Payment Options and Considerations for Today’s Laundromat Owners
[This is the first of a two-part feature on payment acceptance options for laundromat owners.]
As a laundromat owner in 2022, you need to give yourself as many opportunities to succeed in your business as possible. One way is to stay up to date on your customer base’s preferred methods of payment.
By understanding the benefits of the various payment options available, you can decide which make the most sense for your laundromat and your customers.
According to the Coin Laundry Association’s 2022 Industry Survey, the quarter is still king in the laundromat industry, with 91 percent of store owners who responded stating that they accept coins as payment. However, the tide is indeed turning, with just 40 percent of respondents indicating that their businesses were coins-only operations.
Here are how the remaining payment acceptance platforms broke down in popularity with laundromat owners:
- Credit/debit cards – 34 percent
- Mobile apps – 33 percent
- Laundry cards – 26 percent (Seven percent of owners indicated their laundries were “laundry-card-only.”)
- Dollar coins – 12 percent
- Smartphone payment, via Apple Pay or Google Pay – 5 percent
- Tokens – 3 percent (One percent of owners indicated their laundries were “tokens-only.”)
Cash is, of course, the most basic payment method you can accept. It doesn’t require you to research payment processors or worry about fees.
However, the pandemic has shifted consumer payment behavior slightly. McKinsey & Company reported that cash transactions declined 16 percent globally in 2020, with the U.S. seeing a 24 percent fall in cash payments. However, cash acceptance is still expected by many, if not most, in the laundromat industry.
Credit cards and bank-issue debit cards have been around for a while, but their use is far from plateauing. In fact, research from BAI Research and Hitachi Consulting show that 41 percent of consumers are going cashless often, and 97 percent of survey respondents are turning to credit and debit payments over currency.
In part because of numbers like that, accepting credit and debit cards has become the norm. In fact, it’s the bare minimum for retailers looking to keep pace with consumers and competitors – and laundromat owners seem to be following suit.
Of course, the one often-expressed drawback are the fees. Processing credit cards means having to accept the associated transaction fees that payment processors charge. While these fees can vary, they average between 1.5 percent and 3 percent of the total sale.
Another payment method experiencing rapid growth over the last few years is mobile and smartphone payment, also known as contactless payment. These include common smartphone payment options like Apple Pay, Google Pay and Samsung Pay.
In 2021, more than four out of 10 U.S. smartphone users took advantage of contactless payment at least once. Moreover, the use of mobile payment apps such as Apple Pay and Google Pay is expected to double between 2020 and 2025.
After all, smartphone use surpassed six billion users worldwide in 2021 and is forecasted to increase by several hundred million in the next few years. And, due to the pandemic, a recent report by Insider Intelligence stated that in-store mobile payments increased by 29 percent in 2020.
Now that consumers have experienced the ease of carrying all of their payment options on their phones and don’t need to touch unsanitary money or machines, Statista has reported that contactless technologies are projected to generate more than $220 billion in 2023, just in the U.S. alone.
You’ve just been hit with a lot of numbers. However, if you only remember one statistic, remember this one (from global online business community CustomerThink): nearly 50 percent of consumers who can’t use their preferred method of payment will abandon a purchase.
That’s right… nearly half of customers would rather walk out the door.
That’s a lot of revenue left on the table simply because you don’t accept as many payment methods as you perhaps could.
In Part 2 of this feature, several laundromat operators will share their thoughts on the payment methods they offer – or are considering offering – their customers.
