How and Why Payments Continue to Evolve Within the Food-Service Industry and Beyond with Sal Nazir of PAR Technology | Soar Payments LLC
Home / Podcast / How and Why Payments Continue to Evolve Within the Food-Service Industry and Beyond with Sal Nazir of PAR Technology

How and Why Payments Continue to Evolve Within the Food-Service Industry and Beyond with Sal Nazir of PAR Technology

Are interested in learning about the latest trends in the restaurant payment industry? In this episode of PayPod, host Jacob Hollabaugh sits down with Sal Nazir of PAR Technology to discuss point of sale and payments in the restaurant industry. PAR is a leading global provider of software, systems, and service solutions to the restaurant and retail industries. Watch this episode for a fun and interesting dive into this latest development in payments and fintech. 

Payments & Fintech Insights In This Episode

  • The tipping system, ordering ahead, and catering are unique aspects of the food service industry.
  • Smaller restaurants that were previously cash-based are now investing in point-of-sale technology to catch up with the shift to digital transactions
  • Cash usage has decreased while contactless payments have increased, with mobile platforms like Apple Pay and Google Pay becoming more popular
  • Contactless payments have expanded beyond in-store purchases to include QR codes, curbside pickup, online ordering, and delivery
  • Loyalty programs are becoming more important as cash usage declines, with companies looking to engage with customers and offer targeted promotions
  • And SO much more!

Today’s Guest

Sal Nazir : PAR Technology

PAR is a leading global provider of software, systems, and service solutions to the restaurant and retail industries. Today, with 40 years of experience and point of sale systems in nearly 100,000 restaurants and more than 110 countries, PAR is redefining the point of sale through cloud software and bringing technological innovation to all corners of the enterprise.

Featured on the Show

About PayPod

PayPod is the leading voice in the payments and fintech industry, covering payments, risk management and new technology. Host Jacob Hollabaugh interviews leaders who are shaping the payments and fintech world, as they discuss the latest developments in the payments and fintech industry.

Episode Transcript

Jacob: Welcome to PayPod, the Payments Industry podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world from payment processing to risk management and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show we are talking point of sale and payments and how different industries may have their own specialized need when it comes to POS and payments tools. We’re going to do so through the lens of the food service industry. So fair warning to all listening. You may end up hungry by the end of this one. I personally did have to skip lunch today and work through it. So while we won’t be naming specific food items, probably just the thought of checking out very quickly at my favorite restaurant is probably going to have me drooling by the end of this. Joining me to get into these topics is Sal Nazir, general manager of payments at PAR Technology, a leading global provider of software systems and service solutions to the restaurant and retail industries. Sal, welcome to the show. Thank you so much for being here. Hey, Jacob.

Sal: Thanks for having me and hello to all your listeners as well. Really looking forward to our conversation today.

Jacob: Same here. Pleasure is mine. Let’s start a little bit high level if we can. Why the focus on food service and restaurants specifically? What makes this industry a unique challenge that necessitates their own sales POS payments solutions built just for it?

Sal: Great question. You know, just to give you a little bit of background, has been in the restaurant space for going back well over 40 years. So we know this space really well. And what’s really attractive is it’s a large and growing industry, and Covid really accelerated the consumer preferences. And as a result of these consumer changing preferences, it’s driving a lot of innovation in this space. So we know we have to continue to innovate, we have to invest and do better. And really what we’re looking to do now is scale with the growth that we’re foreseeing within the next several years here. So that’s really why we focus on this space and as a natural progression of being a leader in point of sale, bringing together the payments, offering the point of sale was really part of the overall journey we’ve envisioned over the last 3 to 5 years.

Jacob: Is there anything specific to that point of sale process when you’re at a food service or a restaurant that is different than your retail or any other kind of checkout process we might have that makes it so that you’re building specifically for these types of companies. That is, you know, the repetition in the same products over and over the scale of how many sales they’re making in a day. What is it about food service in general that makes them have their own kind of needs for this world?

