The integration lets restaurants using SkyTab automatically determine tip pools or shares and send payouts straight to employees’ banks, according to a Tuesday (Aug. 6), press release.

“As an all-in-one restaurant platform, SkyTab has helped tens of thousands of restaurants modernize and optimize their operations,” Shift4 Senior Vice President of SkyTab Product Jay Shavitz said in the release. “Kickfin is a valuable addition to our marketplace, helping SkyTab customers realize significant time and cost savings by simplifying and improving the tip payout process.”

The integration helps restaurants develop “highly complex tip policies” and calculate tips based on roles, shifts, hours worked, points, sales categories and more, letting SkyTab customers distribute tips that arrive in employees’ bank accounts within seconds, the release said.

“With fewer cash transactions than ever before, digitizing tip management has become table stakes,” Kickfin co-CEO Brian Hassan said in the release. “Now the question is: Are you digitizing tip management in the best possible way? This integration gives thousands of SkyTab customers the power to fully automate their tip distribution process so they can save time, reduce risk, ensure compliance — all while making life easier for restaurant managers and their employees.”

Hassan told PYMNTS last year that consumers can barely buy a cup of coffee anymore without being asked to tip, a trend that businesses can take advantage of with digital tipping platforms that support instant payouts.

With the proper type of platform, the surge in tipping can be a boon for restaurants because they can pay workers immediately, leading to a higher take-home wage, which is what many employees are after.

Meanwhile, PYMNTS wrote earlier this summer that consumers were growing frustrated with the surge in tipping and were taking to social media to complain.

The PYMNTS Intelligence report “Tipflation Is Changing Spending Habits of 1 in 6 Consumers” noted the change in tipping habits headed into 2024, finding that 29% of consumers believed tipping was “out of hand” and 17% of consumers reduced spending due to tips.

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By the Numbers

This year’s installment of PYMNTS Intelligence’s “How the World Does Digital” report harnesses insights from a study, comprising more than 67,000 consumers across 11 countries that make up approximately half of the world’s gross domestic product, to understand how they engage digitally throughout their lives.

The results revealed that when it comes to restaurants, young consumers are engaging more often than not. Consumers overall averaged 12.5 total activity days in this sector per month — that is, they engaged with restaurants online 12.5 days out of every roughly 30 days. Among Gen Z, however, that figure rose to 20.1, and millennials, too, engaged most days, at 18.5.

In contrast, Generation X averaged only 11.1 days, and baby boomers just 5.4.

A Deeper Dive

Consumers’ digital engagement with restaurants varies not only depending on their age but also their incomes and where they live. The same “How the World Does Digital” study revealed that high-income consumers average 14.4 activity days to low-income consumers’ 10.2 activity days.

Additionally, those who live in cities engage more digitally. Research from the PYMNTS Intelligence study “ConnectedEconomy Monthly Report: The Urban-Rural Health Divide Edition,” which drew from a survey of nearly 2,500 U.S. consumers, revealed that 75% of urban consumers engage with restaurants digitally, as do 46% of suburban residents and 28% of those who live in rural areas.

Digital technologies can also increase spending for restaurants. Findings from the PYMNTS Intelligence report “Tracking the Digital Payments Takeover: Can New Use Cases Drive Consumer Use of Digital Wallets?” revealed that when using digital wallets, consumers spend an average of 33% more on restaurant purchases than when not using the payment method.

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This feature uses artificial intelligence (AI) and historical ordering data to suggest items that are paired with those that are already in the customer’s basket, prior to checkout, the company said in a Wednesday (June 12) press release.

“The tool leverages the history of flavor trends and ordering preferences that are married together and mines that data to come up with a much more intelligent upsell,” Jon Squire, founder and CEO of CardFree, said in the release.

CardFree is making Smart AI Upsell available to anyone, regardless of the vendor they use for online ordering, via application programming interface (API), according to the release.

This is the first of several AI-enhanced updates CardFree plans to add to its Payments, Loyalty and Ordering platforms in the coming months. The company sees opportunities to use the technology to drive operational efficiencies, frequency and larger tickets, per the release.

“As AI progresses, we’ll start to see things like cook times, order frequency, back-end inventory and other critical operational aspects leverage AI, so we’re expanding into those areas with our own products,” Squire said in the release.

