
That’s a big draw considering a recent Visa study found nearly eight in 10 consumers worldwide have changed how they pay in order to reduce contact due to COVID.
And many businesses are responding. "This shift to digital payments started before the pandemic, but has accelerated rapidly since COVID hit and is resonating across multiple generations," says Kevin Phalen, head of Global Business Solutions at Visa. U.S. millennials (84%), Gen Xers (72%) and boomers (58%) have made changes to the way they pay for items since the start of COVID-19, he says.
That’s why it’s critical for small- and medium-sized businesses to get their businesses online and digitize payment options — from buying online, picking up in-store or activating contactless, tap-to-pay offerings, Phalen says.
Visa expects 300-million contactless cards in the U.S. by end of 2020, Phalen says.
Still, while "cash is winding down…it’s going to take a very long time before we’re truly a cashless society," says Rick Oglesby, president and founder of AZ Payments Group, a Mesa, Arizona-based industry advisory and consulting firm.
Contactless payment and tap-to-pay solutions have been around for awhile but "consumer payment behavior typically evolves slowly," he says, adding COVID’s given "it a huge shot in the arm."
Oglesby said the key for merchants is offering "as many payment options as possible."
That’s what Yesterday’s Diner has tried to do.
As part of its point-of-sale upgrade, the business has a portable Clover system that allows it to take the device to cars curbside or outdoor tables where customers can tap their card on the device to pay, use a contactless app like Apple Pay or put their chip card into the terminal without having to enter the diner, says Anthony Gutierrez, a manager at the diner.
It made customers "feel safe with everything going on," he says, adding he’s utilizing solutions provided by UpNexa, a Holbrook-based merchant services firm.
John Lomax, CEO of UpNexa, says COVID has boosted the use of contactless payments. Pre-COVID, about 30-40% of its business clients were utilizing contactless payment features with customers and now it's over 80%, he says.
The newer point-of-sale systems provide multiple payment options like accepting contactless payment or using a QR code that allows a consumer to position their camera over the code and have the bill sent through a link to their phone, says Jeremy Kersaint, VP of sales at UpNexa.
During the pandemic, UpNexa also saw an uptick in businesses looking to upgrade their websites to accept orders and payments, Lomax says.
Costs to invest in point-of-sale systems vary and some providers offer terminals for free.
A full system on the lower-end could cost between $1,000 and $1,500 with monthly fees of $90-$100 to use the software plus payment processing fees of 1.5% to 2.75% per transaction, says Oglesby, who said costs range much higher for more robust systems.
Rob Appel, president of Malverne-based Automated Merchant Services, which offers payment solutions, says processing fees for the business don’t cost more using contactless payment vs. a traditional chip card.
He says contactless payment adoption has been slow over the years among mom-and-pops, with many not even realizing that when they upgraded to accept chip cards their systems already had that option.
When COVID hit he got dozens of calls from merchants looking to accept contactless payment and he informed them they already had that option for years.
Sapienza Bake Shop in Elmont was offering that option pre-COVID, but the shop's payment terminal was behind the counter and only accessible to employees so it needed another option, says Paul Sapienza, who owns the shop with his wife, Roseanne, and their son, Andrew.
Working with Automated Merchant Services, when COVID hit, they were able to run another line under the floor and position a second terminal at the counter so now customers have the option to pay via contactless payment without handing their phone or card to the employee.
Before it was infrequent but now "at least twice a day a customer uses their Apple Pay," Andrew says.
More than two-thirds of small- and medium-sized businesses (67%) have tried a new approach — whether launching an e-commerce site or changing point-of-sale technology — to keep their business on track.
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