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The Spoon

Daily news and analysis about the food tech revolution

cashless payments

Chick-fil-A Goes Cashless in Some States, Raises Questions About the Model

Chick-fil-A restaurants in Florida, Indiana, Georgia, Virginia, and Maryland have pivoted to a cashless business model, according to Restaurant Dive. The switch is an effort to stop the spread of coronavirus as Chick-fil-A continues to operate takeout, delivery, and drive-thru and dining rooms remain shuttered.

The move also reignites the debate around cashless business models. On the one hand, an all-digital payment model makes for more precise accounting and safer places to work (you can’t rob a handheld scanner like you can a til.) The other side of the argument is that cashless models discriminate against the millions of underbanked and unbanked individuals who may not have a checking account and need to use cash for their transactions. Some places have outright banned the model, among them NYC, Philadelphia, and the entire state of New Jersey.

That was pre-pandemic, though. In recent weeks, other restaurants besides Chick-fil-A have also moved to cashless models in response to COVID-19, including the Castellucci Hospitality Group, which operates several restaurants in the Atlanta, GA area, and the Tender Greens chain.

Prior to the pandemic, the argument over cashless business seemed fairly cut and dry: the benefits of the model (speed, convenience) didn’t outweigh the downsides (classism).

But no one needs a crystal ball to understand that this global health crisis we’re in will permanently change many of our shopping and eating habits away from the house. Even when restaurant dining rooms open again, it’s likely that tables will be spaced much farther apart, cleaning and sanitizing standards will be twice as rigorous (and they were already pretty rigorous), and large restaurant chains will implement other ways of convincing customers they can order safely. Contactless delivery is already here to stay. It’s not difficult to imagine cashless payments will also stick around in some states — though perhaps not without great debate.

Of course, swiping a debit card or paying with a mobile phone won’t ensure a completely germ-free experience, which is why we may see a lot more chains pushing harder for customers to use their mobile apps. On Chick-fil-A’s website, for example, customers are “encouraged to utilize mobile ordering and mobile payment through the Chick-fil-A app.” We may also see brands start to funnel more money into more robust mobile platforms that reward customers for ordering and paying through the app, much like Starbucks does.

None of that solves the fundamental problem with cashless payments, and not even a global pandemic will magically make it possible for millions of people to get bank accounts. Even so, the current situation we’re in may shift the weight of this particular debate in the coming months, for better and for worse. 

Week in Restaurants: NYC Bans Cashless Stores, Saladworks Launches Ghost Kitchens

Amid all the constant talk about the promise of restaurant technology and the so-called seamless customer experience, it’s important to remember that the era of the digital restaurant has to be inclusive to everyone — even those who may not have a bank account or smartphone. That conversation was reignited this week when the Big Apple announced plans to ban cashless business models. Read more on the issue below, as well as new ghost kitchen operations and the latest tech initiative from one of the QSR scene’s biggest tech advocates.  

NYC to Ban the Cashless Business Model

The New York City council voted on Thursday to ban cashless businesses — that is, those only accepting card or digital payments. Councilman Ritchie Torres, who surfaced the issue back in 2018, drafted the bill, which takes effect 90 days after it was signed and makes it illegal for stores, restaurants, and other businesses to refuse cash-paying customers. Some businesses have pushed back on the bill, saying the cashless model allows them to keep better track of finances and also present a more seamless experience for customers. Of course the other side of that argument is that cashless stores discriminate against the unbanked and underbanked population, which numbers in the millions in the U.S.

The NYC ban follows similar moves by Philadelphia, New Jersey, and San Francisco.

Saladworks Launches Its First Ghost Kitchen

Fast casual chain Saladworks announced this week it has signed on with Kitchen United to operate a ghost kitchen out of the latter’s facility in order to speed up and streamline off-premises orders. The move follows another announcement by Saladworks from December that the chain plans to have multiple ghost kitchens and potentially even launch new food concepts like “Sandwichworks” and “Pizzaworks.” The ghost kitchens are slated to open in Chicago, IL, Austin, TX, and Scottsdale, AZ.

McDonald’s Launches Career App for Employees

McDonald’s launched a career-focused mobile app this week that helps employees “maximize education benefits and take the next step in their professional journey,” according to a press release. The app was created in partnership with the Council for Adult and Experiential Learning and Inside Track. Through it, restaurant workers can connect with advisors and coaches as well as take an assessment on their career interests and opportunities, both at McDonald’s and elsewhere. The app builds on McDonald’s Archways to Opportunity program, which helps employees earn diplomas, get help with tuition, and improve English-language skills, among other things. It may also help McDonald’s improve retention among its staff by helping them “move up the ladder,” so to speak, through more in-depth career opportunities. 

Domino’s Is Testing Cashless Payments in Australia as Debate Over the Model Rages On

While the battle over cashless payments is still heating up in the U.S., with companies like Sweetgreen and Amazon backpedaling from the model, other parts of the world tell a different story. Case in point: mega pizza chain Domino’s is testing cashless payments in Australia with a new program called “Tap & Take.”

With the program, Domino’s customers ordering both takeout and delivery will only be able to use their card or contactless payments like Apple Pay to purchase their pie. Domino’s is testing this program out in five locations around Australia, with plans for further expansion down the line.

The company cited reduced wait times in lines and employee safety as key reasons for kickstarting such a program. The safety issue in particular is one of the biggest arguments in favor of cashless business models. After all, you can’t successfully rob a store that doesn’t keep cash on the premises.

To be sure, certain parts of the world are moving closer to a cashless business model. In Canada, the value of cash payment transactions has decreased by 21 percent since 2012, according to recent reports. China steadily marches towards becoming a cashless society, with a heavy focus on mobile payments and technology over bank notes and even debit cards. And there’s Sweden, where according to a recent survey only 13 percent of the country uses cash to pay for transactions.

Elsewhere, though, and especially in the U.S., the cashless business model has received so much backlash it’s been banned in whole cities and forced Amazon to overhaul its entire Amazon Go store concept. The main beef against the cashless model is that it discriminates against underbanked and unbanked populations, who don’t always have a bank account and who rely on cash to make day-to-day purchases. There are also people in the world who still simply prefer to pay for goods in cash as a matter of principle.

A Domino’s spokesperson acknowledged as much when speaking to the New Zealand Herald this week, saying “We’ve certainly considered that some people prefer to use cash, which is why we are running this on a trial basis and welcome feedback from customers, especially regarding how seamless and convenient they find this makes their Domino’s experience.”

Domino’s, anyway, dabbles in everything from chatbots to driverless pizza delivery to location-based technology to deliver pizzas faster and more efficiently. It’s not so surprising the company would pursue a tech-driven payment model as another means of accomplishing the same goal. Doubtful the “Tap & Take” program will reach the U.S. anytime soon, but it’s entirely plausible someplace like Sweden or Canada could be next on the pizza-turned-tech-company’s list, should the trial program in Australia prove successful.