Open Banking
Financial Services
Open Banking
Financial Services
November 12, 2020
5 Min

Contactless Payments and Loyalty Rewards Amidst Covid-19 Pandemic


Quick Service Restaurants  have always been leaders in adopting new payment options while traditional restaurants lag behind. Offering mobile and contactless payment options was a valuable strategy to speed up the service process — now thanks to the pandemic, it’s more of a necessity than a convenience. 


A recent report revealed that digital food orders increased 135% year-over-year in June 2020, with people over 65 adopting this method at rates more than 3 times higher than everyone else. 

Here’s what that means for the fast-food industry: 

Mobile Payments: Positive Outcomes for Quick-Service Restaurants  

Restaurants across the board are investing in contactless payment options to prevent the spread of COVID-19, protect their employees, and keep up with new regulatory standards. However these are not the only benefits the fast-food industry gets from updating their payments’ technology stack.


For example, contactless payments make the payment process faster, allowing restaurants to minimize lines, help more customers, and prevent overcrowding.This is even more relevant for chains with drive-thru locations. Offering a variety of payment options can also improve customer experience as everyone can use their method of choice to order food. This is particularly important during COVID-19 when many prefer contactless payment options for safety reasons. 


Encouraging people to pay using your app or website also creates more opportunities for customers to sign up for and participate in loyalty programs. This in turn can increase retention rates and lifetime value. 

The Future of Contactless Payments for the Fast Food Industry 

Like most industries, fast food started prioritizing contactless payment options in response to consumer fears and new regulations in the wake of COVID-19. Before the pandemic began, a mere 7% of businesses in the food and drink industry were completely cashless in the US. The percentage of restaurants that became truly cashless in 2020 peaked at 26%. 


With relatively low adoption overall, even with pressure from consumers and local regulations, it’s quite possible contactless payments won’t continue to grow much beyond the pandemic. However the restaurants experimenting with it now are best positioned to realize enough benefits to overcome the issues associated with contactless payments. 


Potential issues could include: 


  • Poor user experience — Mobile payment tools require users to sign up and create an account. This takes up peoples’ time and can contribute to poor customer experience, especially if the interface isn’t intuitive to navigate. Contactless payments should be easy to use to maximize adoption. 


  • More transaction fees — It’s possible adopting contactless payments can lead to higher card processing fees. Since these transactions go through global networks instead of an EFT debit network, transactions can incur more costs. The processing costs of cash purchases could also increase as a result of mobile payment adoption. 


  • Increased fraud potential — Contactless payments also increase the potential for both friendly and deliberate fraud. Friendly fraud happens when someone requests a chargeback from their bank, mistakenly thinking a legitimate transaction is one they didn’t authorize. These kinds of mistakes are much more common as people get more takeout and order ahead. Deliberate fraud can also increase, especially since banks tend to reverse transactions without question or contest from restaurants. 

Ensuring Success with Contactless Payments 

The 2020 pandemic pushed contactless payments into the forefront for every industry, food and drink included. While mobile payment options became more of a necessity this year, the long-term trend has always been to move towards offering more cashless options. Quick Service Restaurants that prioritize contactless payments right can avoid putting off the inevitable. The key to success is to start benefiting from offering mobile payment options while minimizing the potential negative impacts. 


Luckily, there are a wide variety of mobile payment solutions to choose from, some more or less equipped to mitigate the risks and challenges of contactless payments. Trustly’s Online Banking Payments solution is one of the best options to choose from, because it: 


  • Delivers frictionless  user experience — Instead of forcing users to set up an account, Trustly allows them to simply log in to their own bank account to complete the transaction. No card information or account and routing data is required to carry the transaction. This simplifies onboarding and reduces checkout abandonment by offering a quick and easy way to start using contactless payments. 


  • Eliminates Chargebacks — Trustly’s proprietary risk management technology guarantees each approved transaction, positively impacting the operator’s bottom line by virtually eliminating chargebacks. 


  • Minimizes processing fees — Trustly offers lower processing fees compared to other payment solutions. This is very valuable as credit card processing fees can fluctuate, going as high as 3.0%, and include hidden fees. 


  • Increases customer loyalty — Easy mobile payments make it possible for merchants to offer reward programs and encourage customers to participate. This in turn can increase customer loyalty long term, as consumers return frequently to benefit from rewards. Starbucks can illustrate the real value of mobile payment adoption, with 40% of their total sales now coming from their rewards program.


  • Reduces fraud — Bypassing risky card networks helps consumers make safe payments and merchants avoid costly fraud attempts. Online banking payments uses split-tokenization which changes payment information data to randomized numbers. This makes the data useless for fraudsters if they were able to access it. 


Trustly products include all the features Quick Service Restaurants need to adapt to COVID-19 requirements and safely implement contactless payments, as well as digital wallet and stored value capabilities. Trustly’s superior conversion rate, combined with its high approval rate maximize merchants’ revenues while its guaranteed payment offering protects their margins making it a trusted ally to operators in the food and drink industry. 

 If you would like to see how Trustly could help your business accept Online Bank Payments, feel free to reach out to us at 

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