By Grant Drummond
Ingenico
The hospitality industry was an early adopter of credit card payments, but it lags behind recent advances in payment methods and technology. Where but in a restaurant would consumers let credit cards out of sight for several minutes, inviting such fraud as card skimming and tip boosting?
Progressive restaurants have adopted technology that has been used in Europe for over 10 years. It allows patrons to pay at the table quickly, efficiently and safely. Why not introduce the rest of the hospitality industry and other markets to the ease and security of tableside payments?
Pay-at-the-table solutions benefit customers, wait staff and restaurant owners alike.
Customers get more payment choices, higher security and faster checkout. Restaurant owners save significantly on transaction costs because they can now accept PIN-based debit without the inconvenience of asking customers to come to a payment terminal.
Savings vary from business to business, but a typical $50 credit card transaction costs about $0.87. A $50 purchase costs as little as $0.41 to $0.50 as a PIN-based debit transaction. That is a savings of over 40%.
Tableside payment saves tremendous time for customers and wait staff. No longer do servers need to:
In addition, this tedious process typically involves two contacts with the host computer, which further increases costs for owners. With tableside payment, the server simply brings the payment terminal to the table and, if necessary, assists in completing the transaction.
PIN entry, tipping and tab splitting are all completed at the table. Since wait staff can serve more people faster, the efficiency gain is tremendous. Further, with increased table turns, customers are less likely to walk out during the wait.
For additional efficiency gains, tableside payment may be integrated with POS stations. When a customer asks for the bill, the server can swipe a server card or enter a server number on the portable terminal.
The server then prints the bill and completes the transaction with the customer without returning to a workstation. Fewer trips to payment terminals mean less fatigue and greater efficiency.
Restaurateurs who piloted tableside payment programs saw an increase in average tips because the terminal provides tip calculations. An accurately calculated 15% tip is usually higher than one calculated in one's head.
For instance, on a $73 bill, customers are likely to calculate a $10 tip while the terminal suggests $10.95, an increase of almost 10%. Finally, the security of tableside payment systems also prevents any potential embarrassment and damage to reputation as a result of fraudulent activity.
There are three types of tableside payment systems. For small to mid-size restaurants without a Wi-Fi infrastructure, the most efficient option is a short-range Bluetooth-based system with a 1,000-foot range.
Up to seven plug-and-play Bluetooth transaction terminals communicate with a base, which then transmits transactions to the processor via telephone or Ethernet. Internet protocol communications from terminals to base and base to processors are encrypted.
Contact with the host is necessary only once for initial setup.
Wi-Fi systems are preferable in large installations because an infinite number of terminals can communicate to a receiver linked to an internal network router. The router, in turn, sends the communication to the processor by telephone or Internet connection.
However, while Bluetooth systems are secure out of the box, the Wi-Fi platform is not secure unless its security features are enabled. Payment solution providers concerned about liability may want to oversee the installation of Wi-Fi systems.
A third tableside payment system is long-range wireless general packet radio service (GPRS). This option is appropriate, for instance, for restaurants that combine home delivery and dining room service. Both servers and delivery personnel use the terminals.
Since PIN-based debit transactions require a higher level of security, payment and order placement should not be combined in one terminal. Having two separate systems also offers increased redundancy in case of systems failure.
The payback time for tableside payment systems can be as short as three months, depending on the number of servers and terminals, how much the restaurant pays in transactions fees, and how many credit and cash transactions can be converted to PIN-based debit. The value of intangible benefits is inestimable, from the comfort and security offered to customers to the avoidance of negative publicity caused by unscrupulous activity.
Like any new technology, customers will have to grow accustomed to tableside payment. To facilitate this, business owners can set up informative table tents introducing the technology and its benefits.
In an online survey conducted by Legal Sea Foods, 84.1% of people answered yes to the question, "Would you feel more comfortable if a credit card transaction took place at your restaurant's table?"
Boston-based Legal Sea Foods has implemented a tableside payment system, as has Hooters of America. "With the emergence of new technology that aids criminal activity, we are implementing this system to deter theft," said Wes Marco, Hooters' Director of Information Systems.
"Although there has never been a case of any identity or credit card theft at Hooters, this new technology will ensure that our guests feel comfortable and secure when paying with their credit cards."
Marco estimated the savings in interchange rates compared with traditional credit and signature-debit transactions will pay for the investment within two years. Hooters tips have also increased substantially.
Tableside payment systems don't require a table. Beyond restaurants, payment systems vendors can open up vast new markets with this new technology.
Car wash operators, for example, can take payments from customers waiting in line, preventing loss of business from people who become frustrated with delays and leave before their cars are washed.
In spas and hair salons, patrons can save time by paying while completing their services rather than waiting at the counter to pay afterwards. Other markets are cosmetic counters, jewelry stores and the like.
The possibilities are limitless.
Grant Drummond is Director of Marcom with Ingenico, a worldwide provider of electronic payment and secure transaction solutions. For further information, please visit www.ingenico.com, e-mail grant.drummond@ingenico.com or call 416-245-6700.
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