Restaurant survey shows changing customer payment preferences

November 03, 2021

From online ordering and third-party aggregators to QR codes and contactless payment, we looked at the impact of the pandemic on hospitality businesses and consumer restaurant payment preferences in our Restaurant Payments Insight Survey.

 

The COVID-19 pandemic had a major impact on hospitality businesses, and food establishments experienced a crushing blow. As of December 1, 2020, more than 110,000 bars and restaurants had closed, either temporarily or permanently. And the restaurant industry ended the year with sales $240 billion below what the National Restaurant Association had forecasted pre-pandemic.

As safety guidelines varied by state and continually evolved, restaurants pivoted to add or increase takeout services. Many added delivery, curbside pickup, and outdoor seating, where space and weather permitted. And as many dining purchases moved away from in-person interactions to reduce contact between staff and patrons, e-commerce, digital wallets, mobile apps and QR codes became common.

We sought to understand the impact of the pandemic along with the latest consumer payment method preferences in our Restaurant Payment Insight Survey, conducted in July 2021.

 

The pandemic increased takeout and delivery 

One survey from the National Restaurant Association found 68% of adults in the U.S. are more likely to get takeout now than before COVID-19. Another report showed:

  • 61% of consumers now order restaurant meals online 
  • 58% order meals online more often now than before the pandemic 
  • 46% order meals through a restaurant aggregator (like DoorDash®, GrubHub® or Uber Eats®) more often than they did before the pandemic 

More than 60% of participants under age 50 prefer to order takeout or delivery online or via a mobile app.

“In addition to an increase in online, mobile, and contactless payments fueled by the pandemic, our study revealed that generational preferences are also driving a major shift in how consumers pay.”

Despite the growth in delivery, restaurant aggregators still struggle to make a profit, and more restaurant-friendly delivery options are emerging. This includes the growth of ghost kitchens: restaurant spaces designed solely to produce food for delivery. At the same time, complaints about high fees for third-party delivery services remain. 

  • TIP: Get closer to customers and eliminate third-party aggregator fees by offering an “on us” experience. 
  • TIP: Help to reduce fraud and payment acceptance costs by promoting “order online, pay in person” practices.

 

Changes in consumer payment preferences 

In addition to an increase in online, mobile, and contactless payments fueled by the pandemic, our study revealed that generational preferences are also driving a major shift in how consumers pay, whether dining in person or getting take-out.

Consumers between age 21-50 frequently pay for meals with a debit card, while older patrons choose credit. And not surprising, while 30% of people age 21-35 report paying via a digital wallet such as Apple Pay, this method was used by less than 10% of people older than 51.

Younger consumers also expressed an interest in the ability to pay for food via money transfer apps like Zelle and Venmo.

More than two-thirds (68%) of all participants reported having a pay-at-the-table experience when dining at a full-service restaurant. The desire for contactless interactions – coupled with staff shortages – led many restaurants to adopt QR codes for access to menus as well as for collecting payments. Over an 18-month period, use of QR codes increased 750%, and industry experts predict they are here to stay.

Interestingly, about half of participants – primarily those age 21-50 – either somewhat or strongly agree that they would be willing to pay a small surcharge for the convenience of using a credit card to pay for a food order directly from a restaurant. This allows operators to offset the costs of credit card fees and allows patrons to avoid the fees by switching to debit or cash. While less than 5% of small businesses in the U.S. that accept credit card payments implement a surcharge, that number has increased compared to five years ago, when about 2% were doing so. 

  • TIP: Expand payment options to align with generational preferences, especially digital options desired by Millennials and GenZ. 
  • TIP: Try surcharging, especially if average tickets are less than $25. Chances are that most customers won’t mind paying a small fee. The savings can really add up. 

 

A steady rebound emerged in mid-2021

While restaurants have had a tough time throughout the pandemic, as of July 2021, sales had risen for the seventh consecutive month. That month’s total was $6 billion, or 9.1%, above the February 2020 pre-pandemic figure of $66.2 billion. That growth is expected to continue. The National Restaurant Association predicts, “Restaurant sales will likely continue to be supported by healthy household balance sheets and consumers’ elevated pent-up demand for socialization and experiences.”

The pandemic has had a lingering effect on in-person dining, with half of respondents stating that they feel safer ordering food for consumption in their homes due to concerns with being in crowded spaces for long periods of time. And with so many more people staying close to home for work and school, an increasing number are cooking in more often than they did pre-pandemic, which could have a lasting impact on dining out.

More than six in ten (61%) survey respondents stated they are members of at least one loyalty program. Patrons overwhelmingly (78%) stated that they prefer a personalized experience and like to be rewarded with free food, though discounts are also popular. 

  • TIP: Offer take-away family meals or prepared meal kits as easy and affordable alternatives to cooking at home. 
  • TIP: Promote your loyalty program to encourage repeat business and reward patrons regardless of how they order: in person, online, or through a mobile app.

It’s clear that these new habits are here to stay. Restaurant owners should take the lessons learned during the pandemic to help drive innovation and build loyalty, while controlling costs.

Get a copy of the full report.

Related content

Webinar: Transform your business with automated payables

Webinar: How to stay safe from cyberfraud

Making the cross-border payment decision: Wire or international ACH?

What government officials should know about real-time payments

4 ways Request for Payments (RfP) changes consumer bill pay

Time is money: Intelligent Payment Routing saves businesses both

Innovative payroll solutions may help attract hourly workers

4 ways to make practical use of real-time payments

Can faster payments mean better payments?

