In November 2013, I wrote about quick service restaurants (QSRs) and their preference accepting mobile payments and engaging with customers through a proprietary, branded app – as opposed to a third-party app like PayPal or Apple Pay. Sure enough, branded wallets have not yet fallen out of favor with QSR chains in the U.S., despite the emergence of many third-party wallet apps in 2014.
As payments expert Cherian Abraham tweeted, ‘If you’re a merchant, would you rather have loyalty stuffed in a third-party app or payments stuffed in a branded app?’ The answer is painfully obvious for those with any background in marketing. Merchant interest in mobile marketing has continued to swell this year while consumer uptake of mobile wallets has merely inched forward. With that said, why wouldn’t QSRs further their investments in proprietary mobile solutions?
With a branded mobile app, merchants have control over all marketing, loyalty and rewards. They can provide enhanced transparency into customers’ accrued loyalty, offer discounts that can be redeemed instantly or append coupons to digital receipts for encouraging future visits. The high levels of customer engagement associated with these marketing tactics easily trump standardized mobile experiences offered through third-party apps.
But even though third-party apps like Apple Pay deliver little value outside of payments, merchants recognize that giving its customers a greater choice in payment methods means not missing out on potential sales. With that in mind, QSRs have taken bets on which mobile wallets will see the greatest traction with consumers.
In 2013, Jamba Juice became one of Softcard’s first merchant partners while roast beef sandwich giant Arby’s took to LevelUp. Meanwhile, McDonald’s and Subway, bullish on NFC in general, opted to support both Apple Pay and Softcard in their restaurants. MCX merchants Wendy’s, Baskin Robbins and Dunkin’ Donuts naturally embraced the consortium’s CurrentC app, which is yet to launch.
And even with their hedges on m-wallets, merchants remain partial to a branded mobile experience. The majority of QSRs that accept payments made through a third-party app still maintain a branded app of their own. Further, some of these third-party payment methods are only available within a branded app (i.e. Google Wallet for Domino’s) – as opposed to directly available from the third-party app.
Many QSRs have bypassed the third-party app proposition altogether under the assumption that customers using the mobile channel cherish the exclusive benefits offered through a branded app. Digital software provider Tillster has capitalized on these mindsets by building custom mobile apps for QSRs like Subway, Domino’s, Burger King, Pizza Hut, Taco Bell and KFC.
Merchants are keen on delivering an engaging and personalized experience through mobile channels and will make every effort to transform third-party app users into loyal customers. Protein Bar does this by allowing users to port card credentials stored in the LevelUp app into its proprietary app without having to re-enter information. The QSR industry as a whole is likely to follow a similar approach in an effort to preserve the intricate marketing experience offered through proprietary mobile channels.