In times of mobile payments, tips aren’t what they used to be

Mobile payments have also reached the world of tips. However, it is still necessary that both merchants and customers trust the new form of payment for that extra money to return to what it was.

It had to happen. At this point on the road it was inevitable that a tradition like this would end up yielding to the digital and electronic universe. Tips are changing. Those that we leave in the usual bar, after the game on Sundays or with morning coffee on Monday. Those pennies that were lost in our pocket and that used to end up in the waiter’s, will no longer be what they were.

Digital financial aid is no longer only raised to reward internet content through some options such as Dropcoin or ChangeTip, but now they go down to the mud of the most common payments to confirm that the digital age disrupts everything.

Physical money has already started to disappear from the wallet motivated by electronic cards, but now it is in danger of extinction due to the (quite recent) possibility of making payments with the mobile phone and leaving tips. Tips that can also be left digitally via an iPad at the point of sale. A strategy devised to re-float businesses that are in the doldrums and to give a new option to those who like to pay a little more than what the bill puts down and do not usually carry cash.

Photo: juantiagues

From MasterCard they explain to Think Big that they have detected a growing interest in some markets, such as the United States, to transfer cash tips to electronic payments. They believe that “it will depend on businesses and customers” if this happens in Spain. For its part, the consulting firm Gartner expects that, by 2017, 50% of payments made in the US are made with the mobile, which could justify a progressive move towards digital tips.

However, although in our country the process is slower than in the American one and the Spanish hospitality associations have not yet formed an opinion on the new tip models, some tools are beginning to make their way.

Zapper does it hand in hand with smartphones. It is a South African mobile application that already works in ten countries and that allows mobile phone payments in restaurants, cafes, bars and mobile food caravans. In Spain it operates since January of this year, used in nearly 1,000 small establishments and “it is working well despite the fact that southern Europe is still not used to paying with mobile phones,” explains Elisha Aswani, her spokesperson in our country.

Its operation is simple. You just have to download the app, enter and save the credit card number and scan a QR code provided by the establishment each time you have to make a payment. Afterwards, the application gives the option to leave tips in different percentages (0%, 10%, 12.5%, 15%…). According to Aswani, among all countries that use Zapper globally, tips are up 13% from the previous year.

Photo: Zapper

Flypay and Tip.ly are other tools that also allow you to leave tips through your smartphone. In addition, with the first, customers can order from the table, divide the bill among those who share it and choose tips of very different percentages. For its part, the second has the simple objective that consumers do not have a bad drink by not being able to leave tips when they do not have cash.

Even Starbucks already allows this option in its establishments in the United States because, according to Adam Brotman, its digital director, more than 11% of transactions in this chain take place with the mobile phone, and nearly 10 million customers use its application to make payments. In the meantime, Apple Pay does not currently raise the possibility of leaving tips, something that irritates some of its users.

Be that as it may, there is still a long way to go in relation to mobile payments, especially because merchants and users need to adapt to them and because, in order to use all these applications, it is necessary for the specific merchant to work with them .

Another option that is being promoted, especially in the United States, is the use of the iPad as a digital payment and tipping system, designed to replace the traditional cash register at the point of sale. The classic would disappear, but the tradition of tips, no.

The typical interface of the Apple tablet could also present on the screen several options to leave certain tip percentages, none or the specific amount that the user decides. Afterwards, the customer will pay their bill (and leave their tip) by bringing their mobile phone to an iPad reader to pay through an installed application (thanks to NFC technology) or with the same credit card.

Photo: Kai Hendry

Market analyst Justin Guinn, who has promoted a study on the present and future of tips using this type of technology, warns that it is important that establishments understand the positive effects that this new scenario can generate for their workers. In fact, it ensures that These systems can encourage increased profits even in non-tipped establishments usually (such as bakeries or clothing stores).

Photo: Boosphilly

Another option that was born to leave tips in a different way, without resorting to cash and preventing the customer from feeling obliged to do anything, is the DipJar system. Is about a kind of electronic jar (which works in 500 establishments in the US) in which customers can enter their credit card to leave 1 dollar (0.89 cents) each time they visit an establishment. In this way, the action is totally voluntary.

Ryder Kessler, co-founder of the company that markets it, explains that he launched the system after speaking with bartenders who explained how his tips had plummeted after most of his customers forgot their cash to pay by card.

Photo: DipJar

While traditional tips may not go away entirely, unless cash does, too, it seems undeniable that the journey to a world without coins is proceeding at full speed. However, there is still time for both merchants and consumers to get used to a scenario that has only raised the curtain.