Sal: Yeah, When we think of the food services industry, like tipping comes together as one thing that’s really unique. They’re ordering ahead is another one that really comes ahead. Catering also stands out right when looking at other industries. So those are the types of use cases that we’re solving for which is different than traditional point of sales in different verticals. So those are the three that I think would stand out. I think within the food service industry, depending on where you look, if you look down market, some of the smaller restaurants were all cash based and didn’t really invest in point of sale technology. As we know with the recent events over the past couple of years with Covid, you saw now these SMBs really looking to the market saying, hey, how do I now catch up with this level of innovation? Because my consumers now are moving away from cash. So how do we meet them where they are today and make sure we invest in the right technology to grow?

Jacob: Yeah. And since you brought that up, that was one thing I definitely wanted to ask you about in the that first example you’ve kind of given there makes perfect sense of I started thinking when you said, you know, places that only did cash. I started thinking of the places that unfortunately great restaurants that are no longer in my neighborhood or around me in a couple of them were the kind of mom and pop shop that it was cash only or never had delivery set up anything like that. And then the pandemic came and was hardest on them of everyone. Was there any other major changes that, you know, the pandemic kind of accelerated a lot of change within worldwide every industry. But as you said, specifically in food service, it necessitated a lot of change, a lot of development. Was there anything else that stood out about changes that are now lasting changes or improvements that were made as a result of the pandemic?

Sal: Yeah. One thing that really stands out is pre pandemic. You probably saw cash still being used as a method of payment maybe 20% at a time, if not higher. With the pandemic, we’ve seen the decrease in cash usage within these facilities. And what we’re seeing is a lift off in contactless payments. I think the use of your mobile device with an Apple Pay or a Google Pay or one of those platforms, those ones are really accelerated. And we continue to see with the reopening the use of those technologies, contactless payments continue to grow. Right. So it’s not abating back where consumers are going back to an old behavior. They’re now leaning into this new piece of technology and demanding where they shop have this capability. Otherwise, it’s hard for them to go there and shop.

Jacob: Yeah. Do you have any numbers behind potentially like what the market share has kind of turned into from the different payment options that are available? Which ones are gaining the most market share?

Sal: Yeah. So definitely contactless has really taken off over time. We’ve seen it go up from like 70% into the mid 80s. Now from a usage perspective and we’ve seen cash. Decline in some of our customer segments down to like 10%. So, so really low cash usage now, which is great for our industry because we definitely promote the use of these contactless technologies.

Jacob: What all falls within contactless when you’re saying it there, is that like like a wide range of things? Because I think of not only, you know, cards or e-wallets on your phone or whatnot in store, but also then the rise kind of of mobile ordering and a lot more delivery and things like that. Are you kind of combining all of it in there or what? What makes up contactless? It’s a good.

Sal: Question. Yeah, we are seeing it. And when I say contactless, I definitely talk about the ability to pay with a virtual credential. So we see it in QR codes, we see it in curbside pickup, we see it in online ordering, we see it in delivery. So all of those engagement channels are now taking this method of contactless. So so that’s how we’re saying it’s not just like the in-store experience where you’re walking up and tapping your physical credit card or your phone. It’s now broadened out to all those additional verticals as well.

Jacob: Yeah, it’s been definitely a major change. And this isn’t the only industry like that of having to adapt very quickly to do we need our own app to run all of this through If we’re now going to be doing a lot of more pickups or deliveries than it is in-store, sales of any variety and food service is definitely the one that always stood out to me. I have, as someone who worked in the industry previously in my life, throughout the pandemic and now afterwards, I pointed out a bunch of things of like, I think that’s here to stay. I think that change that was forced upon them is actually something that makes way more sense. The QR codes kind of chief among those of not just the ability to order at your table or from your home, but then to be able to go pick it up and everything like that. So I think those are definitely around to stay. One of the other ones, a big trend of late within food service, but I would say outside of food service as well. But maybe another one that kind of food service is leading on has been the move towards seamless loyalty payment. And again, with more, more and more stores and locations having their own app that everything runs through them in their own ecosystem. There’s more mobile based rewards programs. Can you speak to the rise of some of those options and why the benefits they bring, why they’re growing in use?

