It has been three years since Covid brought the world to a screeching halt. Many enjoyed their time off from work. Some chose to spend more time with family, friends, or enjoying a new hobby. But some worried about the future of their businesses.
During Covid, I worked on the front lines. Well, a different front line. Not nearly as important as those working in the medical system. However, I found that business owners needed to save just as much. The survival of their business was at stake. The Fintech industry played a crucial role in the evolution of not only small businesses but also large corporations during the last three years. Automation and surcharging helped combat shutdowns, staff shortages, and inflation.
Ironically enough, legislation that happened after the housing crash in 2008 played a vital role in the current economic climate that we face today. In July of 2010, The Dodd Frank Wall Street Reform and Consumer Protection Act was passed. This legislation had a small amendment with major consequences that has altered the landscape in the payments space ever since.
The Durbin Amendment paved the way for merchants to now find creative ways to alleviate merchant acceptance costs by passing it to the consumer. Translation, merchants can create a dual price for both card and cash acceptance. Usually these programs are advertised in the form of a discount for paying with cash. What it is really doing is creating a price increase to offset card costs while maintaining the original goods price as the cash price.
By implementing these programs merchants saw small financial relief immediately. That’s why we saw the greatest adoption rates of these kind of programs over the last two years. Now that the dust has settled, we are still seeing overwhelming demand for these programs.
The debate isn’t if these programs will disappear. Instead, it is how they will be implemented moving forward. Technology will be the driver to ensure that these programs remain aligned with the card brands’ compliance. Surcharging and dual pricing will become more common over time.
Amazon is one of the most successful business models in the history of capitalism. There are many ways to describe their success. I use one word - ‘Automation’. Now, we can all debate if it’s right or wrong for technology to replace people. I am here to tell you that it doesn’t matter what you think. It is already happening all over the country. Major changes to any industry are usually done by large corporations first. Self-checkout kiosks, QR codes, mobile delivery apps, and the shift to e-commerce will continue to happen. You as a consumer have most likely already experienced these technologies.
Technology evolves faster and faster, and shifts to automated payments will continue to grow. McDonald’s for example just launched their first fully automated location in Fort Worth, Texas. There are zero employees at this location. Consumers can order from their phones and pick up their food from a mechanical arm in the drive-thru. Or, if they choose to sit inside, they place
their orders at a payment kiosk, then a robot food cart delivers food directly to the table. Automation.
Even on a local level you can take a ride over to Crumbl Cookie and order from a payment kiosk or stop at a Circle K convenience store and place your items on a platform to be rung up immediately. In the future small business owners will start to implement more technology once it’s reasonably priced and they see the benefits that it can bring.
I started in this industry in 2007 and have seen it evolve drastically in that time. The near future seems extremely healthy for us at Gateway. The demand for our services has only skyrocketed like many other industries with the increased growth in the Panhandle and lack of infrastructure to support this growth. I do, however, fear that at some point in my life technology will make us irrelevant as well! All we can do day to day is evolve like any other small business.
The last three years have shown us where the future of the retail and restaurant businesses is going. Surcharging and automation are here to stay.