Tap, Scan, Gone: Why Digital Payments Are Reshaping Food Retail Faster Than Anyone Expected

 

For decades consumers tolerated one universal frustration in food retail: waiting in line to pay. Grocery stores built checkout lanes designed to maximize impulse purchases. Convenience stores focused on speed but often relied on aging POS systems. Restaurants battled throughput bottlenecks during lunch and dinner rushes.

Today, the checkout lane itself is becoming a competitive weapon.

In 2025 and 2026, the battle for food retail market share is increasingly tied to one question: How fast, frictionless, and personalized is the payment experience?

The transformation has been dramatic. Yet despite the rise of digital wallets, tap-to-pay, scan-and-go, and app-based ordering, cash is not disappearing nearly as fast as many analysts once predicted.

The modern food retail economy is no longer “cash versus digital.” It is becoming a layered ecosystem where speed, convenience, data, and customer control determine who wins.

According to the Federal Reserve’s 2025 Diary of Consumer Payment Choice, cash represented just 14% of all consumer payments in 2024, while credit cards accounted for 35% and debit cards represented 30%. Consumers also averaged 11 mobile-phone-based payments per month, nearly triple the level recorded in 2018.

At the same time, nearly 80% of Americans still carried cash at least one day per month, and more than 90% said they intended to continue using cash in the future.

That tells us something important:

Consumers have embraced digital payments for convenience, but they still view cash as security, backup, and control.

A Historical Shift Decades in the Making

In the 1970s, grocery stores were almost entirely cash-and-check businesses. Credit cards were rare in supermarkets, and restaurant payments were manually processed with imprint machines. Convenience stores operated almost exclusively on small-dollar cash transactions.

By the late 1990s and early 2000s, debit cards began reshaping retail. Consumers started prioritizing speed and convenience over physical currency. The rise of self-checkout in grocery stores during the 2000s accelerated the transition further.

Then came smartphones.

When Apple Pay launched in 2014, many analysts viewed mobile wallets as a niche technology. Today, mobile payments are becoming standard operating procedure among younger consumers.

Federal Reserve data found adults ages 18 to 24 used mobile phones for roughly 45% of all payments in 2024.

Generation Z consumers increasingly see physical cash as outdated. One 2025 study found that 53% of Gen Z consumers only use cash as a last resort.

The food industry noticed.

Retailers realized digital payments do more than speed transactions:

·       They increase basket size

·       Improve loyalty participation

·       Reduce labor friction

·       Enable personalized offers

·       Capture valuable customer data

·       Increase order throughput

·       Reduce abandoned purchases

And perhaps most importantly, they reduce waiting.

Adyen research previously found that 86% of U.S. consumers had left a store because lines were too long. The financial impact reached an estimated $37.7 billion in lost sales opportunities.

In food retail, slow checkout has become synonymous with lost market share.

Convenience Stores: Winning the Speed Game

No retail channel has embraced payment innovation faster than convenience stores.

C-stores understand their core value proposition better than most traditional grocers: speed matters more than almost anything else.

Example 1: 7-Eleven

7-Eleven has aggressively integrated mobile ordering, digital loyalty, app-based payment, and frictionless checkout into its business model. Customers can order ahead, pay digitally, redeem rewards instantly, and reduce in-store dwell time.

The company’s app ecosystem has become central to driving repeat visits and foodservice attachment sales.

Example 2: Wawa

Wawa continues to lead the convenience industry with integrated mobile ordering, self-service kiosks, contactless payments, and loyalty-driven personalization.

Wawa understands that consumers purchasing made-to-order food increasingly expect restaurant-level digital convenience combined with gas-station speed.

Industry analysts note that by 2026 many leading c-store chains are redesigning store layouts around digital-first ordering and payment flows.

Grocery Stores: Finally Modernizing the Checkout Experience

Legacy grocery chains were once notorious for long checkout lines, coupon friction, and outdated payment systems.

Now grocery retailers are racing to modernize.

Example 1: Walmart

Walmart transformed consumer expectations through app-based scan-and-go, Walmart Pay, express self-checkout, and integrated omnichannel payment systems.

The retailer increasingly uses payment technology as a traffic retention tool, linking payments directly to membership programs, digital coupons, and online ordering.

Example 2: Ahold Delhaize

Ahold Delhaize banners including Stop & Shop and Giant are expanding “pay-by-bank” systems in 2026 that allow direct bank-linked payments both online and in-store.

This evolution reduces transaction costs while streamlining checkout speed.

The grocery industry finally understands what consumers have known for years:
The checkout experience is no longer the end of shopping. It is part of the brand experience itself.

Chain Restaurants: The Rise of Frictionless Ordering

Restaurants once viewed payment as the final operational step.

Now payment systems influence ordering frequency, loyalty participation, and average ticket size.

Example 1: Starbucks

Starbucks arguably created one of the most successful payment ecosystems in foodservice history.

