Case Study: Frozen Yogurt Chain Integrates Payments Into Mobile App
Merchant: Orange Leaf Frozen Yogurt
Size: 304 locations
Platforms: FIS, Paydiant, Valutec
Bottom Line: Franchise businesses are looking for mobile payment solutions that they can use without investing in expensive hardware at the POS.
No clear frontrunner has shown up in the mobile wallet space, and businesses like Orange Leaf Frozen Yogurt are tired of waiting for one to appear. Instead of utilizing an existing mobile payment platform, the frozen yogurt chain is rolling out its own mobile wallet as part of an update to its iPhone and Android app.
“We feel that the mobile wallet is coming, [but] it’s been slow to adopt, as I think most people have probably seen. It’s not quite there yet,” says Mike Christy, director of IT for the Oklahoma-based frozen yogurt chain. “There’s a lot of different technologies out there when it comes to mobile wallet, but the way we feel this will be implemented, it will be easy for the customer to use.”
When its mobile payments solution debuts this summer, Orange Leaf customers will be able to pay for purchases with their smartphones at the POS. Cashiers select mobile as the payment method, a QR code appears on the screen, and the code is scanned to complete the payment. “Tokenized information” is then transmitted through the POS system, and the payment is processed immediately.
“What we’re really trying to do is empower the customer and put the control in their hands. It is their wallet, and they approve everything over their phone. It’s not really approved at the POS or the cashier register, because that potentially could slow down the process,” Christy explains. “Doing it this way, it gives the customer the control and the visibility that we feel they’re going to want.”
Orange Leaf has partnered with FIS and Paydiant to add mobile payments and loyalty features to its existing mobile app, in part because the vendors were able to build a solution that worked with the POS systems that Orange Leaf already had in place. Although Christy says the new solution will require some software upgrades, franchise owners won’t have to install any new hardware, which is a process that would be both expensive and time consuming.
“Any time you come to a point where people have to spend money on something, they need to understand the benefit and value. And because it’s a mobile wallet, people are still questioning if it’s a value or if the longevity of it is there,” Christy says. “I think for most of the franchisees who have actually seen a demo of it, they love it. Well over the majority are excited and really want this because they see that this can reach and touch a far younger demographic.”
The seamless integration process was a key reason why Orange Leaf opted to work with FIS and Paydiant, as opposed to any of the other vendors that regularly pitches the company with hyperlocal marketing solutions. Christy explains that adding a wallet to the company’s mobile app involves very little investment at the store level, and says the platform that FIS and Paydiant have developed is flexible and scalable.
“Their platform does allow for growth, whether it be mobile wallet standards or just mobile wallet advances in the technology. It’s not like an NFC, so to speak, where you have this hardware and this type of technology. This will allow for future payment technologies, whether we look at iBeacon or whatever else is out there,” Christy says. “We were really nervous to pick someone at first, but because they’re so flexible and so open, we really felt good about the decision.”
Still, the rollout has not been without its challenges. In addition to working with FIS and Paydiant, Christy is also consulting with Valutec, which handles Orange Leaf’s loyalty program. He and his team have been working on adding mobile payments and enhanced loyalty features to Orange Leaf’s mobile app since October of last year, and they plan on testing the update at two pilot locations to ensure the integration is working properly before debuting it at all 300+ Orange Leaf outposts.
“There’s a lot of moving pieces,” Christy says. “[There’s] a lot of different parties, a lot of different companies, so it’s taken a while to get to this point.”
Once Orange Leaf’s mobile payment solution is fully rolled out and integrated with its loyalty program, Christy hopes to have better visibility and access to customers. At the store, brand, or enterprise level, he plans on using phone messaging to send corporate-level coupons to customers.
“In the past, it was very difficult for a store to potentially market through their area, but with this technology they can,” Christy says. “A store manager can go in and say, ‘We will do X for the customers that are registered in my area,’ or whatever the case may be. [That will] save the store money and marketing costs and also reaches the customer faster. Then hopefully by that point, the customer can have a better experience and a better relationship with the ownership.”
Businesses are much more likely to be interested in adopting hyperlocal solutions when those solution do not require them to change out their existing POS systems or invest in new hardware. By working with the platforms that merchants are already using, vendors decrease the barriers to adoption and make it easier to onboard new clients. This is particularly the case for large franchise organizations like Orange Leaf, where hundreds of individual franchise owners would typically be responsible for fronting the costs of any hardware upgrades.
Stephanie Miles is a senior editor at Street Fight.