The gastronomy is under financial stress due to inflation and the economic downturn, with revenue growth forecasts for 2024 cut to 3.8% from previous estimates.
While companies are struggling with liquidity problems and changing consumer demands, Real-time payments as a tool to improve financial stability and customer satisfaction, according to the PYMNTS Intelligence Report “Real-time payments: The necessary cash flow scrub for every restaurant.”
Increase your profitability through real-time payments
Real-time payments systems are proving to be a game changer for small restaurants as they increase profits and operational efficiency. Small to medium-sized restaurants that use instant Payment by bank and platforms like PayPal reported higher net profit margins – over 50% – compared to those who used traditional methods such as checks or automated clearing house (ACH) transfers, which come with lower profit margins, the report said.
40% of independent U.S. restaurants that generate $10 million or less annually now use real-time payments, citing ease of use and speed as benefits. Fast transaction processing also reduces administration and saves time, further increasing operational efficiency.
But there are still hurdles to adoption. Many restaurant owners consider real-time payments complicated or risky. About 34% of non-adopters said it was difficult to implement, while 32% expressed concerns about the risk of fraud – misconceptions that industry experts say are exaggerated. Overcoming these barriers through education and better integration could improve real-time Complaint against payments among the restaurants Small and medium-sized enterprises. Improved provider support and clear guidelines could help address these concerns and enable wider adoption.
Improve cash flow to avoid business closures
Cash flow Problems are a constant challenge for restaurants and often lead to defaults and financial instability. Ohio’s Melt Bar & Grilled and Chicago’s Kuma’s Corner filed for bankruptcy, highlighting the sector’s vulnerability to economic pressures. Real-time payments offer a solution by improving cash flow and reducing transaction fees. Data from PYMNTS Intelligence found that 76% of small and medium-sized restaurant businesses that used instant bank payments reported strong financial health, compared to 58% of those that did not.
Additionally, 68% of real-time payment users benefited from a healthier balance sheet. This technology enables instant access to funds, facilitates daily expense management, reduces overdraft risk, and improves overall financial stability. By ensuring timely payments, restaurants can better manage their supplier relationships and avoid disruptions.
Meet customer expectations for speed and convenience
Today’s guests expect faster and more convenient payment options, forcing restaurants to adapt. While digital menus are QR codes received mixed reviews, QR code payments shortened the average restaurant visit by 15 minutes and increased tips by 10%, PYMNTS Intelligence found. By integrating real-time payments into these digital solutions, restaurants can further optimize the dining experience. Investments in payment technology are increasing, with 52% of restaurant operators planning to modernize their back-office technology, 41% focusing on contactless ordering and payments, and 25% on self-service kiosks.
By speeding up transactions and improving customer satisfaction, real-time payment systems not only streamline payment processes but also increase table turnover. This can lead to higher revenue and strengthen customer loyalty in a competitive market.
