As the family entertainment centre (FEC) landscape continues to evolve, efficient and innovative payment solutions have become more crucial than ever. In the first of a new “Ask the Experts” series, we tap into the insights of Jeremy Dickamore, VP of global payment solutions, aka payment gateway guru at Embed, a leading worldwide supplier of point-of-sale and revenue management systems.
With his extensive experience and deep understanding of the industry’s needs, Dickamore addresses five crucial questions, offering insightful perspectives on the future of FEC payment systems and payment integration. Join us as we explore the cutting-edge trends and technologies shaping seamless customer experiences in entertainment venues worldwide.
How have FEC payments changed in the last decade?
“FECs have seen a lot of changes in payments, especially in the US. If we go back to 2014, cash was still a big part of the payments ecosystem, and credit card payments were still processed by swiping.
“The EMV [Europay, Mastercard, and Visa] chip hit the scene in the US around that time, years after it had already been launched in many other countries, but it took several years to gain traction here. Companies like Apple and Google introduced digital wallets, but they still saw minimal usage. There was a slow upward trend in adopting that technology.”
“In comparison, today’s consumer expects to be able to pay via some form of contactless payment, whether that is their EMV chip card so that they can tap or a digital wallet. Approximately half of consumers no longer carry cash, or even a wallet, for that matter. So, with new payment features like Embed’s Mobile Wallet, many FEC visitors are loading their cards before they even arrive at the attraction, and they’re ready to play as soon as they walk in the door.”
Should an operator consider charging customers convenience fees or surcharges for paying by card?
“Firstly, I understand that passing on fees can seem like an easy solution. However, most studies show that it’s just not a great approach. In fact, an American Express study shows that 86% of customers will stop visiting businesses that charge convenience fees. And I’m certainly one of those; I’m very aware when someone is charging that fee. I might buy that day, but after that, I won’t choose to be their customer anymore.
“You risk angering and chasing away customers. Convenience fees are very apparent to customers because you must notify them before charging them. We all want our customers to be recurring customers, so we must carefully weigh those pros against the cons.”
“Another crucial part of that is understanding credit card payment regulations. Right now, an offering known as dual payments is being utilised or considered by several FECs to lower their credit card processing costs by passing them on to the consumer. This was previously called cash discounting.
“However, dual payments will not pass the cost on to the consumer. Instead, it requires that the FEC raise their standard price to account for credit card processing fees, and then it offers a discount to consumers who make payments with cash. However, a recent in-depth study by the IHL Group shows that the cost of handling cash is approximately three times more expensive to accept than it is to accept credit cards.
“The ideal approach is to build credit card processing fees into your standard pricing and not offer that cash discount because you lose money there and risk chasing your customers away.”
Regarding FEC payment solutions, what are some common pitfalls and easy wins?
“Choosing the right provider is paramount. Many credit card processing companies increase their earnings by regularly raising merchant rates and fees, and that quickly leads to a drastic increase in overall processing costs for a business, which can be challenging for a company to track. They check their statements months later and find that they’ve been paying double, triple what their startup costs were, and this has been happening over several months. Finding the right provider that values customers is a big win.
“FECs also need to make sure they can accept all payment methods; their PIN pads should be able to accept swipe, EMV, chip and contactless payments.”
“Finally, I’d also look for a provider that offers payment gateway integration with their point-of-sale software. What is payment gateway integration? Essentially, it means that FEC operators can accept various payments directly through their software rather than using different platforms.
“An integrated payment solution will save operators time and money on things like daily reconciliation, reduced errors, ease of use, and decreased transaction times. We advocate for our customers to think twice about their current payment providers. We do this with a quick, no-cost payment consultation that shows them their losses to payment processing fees and the potential savings they can achieve by switching to another provider.
What are some of the best ways FECs can maximise spending per guest?
“Make it as easy as possible for customers to load, reload, and purchase attractions. I would increase the ease of play by offering a variety of RFID wearables like wristbands or lanyards and a mobile solution that allows them to utilise their phone to play arcade games and access attractions.
“Studies show that consumers spend far more with credit cards and digital wallets than with cash, so we want to give them all the avenues to do so. Regarding FEC payments, features like our Mobile Wallet allow customers to save multiple cards on the portal and reload them easily so that they can return again and again.
“We have seen impressive average metric results with Mobile Wallet use, with a reload value five times that of cash. The average cash transaction is $9.90, whereas the average Mobile Wallet reload value is $50.57. This is compared to an average $31.95 reload value when guests use a credit card to top up their game cards.
“And, in most cases, these customers come into the location already loaded up and ready to play. 60% of Mobile Wallet reloads happen offsite before the consumer enters the FEC.”
How do you see FEC payments changing and evolving – what does the FEC of the future look like?
“Technology continues to advance. Digital payments and currencies continue to gain ground year after year. In fact, a recent study on global payments estimates that digital wallets will be the only transaction method to gain value share over the coming years. So, they’re seeing that digital wallets, Apple, Google, and tap-to-pay will continue to gain traction. In contrast, things like credit cards, debit cards, and cash, especially, will continue to trend downwards, so we want to ensure that new PIN pads accept that method and offer integrated card payments.”
“PIN pads continue to gain new technology as well. Some of the latest PIN pads that are out now allow for the use of a camera that can scan QR codes directly to the device. Biometric secure payments also continue to gain traction, so I think we’ll see that more and more in the FEC of the future.”
“As FECs advance, they will become more and more self-service oriented for payments, and that should allow employees to interact more with customers on the floor, as they’re not stuck behind a desk. They should increase the overall attentiveness, leading to higher customer satisfaction.
“The FEC of the future must embrace this change, be aware of the technology that’s coming out, and adopt the technology that they see will drive customers to return again and again to their location.”
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