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.

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