Cybercrisis management: Are you ready to respond?

Dear Money Mentor: What is cryptocurrency?

Drive digital transformation with payments innovation

How to keep your assets safe

Want AP automation to pay both businesses and consumers?

Automate accounts payable to optimize revenue and payments

Webinar replay - The view from Europe: UCITS and ETFs in a changing world

Learn to spot and protect yourself from common student scams

Colleges respond to student needs by offering digital payments

3 ways to adapt to the new payments landscape

Integrated payments healthcare benefits

Higher education and the cashless society: Latest trends

Unlocking payment flexibility with intelligent payment routing

How the next evolution of consumer bill pay makes it easier to do business

A simple guide to set up your online ordering restaurant

ePOS cash register training tips and tricks

What corporate treasurers need to know about Virtual Account Management

Managing the rising costs of payment acceptance with service fees

Standardizing healthcare payments

How to spot an online scam

Consolidating payments for healthcare systems

The unsung heroes of exchange-traded funds

Tap-to-pay: Modernizing fare payments pays off for transit agencies and riders

Zelle® helps Sunriver Resort make payments efficient and secure

Role of complementary new channels in your payments strategy

What are exchange-traded funds?

Navigate changing consumer behavior with service fees

How blockchain technology is changing treasury

Inherent flexibility and other benefits of collective investment trusts

Enhancing the patient experience through people-centered payments

How COVID-19 is transforming healthcare payments

Ways prepaid cards disburse government funds to the unbanked

Restaurant survey shows changing customer payment preferences

Luxury jeweler enhances the digital billing and payment customer experience

How Everyday Funding can improve cash flow

Payment industry trends that are the future of POS

Modernizing fare payment without leaving any riders behind

Access, flexibility and simplicity: How governments can modernize payments to help their citizens

Webinar: Approaching international payment strategies in today’s unpredictable markets.

Understanding the role of authorized participants in exchange-traded funds

Webinar: Mobile banking tips for smarter and safer online banking

Unexpected cost savings may be hiding in your payment strategy

Webinar: How to fight off fraud

Webinar: Protect yourself or your loved ones from elder fraud

Authenticating cardholder data reduce e-commerce fraud

Addressing financial uncertainty in international business

Benefits of billing foreign customers in their own currency

How AR technology is helping advance payment processing at Avera Health

Increase working capital with Commercial Card Optimization

Top tips for card payments optimization

Fraud prevention checklist

The mobile app to download before summer vacation

4 ways to outsmart your smart device

Money muling 101: Recognizing and avoiding this increasingly common scam

What you need to know about financial fraud

How you can prevent identity theft

Banking connectivity: Helping businesses deliver the easier, faster, more secure customer experience of the future

4 benefits to paying foreign suppliers in their own currency

Crack the SWIFT code for sending international wires

Improve government payments with electronic billing platforms

ABCs of APIs: Drive treasury efficiency with real-time connectivity

Hospitals face cybersecurity risks in surprising new ways

Higher education strategies for e-payment migration, fighting fraud

How emerging banking solutions enable better decisions

Escheatment resources: Reporting deadlines for all 50 states

5 steps you should take after a major data breach

Cybersecurity – Protecting client data through industry best practices

Artificial intelligence in finance: Defining the terms

Why KYC — for organizations

How electronic billing platforms improve government payments

Key considerations for online ordering systems

MSTs: An efficient and cost-effective solution for operating a mutual fund

BEC: Recognize a scam

Fight the battle against payments fraud

The latest on cybersecurity: Vulnerability testing and third-party software

The password: Enhancing security and usability

Tactical Treasury: Fraud prevention is a never-ending task

3 timeless tips to reduce corporate payments fraud

Digital trends poised to reshape hotel payments

Three healthcare payment trends that will continue to matter in 2022

The surprising truth about corporate cards

Digital banking for business: How connectivity improves customer experience

Safeguarding the payment experience through contactless

How AI in treasury management is transforming finance

Automate escheatment for accounts payable to save time and money

Cashless business pros and cons: Should you make the switch?

Understanding and preparing for the new payment experience

White Castle optimizes payment transactions

Collect utility and telecom bill payments faster

3 reasons governments and educational institutions should implement service fees

Rent payments: What’s changing for commercial real estate

Rethinking European ETFs: Strategy wrappers and a means to an end

4 tips for protecting your business against Coronavirus-related scams

Proactive ways to fight vendor fraud

The latest on cybersecurity: Mobile fraud and privacy concerns

Buried treasure: Maximizing analytics for treasury management

3 benefits of integrated payments in healthcare

Webinar: AP automation for commercial real estate

Webinar: CSM corporation re-thinks AP

Webinar: A closer look at U.S. Bank AP Optimizer

The future of financial leadership: More strategy, fewer spreadsheets

Tech tools to keep your restaurant operations running smoothly

COVID-19 safety recommendations: Are you ready to reopen?

How to improve digital payments security for your health system

Government billing survey: The digital transformation of the payment experience

Enhancing liquidity management: 4 benefits of visibility

Top 3 ways digital payments can transform the patient experience

How to accept credit card payments without transaction fees

Webinar: Fraud prevention and mitigation for government agencies

Webinar: CRE Digital Transformation – Balancing Digitization with cybersecurity risk

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.