Firehouse Subs expanded mobile payment options for its customers last month with the addition of Apple Pay to its 870-unit system.
Jacksonville, Fla.-based Firehouse of America LLC had installed hardware in the second half of last year to begin accepting the rival Softcard tap-and-pay technology for Android phones.
With Firehouse’s addition this year of Apple Pay, which accepts payment with Apple’s iPhone 6 and iPhone 6 Plus smartphones, the chain broadened its mobile payment options to most smartphone users. Firehouse said the system will also accept payments via Apple Watch when it is introduced.
“Mobile payments are the next evolution of the handheld device frankly,” said Vince Burchianti, Firehouse’s chief financial officer.
He recently discussed Apple Pay, and how the company decided to adopt mobile payments at its restaurants, with Nation’s Restaurant News.
How did Firehouse get to this place in mobile payments?
The first mobile technology was Google Wallet back in 2011. … The platform wasn’t really vetted out. Our posture was wait and see, which we don’t like to do. We like to be as cutting-edge as possible. It really didn’t go very far.
Another company called Softcard came out in 2013, which was the driver for us to opt into this space. We worked a contract with Softcard to implement their tap-and-pay technology with loyalty and the whole nine yards. That’s where we started implementing the necessary hardware in all of our restaurants. That was Phase One. Then we rolled out nationally with Softcard last year.
Last month, Google acquired Softcard, which was owned by Verizon, AT&T and T-Mobile, for use with Android devices. What does that mean for Firehouse and how you implemented Apple Pay?
The technology that Google purchased from Softcard is the technology that we are currently using now for tap and pay. It was just a matter of tweaking a little bit of the hardware we already had in our restaurants. It was tested and certified by Apple, and then we it rolled out. When they roll that into the Google Wallet platform, we are already ready to accept that technology.
What is the investment per unit?
It all rides on the near-field communication [NFC], which is a little chip sending a tiny signal out and transmits the data from the telephone to a device. We selected the Verifone terminal. We rolled it out with one per register terminal in all our restaurants, so that averages to about two and a half Verifone terminals per location. The cost was about $1,100 each, all in, so each location was $2,500 on average.
Did you have the impending Europay, MasterCard and Visa (EMV), the so-called chip-and-pin, requirements in mind?
We were able to kill two birds with one stone. Part of the decision to roll with the Softcard platform was the EMV mandate, which is the chip-and-pin technology coming to town. That’s slated for October 2015. We need that hardware to be EMV-compliant as well, so it was really a win-win. The timing really worked out for the brand because we were going to have to buy new hardware. So we can now accept two platforms of payment, and we’re EMV compliant come October.
There’s a liability shift related to that chip-and-pin technology, and the last thing I need as a franchisor of 800-plus restaurants is for a franchisee to accept liability. I can stand tall and know our brand is as secure as possible. The moons really aligned for us on this one. We’re in a real good position for security and to meet the mandate.
How important is it for a restaurant brand to accept mobile payments?
Right now, we have cash and we have credit. Back in the day, it used to be gold. And then it used to be cash. Credit cards have been around for 50 to 60 years, and the mobile technology is the next wave. My cellphone connects to my car and reads my text messages back to me. It’s incredible that we have a device in our pocket that keeps track of our lives with calendars, communicates verbal and non-verbal, [you can] take notes in it. Of course we’re going to want to pay with it. It only makes sense. If the customer wants to pay with their telephone, if that makes them happy and they feel more secure, I’m going to go ahead and make sure I have that option for them to use.
Loyalty and rewards
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What was the timetable when introducing Softcard last year?
We were in pilot in three markets with the Softcard starting in July of last year. That was about 70 restaurants. We ran the pilot for about four months and then knew that it was the right thing to do. Then we started the rollout of the Verifone terminals, which took about three months. We were done with the system at the end of the year.
Is Firehouse incorporating loyalty and rewards?
We currently have a rewards program where you buy a sandwich and you get points. We’re modifying our app right now to add the mobile pay technology and also allow ordering of food.
What does this mean for customers?
We love convenience. We want speed and ease for our customer. We envision the customers’ handheld devices as sort of a remote control for our brand. Whatever you want to do with your phone, we’re going to try to help you get there. If you want to interact by buying food, you can do that. If you want to play a game on our loyalty program, you can do that. If you want to use your points to buy free food, you can do that. We want the interaction with our customer so they can share their experience on social media through the app as well.
What about mobile payment and the industry overall?
Restaurants are going to be forced into it. They will have to require new equipment to be compliant on EMV. That EMV equipment is ready to be used for mobile payments. Now it’s just which platforms. That’s a brand new option for customers to spend money in your shop.
Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless