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Contactless orders eat into terminal providers’, banks’ market share

A shift to ordering food and drinks via phone using contact-free payments driven by the coronavirus pandemic is shaking up the hospitality industry and causing headaches for terminal providers and banks.

Contact-free ordering often via beacons on tables or by QR codes on menus took off during the pandemic and many pubs and restaurants have not looked back after installing the technology.

Food start-up Mr Yum serviced 150 venues before COVID-19 hit and has increased this to more than 1000 venues with 10 million users across the platform.

Mr Yum CEO and co-founder Kim Teo has seen business boom for the start-up through the use of beacons.

Mr Yum CEO and co-founder Kim Teo has seen business boom for the start-up through the use of beacons.

Chief executive and co-founder Kim Teo said the technology was “going gangbusters” and most venues had kept using contact-free ordering and payments even though restrictions had eased. Just 2 per cent of venues have reverted to traditional ways of taking orders.

“A really big majority have seen it as actually a more efficient way to run their business from a lower cost base. We increase average order values by 20 per cent to 45 per cent,” she said. “It’s hard to go back from that, right?”

The shift has directed payments away from terminal providers such as ASX-listed payments company Tyro and the major banks.

When Tyro was hit by a short-seller attack earlier this year, one of the issues flagged in the short-seller report was the move away from ageing terminal technology to payment systems such as that provided by Mr Yum.

‘Leaps and bounds’

Short-seller ViceRoy’s report says: “Disruptors like Mr Yum allow for from-the-table ordering and payment and have grown by leaps and bounds since the introduction of COVID-19 measures. This is the kind of obvious innovation that seems to solve problems, but it is not compatible with thousand-dollar antiquated machines Tyro still plays with.”

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