Its mobile app blends ordering, payment, rewards, stored value, and personalization into one integrated customer experience. Starbucks effectively trained millions of consumers to preload money digitally before purchasing.

That shift fundamentally changed restaurant payment behavior.

Example 2: McDonald's

McDonald's has expanded mobile ordering, digital loyalty, self-order kiosks, and app-based offers globally.

Consumers increasingly bypass traditional cashier interaction entirely. Payment is now embedded into the ordering process itself.

For quick-service restaurants, reducing transaction friction directly improves throughput during peak periods.

Why Cash Still Matters

Despite the surge in digital adoption, cash remains critically important.

According to Federal Reserve data:

·       Cash still represents 14% of all payments

·       Lower-income households rely more heavily on cash

·       Older consumers continue using cash frequently

·       Unbanked households depend overwhelmingly on cash transactions

Several states and municipalities are even considering laws requiring businesses to continue accepting cash to avoid excluding vulnerable populations.

The food industry must recognize a crucial reality:
Going completely cashless can create accessibility problems and alienate important consumer segments.

The smartest retailers are not eliminating payment options.
They are expanding them.

The New Competitive Battlefield

Digital payments are no longer simply financial transactions.

They are now:

·       Marketing platforms

·       Loyalty engines

·       Data collection systems

·       Personalization tools

·       Labor management solutions

·       Customer retention ecosystems

The companies winning in 2026 are those creating seamless experiences where ordering, payment, rewards, and personalization merge into one frictionless interaction.

Consumers increasingly expect:

·       One-click reordering

·       Mobile wallets

·       Personalized digital offers

·       Instant rewards redemption

·       Faster checkout

·       Omnichannel payment flexibility

Retailers that fail to modernize payment infrastructure risk becoming operationally obsolete.

Because in modern food retail, speed is no longer a convenience.

It is brand equity.

Three Insights From the Grocerant Guru®

1. Payment Friction Is Now a Hidden Food Cost

Consumers increasingly equate long checkout times with poor brand execution. Slow payment systems now reduce repeat visits just as effectively as poor food quality or bad service.

2. Digital Payments Are Becoming Marketing Platforms

The real value of digital payments is no longer transaction processing. It is the ability to personalize offers, track behavior, build loyalty, and drive incremental food purchases in real time.

3. Cash Is Not Dead — But It Is Becoming Strategic

Consumers may use less cash overall, yet cash remains critically important for value shoppers, older consumers, and unbanked households. Retailers that completely eliminate cash risk shrinking their customer base while alienating economically important segments.

Success leaves clues. The retailers winning today are not simply faster at checkout. They are redesigning the entire consumer experience around convenience, personalization, and control.

So just what is your New Electricity?

Foodservice Solutions® continues to track the intersection of foodservice, payments, consumer behavior, and grocerant evolution across retail channels worldwide.

Toast Tipping Suggestions are One Thing but Charging Customers to Use Their Service is a Tipping Point

 

The original thesis of technology use in restaurants was to save restaurant employees time thus saving the restaurant money. When Toast came along with it, was a ‘automatic’ tipping charge added to the bill in most cases it started 18 percent.  For those of us in the industry we thought nothing of it as most of us tip well above that as a professional courtesy.

The team at Foodservice Solutions® consists like most companies of workers in their 20’s, 30’s, 40’s, and some as old as our Grocerant Guru® who has worked in the industry as long as the other have been on earth. All however thought the minimum was a bit high for beginning workers buying a fast-food meal.

Steven Johnson Foodservice Solutions® senior expert contends that Toast is near a tipping point where the cost of the service becomes a greater annoyance than benefit for the retail outlet or the consumer.

In case you did not know, Toast is adding a new consumer-facing $0.99-cent surcharge to all online orders, without giving restaurants the option to opt out of the new fee, in an unpopular move that has caused restaurant operators to post letters and tweets of protest on social media. The Boston Globe, reported that the fee will be added to all online orders over $10 and will be beta-tested with a small group of restaurants before being rolled out nationwide on July 10.

Now according to a mockup of Toast’s interface, the .99-cent fee will not show up separately and will be instead part of a combined line called “taxes & fees” that already regularly shows up when customers place online orders. Unless consumers expand the “taxes and fees” subsection, they won’t see the new “order processing fee,” which, according to Toast, is intended to “help fund product investments” like SEO menus, customization, and chargeback coverage.

However, if President Biden passes what has become known as the Junk Fee Protection Act, hidden fees like this one from Toast or others from ticket-selling websites could be under fire. NOTE: The team at Foodservice Solutions® that includes all workers of all ages support the JUNK FEE PROTECTION ACT.

