Apple Pay and Mobile Wallets Could Change Consumer Tipping Behavior
With all of the hype surrounding the new apple pay system, we have been speculating about what will happen to tipping culture here in the United States. Yahoo Tech pointed out that there are 31 service professions that include and depend on tipping. That includes your servers at restaurants and your coffee barista. With everyone paying on cell phones, who has change left to tip with?
For years, we have already been watching the decline of cash and change in general. Even homeless folks have gotten used to hearing "Sorry, I only have a credit card." As payment moves from credit cards to mobile devices, we have to believe that number of people who carry cash/change in pocket will continue to decrease. There are three viable scenarios that we've generated, but none of which are guaranteed to occur.
- Scenario 1: Nothing changes and people continue to write in tips, such as with the current credit card system.
- Scenario 2: Tips gradually get smaller and smaller until the service industry is forced to overhaul a new system into place involving automation, or a demand for compensation (AKA prices increase to accommodate for servers and servers become salaried employees).
- Scenario 3: People don't see the value in a mobile charge as they would see when leaving a cash tip; and, as a result, tips go up as the social norm for tipping is increased.
The truth is that there are dozens of other scenarios and combinations of each that could prove to be fact at some point down the road. We have to believe that things will change by industry, by demographic, by location, and by a million other factors. Overall, we are excited to watch it happen. Are you in the service industry? What do you think will happen?