Sal: Yeah. So loyalty usage is really taken off with the advent of the shift from cash into higher digital transactions, these brands are now looking to get to know their customers more intimately. One thing with loyalty is loyalty. Traditionally, you probably had like 30% of your fan base. They’re always signed up. They’re there, right? And it kind of peaks at that level. And then we kind of think about how do we get to the other 70%, how do we get them into that loyalty program? So over the course of time, we’re seeing a lot of innovation in the loyalty space. One thing that we’ve done recently is we’ve actually launched something called one Tap Loyalty, which is in supported by the Apple platform, the Apple wallet. And really what one tap is, is you can tap your mobile phone at the point of sale device and you can enroll in the loyalty program. You can earn the points in the loyalty program, you can redeem your points and pay all in one tap of your phone. So if you think about the power of that as a consumer in the past, they would have to pull you to the side.

Sal: You have to sign up an application, you’ve got to get something emailed to you, you have to activate your account. This all goes away with one tap loyalty because it’s native to your iPhone. It actually is natively embedded in your Apple wallet. So the moment you tap your phone, it uses all your apple credentials, it uses the Apple security. And within a matter of seconds, you’re enrolled in this program. So we’ve really seen a tremendous uptake in that introduction of that product, because now what’s happening is these brands have a new way to engage with their consumers. A consumer doesn’t have to have this experience where it’s like a fragmented thing. Loyalty is disjointed. I got to get a new app. I forgot my password. I can’t log in, right? Like all of that stuff goes away because you literally just hold your iPhone next to the payment device and it takes everything out of your wallet and off you go. So that was really, really powerful. And that’s what we’ve leaned into recently because loyalty usage continues to drive adoption by consumers.

Jacob: And so that’s all running through. I think you referenced like your Apple wallet. It is not something that’s embedded within I’ll just use my favorite place that I frequent the most often, Chipotle. It’s not within their specific app. It is all wherever you go, you’re going into the same wallet. Tapping it once and it’s pulling from all the different places. Is am I getting that correct?

Sal: Yeah, in a way, it’s the actual Chipotle app now in your wallet. So instead of having to have a separate.

Jacob: Connecting those two things. So they still need that to exist, that ecosystem to exist, but they’re not making you get out that specific app and log in every single time because yeah, when you reference the you forget your password. I’m like, Yeah, that’s the main reason I don’t use. I have all of the apps for all the places that I eat at and all the places I shop at. And I can’t tell you how many times I’ve gotten in line somewhere, right as I’m about to pay. I’m like, Oh yeah, I need the app. And I pull it out and it’s either like, Oh, I don’t know my password or it has to update. And so now I need to put my password in again and. I don’t remember it. And being like, I guess I’m just not going to do it. So having that seamless connection between the two, definitely. I can see from a consumer standpoint, being really powerful.

Sal: Yeah. One thing we learned is people when they put something in their Apple wallet, it’s a very personal connection, right? Because you’re putting maybe your health card or your driver’s license or your credit card. Right? So if you’re you’re putting a loyalty platform in there, your usage just tends to be high. And because the security is either your face ID or your thumbprint, we don’t have to build controls around that. Right? Introduce a new method. We’re using all of this stuff that the consumer is used to today in their engagement, right. With their iPhones. So so it’s really powerful to see consumer just natively say, oh, I tapped my phone, I got all this notification, I can just enroll, click one button. It was it was really cool to see the adoption curve really take off there.

Jacob: Yeah. And what are the main benefits then to the merchant themselves? We’ve kind of focused on the consumer side and how powerful that is. But from the merchant side of things, what does getting over that 30% hump, you know, what kind of benefits does that entail for them?

