Pubs, taxis and pharmacies go digital as coronavirus shatters classic business models

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Traditional U.K. businesses found innovative ways to serve their customers under coronavirus restrictions. Iconic London black taxi cabs, independent local community pharmacies, old-fashioned pubs, and QSRs have turned to in-app mobile payments to enable their businesses to carry on.

A British pub’s bar is traditionally the heart of the venue, where customers congregate to place orders and chat with the bar staff and with each other. This model will have to change when pubs are allowed to re-open in July under strict social distancing protocols.

Young and Co.’s Brewery, a London-based pub chain, will be using its existing Young’s On Tap loyalty app to enable customers to order ahead and pay for drinks from their tables without coming up to the bar. Judopay, a U.K.-based in-app mobile payments provider, will provide the payments capability for the app, enabling it to accept credit and debit cards as well as Apple Pay and Google Pay.

“Under social distancing regulations, people won’t be allowed to stand at the bar in pubs, and will have to order at their table, for example using their phones,” said Jeremy Nicholds, Judopay’s CEO. “They will order by checking into the pub’s app when entering the pub, and an employee will either bring their drink to their table or to a collection point.”

For the hospitality industry, during the coronavirus pandemic, giving customers the ability to order ahead and pay on their phones will be vital, Nicholds said. “For example, as KFC, a client of ours in Europe, reopens its restaurants, it’s prioritizing the use of its app for ordering ahead and making payments,” he said.

Another Judopay U.K. client which offers an order-ahead capability is London-based coffee chain Caffè Nero. Its payments and loyalty app is provided by U.K.-based mobile wallet provider YoYo Wallet, with Judopay providing the payments capability.

“Digital pre-ordering and payments were already increasing in popularity before COVID-19,” said Miya Knights, head of industry insight at U.K.-based Eagle Eye Solutions. “The difference now is that digital pre-ordering and payments are a strategic necessity.”

Pre-ordering and payment will help businesses deal with restrictions on in-store customer numbers while minimizing contact with staff, Knights said.

“Operators likely pivoted to online ordering and home delivery when closed during the pandemic,” she said. “So it makes sense for them to extend the benefits of these digital transformation efforts by converting new online customers into visiting guests. I expect to see increased adoption of digital pre-ordering and payment technologies, as well as pre-booking systems, post-lockdown.”

The COVID-19 lockdown is promoting a trend that was already evident before the pandemic. Starbucks announced in June that it plans to close up to 200 Canadian outlets due to changes in customer behavior. The Globe & Mail reported that Starbucks will place more emphasis on mobile ordering, drive-thru and takeout services. Even before COVID-19, 80% of transactions in Starbucks’ U.S. cafes were “on the go,” and customer use of its mobile app was increasing.

Taxi transformation

Traditional London black cabs are looking to mobile apps so they can offer new services. London’s 20,000 black cab taxis have had a hard time during COVID-19 lockdown, with people not travelling and taxis being grounded. But, even before COVID-19, London's black cabs faced pressure from ride-hailing services such as Uber.

Former black cab driver Danny Mitchell came up with the idea of launching a business to turn under-employed black cab drivers into couriers. He realized that the pandemic posed a huge challenge for people who are self-isolating but still need to shop at their local supermarkets and pharmacies, as well as for businesses needing to send goods across London.

In May, Mitchell launched the Envoy Taxi app, which enables businesses and consumers to order black cabs to pick up and deliver a range of items such as food packages, prescriptions, National Health Service (NHS) medical equipment, and parcels.

According to Here360, at the end of May 400 black cab drivers had signed up to Envoy Taxi’s platform, with plans to increase that to 2,000 by the end of 2020.

Working with SafeCharge, a U.K-based acquirer, owned by Canadian processor Nuvei, Judopay provides the in-app payments and checkout capability for Envoy Taxi app.

Autocab, a taxi booking management firm with clients across the U.K., is also using Judopay to get into the dispatch business.

“You open up the Envoy Taxi app and provide the delivery information and then place the payment for the order,” explained Nicholds. “App-based commerce is what Judopay specializes in, which is why Apple chose us as an Apple Pay launch partner for in-app payments in 2015.”

Before joining Judopay in 2018, Nicholds worked for Visa where he led its mobile business unit, overseeing the arrival of Apple Pay and other Pay programs in Europe.

Once customers order a collection via the Envoy Taxi app, they can contact the taxi driver directly through the app’s messenger functionality and track the driver and their package in real time. Envoy’s pricing is based on the driver’s taxi meter, so customers get a set rate based on mileage.

“Judopay is the sole payment provider for the Envoy Taxi app, so any London black cab signing up to use the app as an additional source of revenue, will benefit from Judopay’s technology,” said Mitchell. “We chose Judopay because we were impressed by their mobile-first payment technology and their ability to integrate their payment solution into our newly launched app.”

A healthy alternative

COVID-19 poses a particular problem for the U.K.’s independent community pharmacies, which work under contract for the NHS. Vulnerable customers need to pay for medications, but don’t want to risk infection by physically visiting a pharmacy.

To solve the problem, Pharmacy Centre, which provides websites to 1,500 independent pharmacies, created an e-commerce platform with the help of Judopay and Mastercard.

The platform will enable Pharmacy Centre to process secure payments using Judopay’s PaybyLink solution. Merchants send payment links to customers via email or SMS, which they click on to enter their card details.

“For pharmacies which only took in-store payments previously, we offer a very quick set-up for online and mobile payments,” said Nicholds. “Though the partnership with the Pharmacy Centre is still in the early stages, there have been a lot of sign-ups.”

Oliver Harris, a Pharmacy Centre director, said his company selected Judopay for three reasons.

“Firstly, we wanted to offer a better transaction rate to our pharmacies,” he said. “Secondly, we chose Judopay because it offered easy on-boarding, both for customers and for us. Also Judopay took the time to understand the unique circumstances that U.K. independent NHS-contracted pharmacies operate under as well as their business needs.”

The U.K. NHS pharmacy sector is uniquely low risk, according to Harris. “We were able to communicate this fact to acquirers and underwriters in order to make it as easy and low-cost as possible for community pharmacies to take digital and card-not-present payments,” he said.

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Coronavirus U.K. Digital payments Mobile payments Payment processing Merchant