This is an excerpt from Dollar Scholar, the Money magazine where managing editor Julia Glum teaches you the modern money lessons you NEED to know. Don’t miss the next issue! Subscribe to money.com/subscribe and join our community of 160,000+ scholars.
Sometimes I write about more serious topics, like payday loan abuse, how to handle unexpected medical debt and whether Social Security will still be around when millennials retire.
But honestly? Usually, the money questions I’m most curious about are the most trivial. I’m curious if it’s okay to have dolphins on my checks, or if $2 bills are officially rare and why the government can’t just print more money.
Here’s a good example: Last year, when I was grabbing a drink at a bar near Union Square in Manhattan on Halloween, I saw many people using digital wallets on their phones to pay bills. Given how dangerous bar etiquette can be, I wanted to know…
Will the sellers get upset if I tap to pay?
I was worried that deviating from the standard practice of handing out my physical card would upset a busy salesperson who didn’t have the time or equipment to deal with it. But T. Cole Newton, owner of Twelve Mile Limit in New Orleans, tells me that paying with a tap on my phone or card is usually no big deal.
“It’s disturbing in the sense that it’s still not normal and needs a bit of a fix,” he adds. “But the total time taken by the transaction is not that different.”
Jeffrey Morgenthaler, bartender and owner of Pacific Standard in Portland, Oregon, points out that contactless payments have grown in popularity since the pandemic began, with a focus on how much touch is involved in swiping a card or handing over cash at the register.
“The world has changed, and this is how things are happening now,” he said. It is natural that customers expect the bar to accept tapping to pay: “Why should my payment behavior change depending on where I was?” Morgenthaler asked.
Among customers, it clearly continues.
Payments from digital wallets such as Google Pay or Apple Pay are on track to make up nearly 30% of point-of-sale (POS) purchases in North America by 2030, according to one report; 79% of consumers say they prefer to use contactless or mobile payments in restaurants especially, according to another. Customers say these payment methods are safer, faster and more convenient than other options.
“I love it,” said Joey Fredrickson, board director and treasurer of the US Bartenders’ Guild. “My wallet has three cards on the back of my phone, [so] I’m in that pool, myself, of people who will be clicking.”
Still, he adds, it all depends on the bar’s POS setup.
At one of the bars Fredrickson worked at recently, employees were walking around with handheld devices they could use to record orders and have people pay on the side. This greatly reduced paperwork – managing bills meant he didn’t have to enter tips from piles of receipts every night.
I can’t expect all the diving in the country to be so advanced. Dr. Shocker, one of the owners of Pele Utu, a tiki bar in Reno, Nevada, tells me it’s very strange when old systems force bartenders to use a standing register behind the bar.
“If someone wants to use their phone, they have to turn on their phone… [we] run to the program and try to touch it in time,” he says. “If it works, it’s great. When it works.”
The biggest problem comes with the launch tabs.
If someone opens a tab with a physical card, Newton says they can swipe it back to the right, knowing the system has captured their data. But some systems do not support pre-authorization with digital wallets.
“In a perfect world, our computer systems and our phones and payment processing would have the ability to run a tab with a tap,” said Morgenthaler, who is also the author of the book. The Book of the Bar. “We’re not there yet.”
Tabs are great for bar staff because they make transactions faster. If I close after every drink (and I sit for many rounds), it takes time to cover my bill over and over again, which means the bartender ends up wasting time rather than charging me once.
While bartenders may be agnostic about the faucet that will pay, the bells and whistles of not opening the tab really annoy them.
“When we’re behind bars, every second counts,” Morgenthaler said. “If we can save three seconds here and five seconds there, we can feed more guests. We ourselves can make more money.”
If I’m willing to use my phone or smartwatch to pay and intend to stay a few rounds, I might ask the bartender if I can start a tab using my last name. Fredrickson says this is normal and perfectly acceptable (in the places he’s worked, at least).
“Most of the time, tapping to pay isn’t as big a deal as closing the tab after each drink,” says Dr. Shocker.
An important point
Bartenders are still preparing for contactless payment. Some think tapping to pay is easy; others face outdated systems that make it even more difficult.
“The biggest thing for me is that, as a business owner, I want there to be many different ways that people can give me money,” said Newton. “Anything easy.”
As long as I’m not a badass, maybe the bartender won’t care how I pay. It’s my interaction (and my tip) that matters, not how the actual currency exchange plays out.