Talk about double talk, here is want they are quoted as saying about the new fee; “As we innovate, we remain committed to keeping restaurant digital ordering costs low and protecting restaurant bottom lines from third-party commission fees,”]. “We also take any changes to our pricing model at Toast very seriously. That is why to help fund ongoing innovation in restaurant technology, we are updating our pricing model to add a nominal $0.99 fee paid by guests on orders $10 and over on Toast online ordering channels. This change helps fund product investments and continued innovation in support of helping restaurants maintain the direct relationship with their guests.”

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation, and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Payment Technology Drives Customer Adoption for Restaurants Big and Small

 

It is at the intersection of hand held marketing, mobile devise ordering, and payments that time starved consumers of all ages have become familiar with, accepting, and adopting digital restaurant and foodservice payments. If you are not looking a customer ahead, you are losing ground.

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®’ retail foodservice operations including Chain Restaurants, Independent Restaurants, Convenience stores and Bodegas all if they are not offering digital payments today, start doing so.  

Here is the case for adding one more level of technology to you operation. According to a study carried out by the Bureau of Labor Statistics in January this year, the restaurant labor force is still over 450,000 jobs below pre-pandemic levels — marking the largest employment deficit among all U.S. industries. 

In November 2022, the National Restaurant Association found that 63% of full-service restaurants and 61% of limited-service places are operating with fewer employees than needed to accommodate guests. 

At the beginning of February this year (2023), The Washington Post reported that although many industries have recovered since the start of the pandemic, 2 million hospitality and leisure jobs still remain open. 

“Hospitality is still stuck in the dark ages. High-friction ordering, slow and clunky payments, and labor challenges lead to low profitability and a poor customer experience,” notes Brian Duncan, President of me&u USA, a global leader in at-table ordering specializing in restaurants and bars. 

The labor shortage has led chefs and restaurateurs to reduce their workweeks, while some restaurant owners have had to increase the wages of their staff by as much as 20% in addition to closing earlier on weeknights. Others have even had to change their business practices to attract new employees.  

So, our Grocerant Guru® had the opportunity to ask Brian Duncan a couple questions about just who is using digital payments today. What percentage of current customers are independent Restaurants? 

Duncan continued, “For me&u this percentage is above 80%. This is primarily because independent restaurants have less red tape to make a decision and therefore can adopt new technology faster. However, quite a few corporate chains have signed on and we see this shifting to around 65% in the next 12 months.

Regular readers of this blog know that chain restaurants experiment early and often and generally get a little better deal. So, the team at Foodservice Solutions® asked can chain restaurants leverage their size for a better price? 

Duncan, “100% they can; but it is always based on volume. Price breaks usually come with chains that are ordering large volumes of a specific item. This is why restaurants are always looking to add menu items but no SKUs in order to keep their prices low while adding variety. Think of having a blue cheese burger, blue cheese on a salad, and blue cheese on a steak.”

Foodservice Solutions®, What type of training is required at the store level? 

Duncan, “The primary training required is a mental shift in the staff believing that the tool is there to help them do their jobs and not to take their jobs. Front-of-house staff can be weary of new solutions because their compensation is closely tied to the relationship with the customer. The primary goal of our staff is to gain the trust of the restaurant team showing them that the software will enhance their relationship and also put more money in their pockets.”

Foodservice Solutions®, What factors are impacting the restaurant and hospitality industries in the U.S.?  

Duncan, “Similar to all industries, there have been issues with labor shortages. Combined with the pressure to increase compensation for employees, inflation at all-time highs, and the pressure from consumers to not increase prices, it is a perfect storm. Restaurants are thinking outside of the box simply to survive in this new climate.”

Foodservice Solutions®, How can technological innovations help restaurants operate with limited staff and still increase revenue?  

Duncan, “The point of good restaurant technology should be to enhance the restaurant's ability to provide good customer service. Implementing technology that operates almost unnoticed by the customer while removing tasks from the staff that does not add value to the dining experience is the perfect solution.”

Foodservice Solutions®, How can self-service ordering and streamlined payment tools enhance customer experience? 

Duncan, “Creating great customer experiences happens when the front-of-house staff is engaging with the customer and not while items are being input into the POS or the customer is waiting on checks to be dropped and picked up. Order and pay at table solutions allow the customers to enter their own order and leave at their convenience when they have completed their dining experience all while enabling the front-of-house staff to provide an amazing guest experience.”

Technology can bridge the customer service gap when there are fewer employees available. Customers prefer to use self-service kiosks or access the menu by scanning QR codes because they can take additional time to read the menu, find new things to try, and customize their orders exactly to their preferences. 

Such technology means shorter waits at the counter, faster table turnover, and more accurate orders because the information is transmitted directly from the customer to the kitchen. Also, Pay-at-the-Table Technology cuts out the back-and-forth trips from the POS terminal to the table to process payments shaving several minutes off each table turn. 

“Manual orders are typically expensive, slow, and inefficient. Smart technology reduces labor costs, takes the load off servers, increases spending per order, and elevates the customer experience,” concludes Duncan.”   Are you looking a customer ahead.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter