Tech Transformers

Mobile payments are making people tip more at meals

Mobile payments: Making you tip more?
Mobile payments: Making you tip more?

Mobile payments are set to explode over the next few years and while tech companies might be excited by the profits to come, there is a another group of people also looking forward to the technology – restaurant waiting staff.

Restaurants and mobile payments companies told CNBC they have seen a boost in customers tipping when using apps on their smartphones to pay for meals.

La Patagonia, a rustic Argentinian restaurant in the middle of London reported a 4 percent rise in tips since it first started using Zapper – a South African-based mobile payments app. Zapper allows people to scan a code on their receipt and adjust the tip on their smartphone.

"We are offering better service because now they (customers) don't need to wait so long to pay…they can pay straightaway…so we have improved our service," Mila Salvatierra, general manager at La Patagonia, told CNBC, explaining one reason for the rise in tips.

‘Fun experience’

Other mobile payment start-ups have also said that the use of their apps has boosted tipping. London-based Cake app allows diners to see their bill in real-time and split the bill. Through the app, a restaurant can set a default service charge but Cake co-founder Michelle Songy said people are often paying above the minimum.

"We do see increase at bars where people haven't been tipping. I'd like to think as we are trying to make the payment experience a bit more fun, easier or quick it leaves you with a better experience," Songy told CNBC by phone.


And the sector is only set to grow: Mobile phone and tablet users will make 195 billion mobile commerce transactions annually by 2019, up from 72 billion this year, according to Juniper Research. (Tweet this)

A number of companies from Apple to Google have their own mobile wallets which allows users to store credit and debit card details as well as pay for items. And some apps such as Zapper and Cake are focused on paying at restaurants.

Money ‘doesn’t feel real’

One of the reasons behind the rise of these apps, their founders said, is the sometimes long process of paying for a meal. They hope that the apps will make paying enjoyable and quick.

Flypay, another restaurant payment app, said it had seen people paying between 10 percent and 15 percent tips on the total bill. This is higher than what people would pay when using a card, which was below 10 percent.

The ease of paying combined with the fact that using a smartphone doesn't feel like "real money" is one of the drivers behind the rise of tips, according to Flypay's CEO, Tom Weaver.

"If people are leaving cash, they will leave an amount that is reasonable for them so tends to be a low cash tip," Weaver told CNBC by phone.

"The great thing about digital payments is it doesn't feel real as the cold hard cash in your pocket."