“They assume that it’s just a price game. Some systems are better than others. On some systems, a transaction can take nine seconds. The same terminal with different processor can take 20 seconds. The small to mid-sized chains just considers price,” Drysdale says.

The largest franchise for Pollo Campero restaurants, Adir Restaurants Corporation, made the decision to invest in a high-quality POS system in its 14-location operation and has seen credit card payments (the company does not accept debit cards) reach 20 to 25 percent of their total sales volume.

Carlo Divitia, Adir’s director of finance and chief financial officer, says the company has high-speed broadband connected POS terminals that report card sales that can be easily downloaded and integrated into the company’s financial records.

The decision to start with a top-quality payment system when the company was in its infancy seems to be paying off. “When we had four stores, we brought the technology upfront so we could move forward and grow,” Divita says. “We wanted service to be number one, so we thought ‘Let’s spend money on technology so we can make it easier for store terminals.’”

Credit card payments are a benefit, Divita says, but the company just has to keep shopping for the lowest fee rate.

That benefit could grow much larger, Drysdale says, as a new generation of quick-serve customers wants to use a card to pay for everything. “Basically, cash and checks are approaching obsolescence. There will be no such thing as cash for my kids. What’s replacing those transactions from a quick-serve standpoint are debit cards,” he says.

Paying with a debit card that requires a personal identification number (pin) is the fastest growing type of card payment, followed by a debit card, sans PIN input, and credit cards.

Younger customers, who are part of the coveted 18–40 year old demographic, will increasingly seek to pay for everything with a swipeable or waveable card payment. “Eighteen- to 29-year-olds, even 12 to 18 year-olds do not want to use cash. They consider it dirty, uncool, their father’s Oldsmobile. The younger the consumer, the less likely they are to use cash,” Drysdale says.

Because of this trend, quick-serve restaurants with a “10-dollar minimum on all credit cards” sign are doing a great disservice to their business. That sign sends the message to customers that the restaurant is just barely tolerating the use of cards and is probably depressing sales, Drysdale says. “Someone who is using [that sign] is not talking to the right companies regarding merchant services,” he says. If set up correctly, a quick-serve’s electronic payment system should allow them to get lower rates for smaller transactions and ultimately accepting card payments will increase sales.

One medium-sized chain has seen the effect of this trend in dramatic terms. Lewis Loeb, chief financial officer for McAlister’s Deli, says that three to four years ago, his company recorded 10 to 12 percent of their sales in card payments. Now, the company makes over 35 percent of its sales in cards.

They are looking into a system where anyone paying less than $20 for a meal will not have to sign a receipt.

Card payment systems seem to be a no-brainer for Loeb. “We feel like that’s what our customers desire. It’s something that is a necessity for us, all of our competitors offer cards,” he says.

If smaller chains do not know what they are doing with card payments, they can turn a promising positive business operation into a liability.