Three P’s to Reduce Fraudulent Payments: How Focusing on People, Process and Payments Improves Business Operations

by Wa’il Ashshowwaf3 Min Read

Oftentimes when consumers think about the last time they went out to eat or grab a drink at a bar, there’s a good chance that a smartphone was involved with the process. Whether it was finding a place, reserving a table, ordering food or finding friends, one thing is for certain—smartphones and digital technology solutions today are top of mind for both consumers and businesses of all sizes.

As restaurants and the broader hospitality industry continue welcoming mobile solutions as an essential asset to their business, it’s not hard to see the reason behind the new-found love for mobile solutions—they help deliver benefits that people truly desire. Notably, these include increased speed of service, enhanced convenience and cost savings that result from reducing the amount of time and money spent processing transactions.

While it’s exciting to get caught up in new technology and the nearly-limitless world of mobile apps, we must first talk about the dreaded “F” word—fraud. The unfortunate reality is that every owner of a restaurant, bar and club today has to deal with fraudulent payments. For some it’s an occasional nuisance; for others it’s a source of significant losses. The good news is technology is helping to crack down on fraud and mobile solutions are a key tool for reducing the likelihood of fraudulent activity, provided you have a solid grasp on your people, process and payments. 

People

To gain the largest ROI, business owners need to ensure that their technology solution enhances and promotes quality customer interaction. Not only is quality customer service good karma, it’s a key factor in driving revenue in the restaurant and hospitality industry. According to research, nearly nine out of ten U.S. consumers say they would pay more for a superior customer experience. Incorporating mobile solutions into your business can make a positive impact on operational tasks like taking payments, controlling inventory, managing seating, etc. Saving time on routine tasks that can be used for more face time with guests can create a better experience that helps ensure your customer returns to your establishment again.

For employees, mobile solutions empower staff and builds confidence and satisfaction in their job expectations. As restaurants and bars incorporate mobile solutions, it’s vital to create a culture of security and emphasize the importance of discreet passwords and secure handling of authorization swipe cards that allow access to the point of sale (POS) systems and others. In short, enhanced security means greater customer service, which helps to reinforce customer confidence in your mobile solution. By leveraging mobility, owners will have more time to streamline business operations and enhance the overall customer experience.

Process

As owners update their POS systems to include a mobile payment solution, it’s important that your staff clearly understand the impacts on existing processes and business operations. Following old, manual processes, such as allowing staff to manually enter credit card information, can lead to human error and can greatly increase the likelihood of fraud. With more than 15 million U.S. customers in 2016 victimized by credit card fraud and the threat ever increasing year over year, it’s a necessity that a new technology solution provides improved security.

On the back end, some mobile payment solutions offer pre-authorization, which allows your establishment to debit funds with a temporary “hold” that lasts up to 48 hours, thus helping to further reduce fraudulent charges. The biggest advantage of pre-authorizations is the ability to make sure that the person has enough funds on their card before settling the final authorization. Mobile payment solutions also provide a more cost effective EMV alternative to restauranteurs by reducing chargebacks due to the vast additional sources of information that a mobile payment solution collects on the user vs. the typical signed receipt alone.

Payment Technology

Enhanced security is just one of the benefits of incorporating a mobile payment solution into your restaurant or bar. It’s also important to look for enhanced fraud protection and compatibility with smart-chip cards, such as Europay, MasterCard and Visa, that are now being used nationwide and globally. Another advantage is that accepting payments with a secure payment app poses less of a security threat, because the credit card information is protected through a PCI-compliant payment processor. For restaurant owners, by ensuring that your payment processors and POS are PCI-compliant, you can streamline and protect all your reports in one place, (i.e. cloud-based labor and sales reporting, digital receipts, inventory management and more).

Additionally, it’s a good practice to be informed about the latest industry trends so you know the right questions to ask. For example, when implementing a mobile payment solution, ask if payment data transmission is encrypted and if the data is secure through tokenization. The point to drive home is that insecure technology can mean poor customer service, higher levels of legal liability and overall monetary losses.

As new technology emerges on to the digital market, it’s important that business owners looking to integrate mobile technology are aware of the latest innovations. By focusing on making sales more efficient and improving the customer experience, mobile solutions can help owners improve their businesses in profound ways. By following the tips above, establishments can work to reduce fraudulent charges and make adopting mobile technology a more secure, easier and functional experience. 

Wa’il Ashshowwaf

@rooam | LinkedIn | Website

Wa’il Ashshowwaf is a Partner and Business Director at Rooam, a socially integrated, cashless mobile payment app that allows users to pay for a night out, explore events and find friends. He has had a diverse professional career across a range of industries and geographies including roles at Pepsi, Walt Disney World and HSBC.

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