Electronic payment on the rise

by Patrick Nolan

SBJ Contributing Writer

For years credit card acceptance has been expected at retail stores, hotels, restaurants and airlines.

In today's market, people expect to use a variety of electronic payment cards debit, credit and ATM cards for a variety of expenditures.

The government has gotten into the electronic payment game by providing cards to welfare recipients instead of the traditional food stamps through a program called Electronic Benefit Transfer.

"We used (Electronic Benefit Transfer) in Texas," said Rick O'Brien, with Smitty's Grocery Stores. "It works better for the retailer and the consumer. It is easier to track."

While the system has been in Missouri for one year, it is not so new to other areas of the country. O'Brien said the system has been in use for a couple of years in Oklahoma and Kansas.

Bill Griggs, director of store systems for Dillon's stores, said Dillon's started accepting EBT in Missouri last year. Dillon's had been accepting EBT in Kansas for almost four years.

"As far as food stamps, it is easier and faster to handle food stamps using EBT," Griggs said. The use of other electronic payment forms is also increasing.

Many stores are also accepting debit cards, ATM cards and, in major markets, some are are experimenting with smart cards. Smart cards, according to Visa International, are plastic bank cards with microchips imbedded in them.

The smart card can communicate with a range of devices to provide account access, including point-of-sale terminals, ATMs, personal computers, mobile phones and telephones.

Griggs said the use of credit cards and other forms of electronic payment continues to increase. "We accept debit, or what the customer will call an ATM, card and credit cards," he said.

In a study commissioned by MasterCard and conducted by Information Resources Inc., it was found that once consumers used credit at a supermarket, 57 percent continued to use it in future shopping visits.

Visa reported on its Web site that the average supermarket shopping ticket almost doubles to $42.46 when consumers use credit cards.

Griggs said Dillon's had not noticed any increase in tickets from consumers that use credit cards, although the credit card companies say there is a difference.

"Ninety-nine percent of credit card usage is not in the express lanes," Griggs said. "It's for big orders. Forty percent of the (supermarket) industry business comes from express lanes."

O'Brien said the changes in the past 10 years have made accepting credit cards more convenient. "It's a lot of progress over having to call for authorization on amounts over $100," he said.

Griggs agreed. "Today there is no doubt that credit cards are a fairly quick form of payment," he said. "Our customers save an average of five seconds in line (by using credit cards instead of checks). It's our job to keep these lines reduced so the customers' time is held to a minimum."

There have been numerous studies in relation to the costs of accepting electronic forms of payment, Griggs said. The Food Marketing Institute has done several studies that measure customers' time in line, labor for accounting of receipts and the time differences all through the cash-handling process.

Ultimately, Griggs said, "credit cards are cheaper to accept than checks or cash."

O'Brien said a small percentage of Smitty's Springfield business comes from debit cards.

"We liken (accepting debit and ATM cards) as a service to the customer, part of doing business," he said. "We look for what the customers want and try to meet that need."

Dillon's approach is similar, Griggs said. "You need to be able to accept all these media to be competitive in the grocery business today," he added.

PHOTO CAPTION:

Springfield resident Cheryl Gayles uses her bank debit card at the Dillon's store at the corner of St. Louis and National streets to pay for groceries. [[In-content Ad]]