Sal: Yeah. So they reach a new set of customer segments, right? These guys are they probably one thing we saw is there’s a lot of customers that comes into these brands. They shop three, four, five times a month, but they’re not part of the loyalty program. Right? So now they’re getting awareness that, hey, these cards are appearing multiple time. I can target specific offers to these customers and say, Hey, I know you’re in my platform. You can join my loyalty program. The other thing that we’ve seen is higher speed of service and efficiency. So the lines at the sites are moving faster, there’s faster throughput, there’s better ROI for the restaurants in that thing, in that case, data accuracy as well. Sometimes with these platforms, people sign up with pseudo email addresses and pseudo phone numbers just to kind of get in the way. But because you’re using the iPhone and that’s kind of tied to your your wallet and you have your iPhone credentials there, the data accuracy and that consumer profile is much higher. And then the final piece that we’re seeing for the merchant side of the business is increased revenue through better insights. So targeting your customers, you can see someone is buying these types of products consistently. So you may want to offer them a similar or adjacent product. You don’t want to offer them something totally out of line with what they’ve ever purchased before. So really targeting the messaging and offers to the consumer profile is also one of the huge benefits that we’re seeing here.

Jacob: Yeah, that’s amazing. And I can definitely see how all of that’s going to help in a in a really big way on both sides and comes back to everything we always talk about on this podcast. Everything payments related, sales related is removing friction, making it as seamless and easy as possible and that those are the people that ultimately win long term is the ones that you can make that for. But then being able to add in, yeah, the knowledge of actually who your people are. It’s one thing it’s great to be like, we have 1000 customers a month. We kind of know who 2250 of them are. We don’t really know who the other ones are. We don’t capture that or they tell us they’re someone they’re not, which I almost blushed a little when you mentioned the like the fake phone number or email address or whatever to sign up again, can’t say I have or haven’t done that before. So yeah, being able to have an accurate picture of who’s actually coming, what they want, be able to cater to them more and more. Definitely a lot of power there to get you out of here. The final kind of question I have for you, you did reference this a little before, but I when looking through PAR’s. Website and everything, one thing kind of stood out above all else to me, and that was that you take a unified customer experience approach as it says, and try to bring all parts of the business together, working within the same structures, able to communicate effectively. Can you explain that approach a little bit and how powerful it can be for a company to have any type, to have all parts of its organization and Operation Unified able to work together, communicate together?

Sal: Yeah. Awesome. Yeah, that’s definitely one of our things that we’re talking about a lot was this concept of unified commerce. Over the years, part has really went out and acquired certain really cool assets, right? So we’ve been leveraging Point of Sale, which has been their day one. We have a back of house solution which gives insights to like your suppliers and so on. We have an online ordering platform now with menu. We have a loyalty and of course payments, right? So when you think of these five assets that they’re all in one ecosystem, it’s natural for us to hook them together and be able to say, okay, if you’re ordering online, we should know what you’re ordering online and we should be able to integrate that into the point of sale, right? And if you have a stored payment credential online, you should be able to check out with that payment credential when you go in store, If you have a loyalty platform, we should be able to integrate where real time at the point of sale, you should be able to claim your rewards. We should know who you are and say, Hi Jacob, welcome to X store. You have X points. Would you like to redeem them today? Right. And that’s the part of unified commerce, is you’re connecting all of these different technologies where the consumer finally gets the experience that they’re expecting and then the merchants as well. When you think of the merchant side of things, we sell these merchants a lot of technology and it’s always a fragmented piece of their experience.