PYMNTS Intelligence has found that restaurants are making use of technology in a variety of ways, including curbside pickup, mobile order ahead and automation in their operations.

Consumers are eagerly embracing these digital engagement capabilities, with more than 146 million Americans now ordering digitally via restaurant apps, websites and aggregator tools, according to “Inflation Puts Technology on the Menu for Restaurants,” a PYMNTS Intelligence and American Express collaboration.

In another recent development in this space, Nory said in May that it raised $16 million in Series A funding to expand the use of AI in the hospitality industry. Nory offers an “AI restaurant manager” that offers data-backed insights that help hospitality businesses optimize staffing levels, predict demand, select the right inventory and make other strategic decisions.

In April, Toast made an AI-based Benchmarking tool available to select users, saying the tool will enable leaders to compare the performance of their restaurants and menu categories against aggregated data from other restaurants that use the Toast platform.

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Case in point: As noted here at the end of last month, QR codes enjoyed a stint of popularity as a digital version of menus … and then they lost that popularity. Media reports said that many restaurants were pivoting to paper menus, as a result of technical glitches and customer dissatisfaction with scanning the menus and then trying to read them on mobile phones.

Menus Fizzle

PYMNTS Intelligence’s own data shows that only 29% of restaurants were offering QR codes to view their menus, a percentage that sinks to about 20% for smaller, independent restaurants. Only 23% of restaurant-goers that we surveyed said that they viewed the experience of using QR menus in a positive light.

But as illuminated by recent announcements by some providers, QR codes are finding appeal for pay-at-the-table settings. With that technology (literally) in hand, restaurant-goers pay for their meals with their phones at the point of sale with a device used by the waitstaff.

Pay at the Table Gives QR Codes Traction

At the end of last month Up ’n go, which provides pay-at-the-table QR technology to the hospitality sector, said it had notched $1.1 billion in total payments processed and noted that its platform had “settled” over 16 million restaurant checks since its founding in 2017. 

The company has estimated that using QR codes to dine and pay saves as much as 20 minutes per transaction with the optionality to choose digital wallets — which we note improves the turnover at the table itself. The more quickly diners eat and pay, the more quickly and efficiently the next diner can come in and be served.

The use of QR codes, particularly as a payments option, has had some momentum since the pandemic. As we reported in the fall of 2020, Square launched its QR code-driven Square For Restaurants platform, which allows customers to browse menus, place orders and pay for meals with scans from their phones. 

Last month, NCR Voyix, in collaboration with sunday, a payments solution provider, announced the launch of Aloha Pay-At-Table. The offering enables QR codes to be scanned, for diners to see their bill, split costs and pay. The companies have said that streamlining the payments experience saves 15 minutes from the average visit, which improves the restaurant’s operating efficiencies — and tips increase by about 10%, due to automatic, precalculated tip solutions.

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However, consumer complaints have reportedly prompted a shift in the industry. Many diners have expressed frustration with QR code menus, citing issues such as difficulty in navigating the menus, concerns about privacy and a perceived negative impact on the restaurant’s ambiance, The Wall Street Journal reported Friday (May 31).

As a result, restaurants are now reverting to paper menus to cater to consumer preferences, according to the report.

One of the main complaints from consumers regarding QR code menus is the need to squint or struggle to figure out their order. For some, navigating the menu on their smartphones feels like a cumbersome task, the report said.

Privacy concerns also play a role in the backlash against QR code menus, per the report. Additionally, some individuals, particularly older customers, face difficulties using the technology itself. The initial step of taking out their phones and scanning the QR code can be a hurdle.

The negative impact of QR codes on check averages and tips for servers has also prompted some restaurants to reconsider their use, the report said. One restaurant group experienced a 10% decrease in check averages when using QR code menus, as diners often failed to scroll through all the offerings.

In response to customer complaints, many sit-down eateries are ditching QR codes and reintroducing paper menus, according to the report. Some establishments stopped using QR codes on menus altogether. Others have adopted a hybrid approach, catering to the preferences of different customers by discontinuing QR code offerings at one location while maintaining them at another or by offering both printed menus and QR codes and allowing customers to choose their preferred method of ordering.

While the overall sentiment is shifting away from QR code menus, there are still niche uses where they prove beneficial, the report said. For instance, QR codes can provide additional information to interested customers.

