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Startup 2014-05-29

Banks leveraging 'restaurant deals'

Banks are earning good returns by offering deals on dining. Online table reservation using debit and credit cards is a normal affair these days and with banks offering discounts on such cards, the whole process is benefiting every party involved.

By Deputy Features Editor
Banks leveraging 'restaurant deals'

How are banks promoting the deal?

Banks are trying different measures to promote restaurant deals and are very much specific about the deals that they offer on cards. For example, banks are executing both offline and online deals and for the offline deals (the deal which a customer gets directly by showing the debit/credit card at the payment counter), banks circulate pamphlets and leaflets among the customers and also use newspapers and magazine advertisements. While promoting online, they partner with major online food delivery websites like Foodpanda and JustEat. Besides, banks are also using emailers and bulk SMS campaign for promotion.

Rohit Chadda, MD and Founder, Foodpanda, says, “In the offline market, banks are basically targeting the high spend, fine dining market because the chances of customer holding a credit card for fine dine restaurant is much higher rather than people who order from takeaway outlets or QSR.”

Discounts offered on cards

The percentage of discounts offered by the banks on their cards totally depends on a particular restaurant. The discount may start from five percent and may go to 30 percent. For example, brands like Market Cafe, Moti Mahal Delux, Havemore, Kainoosh are a few restaurants which are offering a discount of 15 percent on the purchase of food and beverages served at their restaurants using Citi Bank cards. On the other hand, HDFC bank promoted Food Fiesta deal which is valid till June 2015 is offering a 10 percent discount on ordering food using their cards.

Parag Rao, Senior Executive Vice President & Business Head – Card Payment Products & Merchant Acquiring Services, HDFC Bank, says, “The offers usually depend on the spend category, specific partners and the offer duration. It can be anywhere between 5-30 percent.”

Sahil Joshi, Restaurant Manager, Lazeez Affaire, says, “We are offering 15 percent discount on all our food and soft beverages on Citibank credit and debit cards valid till 31st December 2014.”

Specialty restaurants

Not only the fine dine segment but the multi cuisine restaurants and quick service restaurants are tying up with banks too. Major QSR giants like Pizza Hut, KFC and fine dine restaurants like Bukhara, Pind Balluchi, Kainoosh, Dum Pakwaan amongst others are open to these offers as they are also seeing good opportunities.

“Offering discounts through debit and credit cards is the best way to promote the restaurant business as it attracts larger clientele”, says, Dharmendra Choudhary, Restaurant Manager, Pind Balluchi.

Profit margin

Rao says, “Spends are growing faster on debit cards than credit cards. It’s a sign of maturing consumer spend because people realise the core difference between a debit card and a credit card and people are exercising their choice and the banks get the maximum profit out of the deal”. He further says typically most of the discounts go to the merchant and if the profit generated out of the deal is 70 percent, 50 percent will go to the bank and other 20 percent will be shared by the online ordering portals and the restaurants.

With the increasing number of diners using credit and debit cards, the restaurant merchants understand the importance of securing credit card data. Yet to be cautious and careful while sharing personal data while ordering food online is the mandate for today’s consumers.

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