Which payment options should your restaurant have? A look at GrabPay, FavePay and More
As of 2019, 77% of Singaporeans have already hopped onto the mobile payment bandwagon, and transaction volumes are growing daily.
Customers simply open their mobile payment app, scan the QR code provided by your restaurant to pay, and you’ll get a payment confirmation on your payment provider’s merchant interface once they do. It’s as simple as that – little wonder it’s one of the biggest, most thriving tech trends in recent years.
Considering adding digital payments to F&B business strategy? We’ll be looking at 3 of the most popular digital payment options in Singapore, namely GrabPay, FavePay, AliPay, and WeChat Pay, as well as bank-based apps:
Operationally, it’s got all the essential features a modern POS system would have – all GrabPay transactions are recorded in real time, and you can review reports like the total daily/ monthly transactions as well as details of individual transactions on the GrabPay Merchant app.
Choose to cash out at the end of each day, or when your GrabPay transactions hit a certain limit.
And the best part: transaction fees are only 1% + GST, GrabPay merchants share. In other words, your transaction fee for a $100 bill would be only $1.07.
Find out more about GrabPay for merchants here.
FavePay works quite similarly to GrabPay in terms of managing payments.
In addition, as long as you’ve activated FavePay as a payment method, you’ll be able to access FaveBiz, a business dashboard with data and actionable insights about your customer and business performance.
FavePay can also offer customers cashback for every transaction, which they can then use on their next visit to your restaurant. This gives them more incentive to return, improving customer retention. (Think of it as the good ol’ loyalty card, but without all the hassle for both you and your customer!)
Fave charges a 1% flat commission fee + GST, for every FavePay transaction. Cashback earned by customers is also borne by you.
For example, The Black Hole Group’s Working Title - Burger Bar offers 5% cashback on FavePay, meaning their transaction fee for a $100 bill would total up to be:
1% commission fee = $1
7% GST on commission fee = $0.07
Cashback earned by customer = $3
Total = $4.07
Not that the cost of the cashback is payable in your transaction fees whether or not the customer returns to your restaurant to utilise it. That said, the folks at The Black Hole Group say it's a good marketing spend, enabling them to reach Fave's pool of users.
Find out more about FavePay here.
AliPay and WeChat Pay
If your business is in a location that enjoys high tourist football, also consider AliPay and WeChat Pay. These apps dominate payments amongst Chinese tourists in Singapore, since they’re unlikely to have local-centric payment apps such as GrabPay or FavePay.
To set up AliPay and WeChat Pay for your F&B business, you’ll have to engage a third party payment service provider. Since your AliPay and WeChat Pay customers pay in RMB, these providers can help to transfer the payment back into your Singapore-based business bank account. Find the list of third party providers here.
This comes at a small additional fee, of course. For instance, Adyen takes a fee of 3% + $0.12 per transaction.
Mobile banking via PayNow is powered by various banks in Singapore like OCBC, UOB, and DBS.
If you have an existing corporate account with your PayNow payment provider, you can easily link them up. Have your earnings automatically sent to your bank account daily, or make deposits whenever you need to.
And, of course, you’ve got the powerful tools that allow you to track all of your incoming payments, business performance and more.
Transaction fees differ from bank to bank. Fees are waived until 31 December 2022 for OCBC, and until 31 December 2021 for UOB and DBS.
A quick comparison…
If you want to streamline your payment options to just a few of the best ones, here’s a quick overview:
Of course, there are tons of other mobile payment options available in Singapore other than the ones listed above.
Enter SGQR, a single QR code that contains multiple e-payment options. Once you pick which of the various e-payment schemes to go with, you'll have it all condensed into this:
If you’re completely new to adopting digital payments, your chosen payment provider will register an SGQR on your behalf; if you’re adding on another digital payment method to your existing ones, it’ll simply be added as a payment method to that QR code.
Note that although it’s a single SQ code, payments made via this code will be credited to the respective payment provider – for instance, if a customer pays $30 through GrabPay and another pays $50 through PayNow, the $30 and $50 will be credited to your GrabPay Merchant Wallet and PayNow business wallet respectively.
Why accept mobile payments?
Adopting mobile payments can do more for you than, well, the payment stuff. You’ll find it much easier to market your F&B business, improve customer experience, and, most importantly, boost your profits:
Low set-up costs
In most cases, your set-up costs will practically be zero. To sync these digital payment methods to your existing POS system, simply add each method to your POS system, and select that option – the same way you select ‘cash’ or ‘card’ – when your customer pays via that particular method.
If your POS terminal can’t process digital payments, chances are, a simple software update would do the trick. Otherwise, switching to a compatible POS system is relatively inexpensive, as most basic POS systems are now equipped to accept various payment methods, including digital payments.
Market your F&B business
Open any of these payment apps and you’ll see cafes and restaurants occupying real estate within these apps to run marketing campaigns and promotions.
Dessert cafe Chocolate Origin, for one, has been doing so with Fave. "And because Fave has such a large user base, we were able to very effectively reach out to a large number of potential customers," says the cafe’s General Manager Goh Kian Yong.
Smoother customer journey
Needless to say, mobile payments speed up the payment process, especially when compared to cash payments.
For healthy food spots in the CBD, for instance, where lunch hour queues are never-ending, this could mean being able to serve more customers, instead of having a bottleneck form at your payment counter.
If you’re never that busy, though, the immediate benefit might be less apparent. After all, nobody’s going to say, “Wow, I have to come back here because the payment process was so quick.” But offering more payment methods is definitely going to build a smarter brand image, especially if you cater to the modern, tech-savvy diner. (Which, in this day, is every other diner, so you definitely want to reach this huge group of people.)
Less operational errors
Cash transactions are inevitably error-prone, and any shop owner would know the woes of your cash count not tallying with the receipts at the end of the day.
The more alternative payment options you offer your customers, the more likely you are to be as cashless as possible, minimising opportunities for these errors to occur in the first place.
Lower transaction fees means higher profits
While credit card companies charge transaction fees of as high as 3 per cent, these mobile payment solutions often offer deliciously lower fees.
Coupled with low set-up costs – all you need is an SGQR code – this basically means the more you empower your customers with mobile payment options, the more likely you’ll reduce your operational costs, increasing your profits.
You’ll be ready to adopt future innovations
Take for instance the new "menu discovery" feature, available exclusively on the Google Pay Singapore app. This feature lets customers browse menus of eateries closest to their location and order directly on the app. Payment will not need to be made via Google Pay; customers can choose to pay via different methods accepted by the merchant, including mobile payments.
If you’ve got your various mobile payments all set up, you’ve essentially already laid the foundation to adopt other technological innovations. P.S. Watch this space for more details about this feature!
Not a “why”, but a “why not”
With low financial and logistical barriers to entry, as well as plenty of benefits to reap, perhaps it’s less a matter of “Why?” and more a matter of “Why not?”
Of course, we get the other side of the argument – traditional cash or card payments probably aren’t going away anytime soon in the Singapore F&B industry, given that many places, especially hawkers, have yet to embrace mobile payments.
That being said, many customers are becoming more comfortable substituting traditional payment methods with their mobile phones as a payment form, and with the Monetary Authority of Singapore (MAS) propelling the nation towards becoming an e-payments society, mobile payments will only become more and more common. As such, adopting the technology (and its merits!) as early as possible would be a smart move for any F&B business.