PYMNTS Intelligence has found that consumers are rarely fans of QR code menus. Only 31% of consumers felt positively about viewing menus with QR codes at restaurants, according to “Digital Divide: Technology, Customer Service and Innovation in the Restaurant Industry,” a PYMNTS Intelligence and Paytronix collaboration.

QR code menus can keep younger customers engaged, but exclusively relying on these codes can alienate older generations, Michele Baker Benesch, president of Menu Men, a company that designs and manufactures both print and digital menus, told PYMNTS in an interview posted in February 2022.

“People are frustrated, especially people 40 years and older,” Benesch said. “Sometimes their phones don’twork. They don’t know how to access the QR code. So before they even get to order a beverage … they’re already upset, and that hampers the entire customer experience.”

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Aloha Pay-At-Table lets diners scan a tabletop QR code, see their bill, split costs and leave a time while paying in under 10 seconds, according to a Monday (May 20) press release. This means guests spend less time waiting for a check, and increases efficiencies for staff and restaurant owners, per the release.

“In an industry known for its razor-thin margins, our Aloha Pay-At-Table by NCR Voyix technology enables restaurants to operate more efficiently,” Benny Tadele, executive vice president and president of restaurants at NCR Voyix, said in the release.

“By serving guests faster, encouraging higher spending and turning tables swiftly, it’s a game-changer for business-minded operators.”

The company says this also lets servers enjoy 10% higher tips thanks to automatic, precalculated tip suggestions, while doing away with back-and-forth trips by the server for payments, thus saving an average of 15 minutes per table.

In addition, the tool prompts diners to review the restaurant’s food, service, ambiance and value on Google after they pay.

The debut follows last week’s rollout of NCR Voyix’s Aloha Kiosk, launched in partnership with restaurant-focused software provider GRUBBRR. As PYMNTS reported, this offering is designed to help eateries deal with challenges such as increased wages and food costs.

And restaurants can use the assistance, as PYMNTS wrote recently.

“Even as Main Street businesses outperform the rest of the economy, there’s a whole different set of rules for restaurants,” that report said. “For example, PYMNTS Intelligence found that over the last 12 months, Main Street businesses have operated with the lowest risk of closing since early 2020.”

A separate report by Fiserv explored the matter in greater detail, showing that small business sales for April rose 5.6% year over year and 2.2% month over month. But restaurants were an exception, with the Fiserv report finding that small businesses that typically attract discretionary spending, such as restaurants, did not do as well in April as in recent months.

“The sector saw sales growth slow as consumer demand for lower-priced food options increased,” PYMNTS wrote.

Meanwhile, research by PYMNTS Intelligence shows that consumers have doubts about self-service restaurant technologies, with 34% saying they feel positive about viewing menus via a QR code, and 31% wanting to order from self-service kiosks.

“While some restaurant technologies, such as QR code menus, may rub most consumers the wrong way, it seems that diners are open to self-service when it allows them to have more fun,” PYMNTS wrote earlier this year.

That report used the example of Kura Sushi, a conveyor-belt-style sushi chain that launched in Japan and before opening several dozen locations in the U.S.

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The collaboration, announced Thursday (May 16), has resulted in the Aloha Kiosk, designed to help restaurants cope with challenges such as increased wages and food costs.

“Digital technologies like the interactive Aloha Kiosk by NCR Voyix provide a better experience for the customer and less stress on the staff,” said Benny Tadele, executive vice president and president of NCR Voyix, Restaurants. “The Aloha Kiosk is integrated with the NCR Voyix Commerce Platform, enabling a seamless flow of data and the ability to unlock unique omnichannel ordering experiences for our customers.”

As the company notes in a news release, the rising popularity of self-service kiosks come at the same time that the Labor Department is predicting an average of 2.6 million job openings over the next eight years. At the same time, fast food eateries in California are dealing with a higher minimum wage law, with other states weighing similar legislation.

“With escalating costs, a shrinking labor force and the desire to provide multiple options for guest ordering and engagement, solutions like the Aloha Kiosk by NCR Voyix make perfect sense for the restaurant industry as they increase efficiencies and empower brands to do more with less,” said Tadele.

And restaurants can use the assistance, as PYMNTS pointed out earlier this week.

