Sub­way’s New Recipe for Pay­ments

The sand­wich chain has tried more than once to mod­ern­ize its or­der­ing process. Its lat­est ef­fort may be its most am­bi­tious.

ISO & Agent - - INSIDE 09/10.2017 - BY NICK HOL­LAND

The na­tion­wide sand­wich chain has tried more than once to mod­ern­ize the way it han­dles pay­ments. Its lat­est ef­fort may be its most am­bi­tious.

Sub­way is a clas­sic ex­am­ple of an ana­log com­pany that needed a dig­i­tal up­grade. The sand­wich chain is pi­lot­ing its new “Fast For­ward” de­sign in a dozen restau­rants, re­vamp­ing in-store de­sign with a new color pal­ette, cu­rated music, com­fort­able seat­ing with USB charg­ing ports and com­pli­men­tary Wi-fi, but the up­grade is more than cos­metic — the chain is ex­per­i­ment­ing with tech­nol­ogy to en­able faster cus­tomer through­put with self-or­der kiosks that han­dle pay­ments as the sand­wich is built.

Sub­way is one of the world’s largest fran­chises, with over 45,000 restau­rants glob­ally. This means that to cre­ate any kind of chain­wide over­haul, the com­pany must con­vince count­less fran­chisees that it is worth their ef­fort to in­vest. Thus, this new sys­tem must be more than an ex­per­i­men­tal up­grade; it must prove its worth be­fore it goes in place.

This isn’t Sub­way’s first time try­ing to over­haul its point of sale tech­nol­ogy, but it’s a lot more am­bi­tious.

Back in 2014, Sub­way was a ma­jor sup­porter of the tel­cos’ Soft­card mo­bile wal­let, launch­ing sup­port at 26,000 lo­ca­tions in what was then one of the largest NFC wal­let de­ploy­ments. This move, which roughly co­in­cided with the U.S. launch of Ap­ple Pay, tied into Sub­way’s re­wards pro­gram and ex­tended its 2013 sup­port of Soft­card’s pi­lot in Salt Lake City.

De­spite its am­bi­tion, this part­ner­ship didn’t change much for Sub­way pa­trons. Soft­card shut down in early 2015, sell­ing off its tech­nol­ogy to Google. More re­cently, Sub­way has signed on to sup­port Mastercard’s Master­pass, but the les­son of its Soft­card al­liance was clear: To suc­ceed in mo­bile, Sub­way can’t pin its hopes on a third party.

With Fast For­ward, Sub­way is more fo­cused on what’s go­ing on in its stores than what’s go­ing on in the broader pay­ments in­dus­try.

“We didn’t look at other mer­chants; we talked to our cus­tomers,” said Trevor Haynes, vice pres­i­dent of op­er­a­tions at Sub­way. “We con­ducted con­sumer re­search in Brazil, Aus­tralia, the U.S. and other lo­ca­tions around the world. We asked our­selves, Do cus­tomers come in more of­ten when there is a kiosk in restau­rant; do they spend more? We told our­selves if the cus­tomer doesn’t no­tice the kiosk, we take it out. What we found was the de­signs were very well re­ceived around the world.”

Ul­ti­mately, fran­chisees will have op­tions for how to de­ploy Fast For­ward. “For in­stance, some restau­rants may not have kiosks or the back-of-house line based be­cause of its size and the needs of the guests. There are dif­fer­ent de­sign tiers to fit the needs of each lo­ca­tion,” Haynes said.

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