Sal: They bolt on part A, part B, Right. And we always sell them this dream. Everything’s going to work together one day. What part has really done cool is that we’ve actually bought the assets and we’re actually linking them together to realize this vision of, you know, let’s simplify the merchant life and also create an expectation on the consumer side where they’re getting the behavior they expect. Consumers are very innovative. A lot of these iPhones experiences, Android experiences, drive these innovations because they make it so simple. Right? And when they walk into a restaurant, they expect that same level of simplicity and integration. And that’s how we’re leaning into unified commerce. Right. And the one type of loyalty I mentioned is our first foray into this, because it’s linking the loyalty platform, the payments platform and the point of sale platform together. And it’s driving a new experience, right? And that’s just the start. We have a bunch of other things we’re going to do with our online ordering platform and so on. So that’s how we’re leaning into unified commerce and owning these assets really helped because if you don’t own them, you have to work with multiple partners, multiple roadmaps, multiple integration points right here because we control them all together. We can actually build it and structure the behavior the way we envision.

Jacob: Yeah, and I lied. I said that was the last question. But now I have kind of a follow up on that. So apologies for being a liar, but I do want to follow up with one thing on that, because you brought up a topic that I talk about a lot on this show and ask a lot of guests on, and that is the idea of if you’re taking this unified approach and I see all of the benefits that that would bring and I’ve asked a lot in the past, we have a lot of people on this show who are doing very specific parts, and we’re talking about integration over everything else of being able Your unified approach is being able to offer all of those different parts. But a lot of folks out there in the last half decade, you know, that as a service has been a huge, huge trend. All these people doing these very niche things, but then trying to be able to unify all of these companies doing these little niche things. So I often ask folks if they think that have these kind of as a service companies, if they think, do you think that trend continues or do you see some consolidation continue? How we get to a unified is it’s going to continue to be a bunch of little people just learning to interact and integrate really well together? Or is it more your PA style approach of we need to be able to do all of these things under the same umbrella. So do you think there was anything about food service and the industry you’re mainly working in that allowed your style approach to do everything within one company to be more effective? Or do you see the big trend of as a service really niching down in what exactly you’re doing, maybe turning into some more consolidation in the future where you can have more companies can have that unified approach?

Sal: It’s a great question and one I spent a lot of time thinking about within this space. I think the mid market kind of, let’s say 500 locations and up in the enterprise space, they will lean into this unified commerce space at scale. They have the number of locations, the ROI efficiencies to justify the investment and kind of consolidating that right now down market. I think there is a lot of vendor fragmentation. There’s a lot of players slicing the pie, right. And I think that’s going to continue for a while. But if we can innovate down market with this same type of unified commerce, we will then kind of win in the down market space. So I think it’s going to be a journey. We have to prove it out in the enterprise space, show the value or get the ROI, get the investment returns. Mid market is growing into enterprise, so they definitely want to make sure they build their tech stack right to capture that tailwind. So they’re going to probably lean into this dung market is probably going to wait and see and we need some pretty cool banner wins down market in like the 4050 location that really like innovative trying to be different to kind of adopt this that kind of say look you don’t have to be an enterprise player to play in unified commerce. You should play in unified commerce in a SMB space as well, especially if you’re like three, five, ten location because there’s value in the behavior and linking all of this technology. So hopefully that answers your question. I think top market, mid tier got to be there. Otherwise you’re probably going to be just a fragmented ecosystem dung market. We’re going to have early adopters that’s really innovative and they’ll drive the rest of the industry.

Jacob: Yeah, love it. Well, Sal, this has been a great conversation. For those listening who may want to follow you, learn more about PAR, keep up with everything you and the company have going on. Where would be the best place for them to go? To do so.

Sal: You can visit our website PAR.com or PARTech.com. Also follow us on LinkedIn. We have a really cool following. I think we’re up to 60,000 plus followers, so that’ll be really cool to look us up there. And I’m also on there if you want to search me individually as well. Happy to connect, to share any other insights or answer any questions, Wonderful.

Jacob: We will link to those and more in the show notes below. Sal, thank you so much for your time and knowledge today. Hope to speak again sometime soon.

Sal: Yeah. Thank you for your time. Invitation as well. Take care.

Jacob: If you enjoyed this episode and want to hear more, head on over to SoarPay.com/podcast to subscribe on your podcast listening platform of choice. That’s s.o.a.r.p.a.y Dot com slash podcast.