“Even as Main Street businesses outperform the rest of the economy, there’s a whole different set of rules for restaurants,” that report said. “For example, PYMNTS Intelligence found that over the last 12 months, Main Street businesses have operated with the lowest risk of closing since early 2020.”

A report by Fiserv goes into greater detail, showing that small business sales for April increased 5.6% year over year and 2.2% month over month. Restaurants were an exception, with the Fiserv report showing that small businesses that attract discretionary spending, restaurants among them, did not do as well in April as in recent months.

“The sector saw sales growth slow as consumer demand for lower-priced food options increased,” PYMNTS wrote.

“Restaurant spending shrank 3.1% compared to March and was off 0.2% from April 2023. The reduction in restaurant foot traffic was much less significant, indicating that consumers are still visiting restaurants but ordering less expensive items or choosing lower-cost establishments.”

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The point-of-sale payments company’s Quarterly Restaurant Report, released Tuesday (May 14) notes that average hourly earnings for restaurant workers have risen by 66% since 2017 compared to 40% for retail workers.

However, these costs aren’t across the board in the food-service sector, the report adds. Payroll has risen at bars and full-service eateries since 2019, while cafes and quick-service restaurants (QSRs) have seen their payroll costs decline.

“Bars and full-service restaurants rely more on higher-skilled employees who perform hard-to-automate tasks, which increases payroll costs,” Ming-Tai Huh, Square’s head of restaurants, said in a news release.

“It’s the exact opposite situation for QSRs and cafes. These sellers can more easily use technology to automate and streamline operations, helping lower operating costs for front and back of house.”

Some of that technology comes from Square itself, with the company last week debuting the Square Kiosk, designed to help operators reduce wait times and boost staffing in other parts of their restaurants while still taking orders.

And restaurants can use some help, as they’re proving to be an outlier at a time when most small businesses are outperforming the larger economy.

Labor costs at restaurants have been rising, and sales are slowing, according to a recent report by Fiserv, which counts the Clover restaurant point-of-sale, data and financing suite among its brands. As noted here earlier this week, that report showed restaurant spending shrinking 3.1% last month compared to March and was off 0.2% from April 2023.

“The reduction in restaurant foot traffic was much less significant, indicating that consumers are still visiting restaurants but ordering less expensive items or choosing lower-cost establishments,” PYMNTS wrote.

That report also included an interview with Mark Hennin, head of Clover Growth at Fiserv, who said that pressures are especially acute for restaurants these days. These eateries are dealing with slim margins with most operators only earning about a nickel to 10 cents on every dollar’s worth of food and drink they sell.

“According to Hennin, those margins — and indeed, the survival rates of the restaurants themselves — can get a boost if technology is deployed in the service of reducing food waste and improving the efficiency of the order-to-table-to-payment flow itself,” PYMNTS wrote.

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The provider of commerce solutions also said that 45% of F&B sellers adopt a third-party solution within their first year of using Square, according to a Tuesday (May 14) press release.

“Restaurants today rely on a variety of tools and services to drive operational efficiency, manage labor costsand find new avenues for growth in an increasingly competitive and challenging landscape,” Ming-Tai Huh, head of food and beverage at Square, said in the release.

To help these businesses find and use integrated solutions, Square launched its App Marketplace a decade ago, according to the release.

Some of the latest partner integrations now available to F&B businesses are SevenRooms, which allows restaurants to see reservations and customer insights on their point of sale (POS) system; Restaurant365, which helps restaurants manage their accounting, workforce and store operations; 7shifts, which gives operators access to restaurant performance data in real time; Popmenu, which helps restaurants grow their digital presence; and Olo, which lets operators view orders from all their digital channels in one place.

Square has also formed industry partnerships with food service distributor Performance Foodservice and three restaurant associations — the Illinois Restaurant Association, the California Restaurant Association and the New York State Restaurant Association — to better serve F&B businesses with its solutions.

In addition, Square has rolled out a new machine learning (ML)-powered recommendation engine for partner integrations. This tool provides personalized, timely recommendations to sellers.

“The value of ensuring food and beverage businesses can seamlessly build the technology stacks that best fit their operations is evident in the engagement and growth we’re seeing, and Square is committed to providing sellers with best-in-class integrations that help them more easily navigate the complexities of running and growing their business,” Huh said in the release.

