3 BENEFITS OF DIGITAL TIPS AND PAYMENTS

16 noviembre 2020

3 BENEFITS OF DIGITAL TIPS AND PAYMENTS

A number of trends have come and gone in response to the pandemic, from TikTok takes to sourdough starters. Among the ones taking a hold in the restaurant industry: digital tips. The pandemic has propelled the adoption of contactless payments, which has naturally played a role in paying for the increased demand for food delivery. In an effort to minimize contact, consumers have relied heavily on mobile and online payments to place orders. Compounded by consumer reluctance to pay in cash, cash has fallen by the wayside.

While restaurants have used same day payments of cash tips as an incentive for recruiting and retaining employees, the reliance on digital, contactless payments has led to restaurants to pay their employees digitally. And just like contactless payments and delivery, this solution is rapidly growing and will be here to stay across restaurants and other tip-based industries. Here are three major benefits for making the switch now:

Minimize risk and trips to the bank.

Whether dining in, picking up, or placing a delivery order, consumers are paying and tipping via credit or debit card. This leaves limited cash in the till, and drivers and service industry employees, who made good money in cash tips, are seeing their income stream disappear overnight. Store managers now have to scramble and make trips to the bank or the ATM to get cash in the hands of these workers or have to inform them they have to wait two weeks to see their tips on their pay stub.

Rather than leaving employees out of commission or forcing them to come in-store to pick up their earnings when they’re finally available, employers can offer digital tips and eliminate the delay by pushing those funds to employees’ bank accounts or paycard. Digital payments also help reduce the risk of holding too much cash at one location, as they make businesses vulnerable to higher levels of theft, loss, and administrative time. Plus, you’ll minimize the back and forth for your employees. Employees have a consistent, contactless way of receiving their tips, wages, and mileage.

While these functions are automated, you have control over the cadence. Most digital tip solutions offer an easy way to transfer data, including plugging directly into POS systems to get accurate, up to date information. Since digital tips move at the speed of the data, tips can move as quickly as you’d like them to move — whether that’s while an employee works or at the end of every shift.

Save money (and paper too!)

While the vast majority of employers tend to pay their employees via direct deposit, the restaurant and hospitality industries still have many unbanked or underbanked employees. That means that many workers still receive their pay via paper check. Creating and distributing a check to just one employee can cost as much $4-$6 per paper check. Depending on the number of workers receiving paper checks, that can add up to thousands of dollars spent each pay period. Digital payments allow businesses to eliminate the costs associated with purchasing and distributing paper checks, in addition to offering a more eco-friendly way to pay.

Save additional time and resources by finding a solution that does not require pre-funding or cash reserves. You’ll be better able to distribute funds without delay while maintaining current payroll processes.

Offer employees a compelling benefit.

Paper checks don’t just cost employers money, they cost your workforce money too. Employees without a bank account can pay up to $5 to cash a check. Especially within the food service and hospitality industries where many employees live paycheck to paycheck, that extra money can impact an account. A recent survey found that nearly 80 percent of hourly workers reported having less than $500 saved for an emergency and 52 percent reported $0 in emergency savings, a 12 percent increase from last year likely due to the pandemic.

Plus, paper checks are slower. With digital tips and payments, employers can pay as quickly as their employees need them to, without disrupting their pay cycles. Especially as the pandemic has led to fluctuations in income and opportunities for work, access to earnings is increasingly important for employees to meet their basic financial needs and unexpected emergencies. This kind of offering not only helps employees but also stands out as a compelling benefit and differentiator for attracting and retaining talent.

When evaluating a solution that allows you to distribute digital tips, wages, and other payments, consider one that works in the interest of both you and your employees. While many solutions provide a free offering to the employer, some often then pass that cost onto the employee. Make sure that your solution provides a fair, transparent solution for your employees too.

As we’ve learned from the past year, businesses that invested in these trends earlier on were better positioned to survive and navigate the challenges posed by the pandemic. Convenience and ease are key—and not just exclusive to the consumer experience. By making sure you and your employees have an easier way to distribute and receive payments, you’ll deliver greater efficiency and cost-savings all around. Companies that aren’t able to quickly adapt will either fall behind or still have to invest in the infrastructure while their competitors surge ahead, taking additional time, resources, and money. By adopting digital tips and payments, you’ll be a part of the businesses leading innovation rather than playing catch-up.

About the Author:

Ahmed Siddiqui is the VP of Product at Branch, a fintech company that partners with employers to help working Americans grow financially. Before joining Branch, he served as VP, Product at Marqeta, a payments technology Unicorn valued at over $4.3 Billion. In addition to building the next wave of fintech startups, Siddiqui is the author of The Anatomy of the Swipe: Making Money Move.

Source: hospitalitytech.com

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