PYMNTS Intelligence has found that technology is now a critical part of the restaurant experience, helping these businesses streamline business operations and meet consumers’ growing appetite for seamless experiences.

Restaurants are increasing their digital engagement capabilities, and consumers are eagerly embracing this, according to “Inflation Puts Technology on the Menu for Restaurants,” a PYMNTS Intelligence and American Express collaboration.

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For example, PYMNTS Intelligence found that over the last 12 months, Main Street businesses have operated with the lowest risk of closing since early 2020. A report from Fiserv went into more detail. The Fiserv Small Business Index showed that small business sales for April grew 5.6% year over year and 2.2% month over month.

But restaurants were an exception. The Fiserv report found that small businesses that capture discretionary spending, including restaurants, did not perform as well in April as in recent months. The sector saw sales growth slow as consumer demand for lower-priced food options increased. Restaurant spending shrank 3.1% compared to March and was off 0.2% from April 2023. The reduction in restaurant foot traffic was much less significant, indicating that consumers are still visiting restaurants but ordering less expensive items or choosing lower-cost establishments.

The situation is top of mind at Fiserv, which counts the Clover restaurant point-of-sale, data and financing suite of products among its brands. Mark Hennin, head of Clover Growth at Fiserv, told PYMNTS in an interview that pressures are especially acute for restaurants these days. The margins are slim, and most operators only earn about a nickel to 10 cents on every dollar’s worth of food and drink they sell.

According to Hennin, those margins — and indeed, the survival rates of the restaurants themselves — can get a boost if technology is deployed in the service of reducing food waste and improving the efficiency of the order-to-table-to-payment flow itself.

There’s a significant pain point tied to getting orders wrong in the first place, Hennin said. The “old days” of taking orders manually at the table and giving them to the back-of-the-house kitchen workers are fraught with opportunities for missed communications and mistakes. Get the order wrong and it’s time for a do-over, which increases the customer’s wait time (and frustration), holds up the table turnover and has the staff preoccupied with redressing mistakes instead of moving swiftly through other diners’ meals.

Digital channels can help reduce those inefficiencies, bringing the online experience into the in-store eatery itself, Hennin said.

Addressing Pain Points

The conversation came in the wake of Fiserv’s debut last month of Clover Kiosk and its enhanced 24-inch Clover Kitchen Display System.

In terms of functionality, the two offerings, which can be integrated, allow kiosk users to browse menus, customize items, order and pay without having to wait in line. The Kitchen Display System sends both online and in-house orders to one screen, and connects with Clover POS, Clover Online Ordering, BentoBox and other online aggregators, for what the company said is streamlined communication between the front and back operations within the restaurant.

“Restaurants are looking for these all-in-one holistic solutions,” said Hennin, tied as they are to other Fiserv operating systems and software designed to bring restaurants fully into the modern age.

“On average, what we see is that a customer, through a self-service device, will spend between 10% to 30% more because of cross-sell and up-sell opportunities,” Hennin said. “Plus, think about the staff. It frees them up to provide more personalization to customers, and they can attend to all the transactions at a much faster rate. So, it really helps the restaurant really grow profitability and revenue.”

The demand for self-service kiosks has been strong in the wake of the pandemic, about four times the rate Fiserv originally expected. There’s comfort in seeing a digital display of the order once it has been selected, even customized, before the food is actually in the process of being prepared.

“Not only is the customer experience improved, there’s increased revenues, too,” especially for high-traffic restaurants, Hennin said. The kiosk also enables cross-selling opportunities — where a coffee shop might conceivably offer a Danish with the morning joe or entice consumers to consider joining a rewards program or use the points already on hand.

“These are one-to-one marketing offers,” Hennin said.

Loyalty programs, as offered by Fiserv, can be used to bring customers into the store, where they redeem the offer on a kiosk, the order is filled through the kiosk, and the payment is made with a Clover gift card or by tapping a phone on a Clover system at the table.

The data that flows across the Fiserv systems also can be used to power restaurant results even by helping the company provide capital to the restaurants themselves, as Hennin noted that “we have a lot of data that the banks don’t — just based on the cash flow of those merchants. So, we’re able to provide cash advances to merchants that may not be as well-served by their banks.”

As Hennin told PYMNTS, with emphasis on the two new products aimed at serving the self-service opportunity: “It’s all about efficiency, the customer experience and reducing costs.”

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