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Trend Watch: New devices speed service

Restaurateurs enjoy efficiency, customers like pay-at-table security

By Lauren Kramer
February 01, 2007

One of the most common disgruntlements of American diners is the process of paying the bill. It can take a long time for wait staff to deliver the tab, pick up the credit card and return it to the customer after the payment transaction has been processed. In the meantime, the patron is held captive at the table, and when a restaurant is humming, that wait can feel endless.

There are other gripes to relinquishing credit cards in restaurants. The restaurant industry is the only venue where customers must turn their cards over to a complete stranger who leaves their sight in order to pay the bill. And any time you do that, the opportunity for fraud arises. Identity theft due to credit-card skimming exceeded $1 billion in 2002, according to Michael Friedman, director of emerging technologies at the Mercator Advisory Group in Waltham, Mass., and 70 percent of it occurred in restaurant settings.

In Europe, the industry tackled this problem some time ago with the introduction of wireless, handheld, pay-at-table terminals that allow patrons to swipe their cards and complete payment with independence and speed. Only in the last six months has this technology been tested in the American market, with pleasing results to date.

Fatz Café in Winder, Ga., has been testing eight VeriFone Vx670 wireless handheld credit-card terminals in its restaurant. "We call it the On The Spot Payment Solution, and we designed it specifically for restaurants," says Rob Regan, VeriFone's VP of hospitality systems. "It's spill resistant, smaller than other devices of its kind and extremely simple to use for servers and guests. Also, it can accept debit cards and credit cards."

Steve Corson, VP of human resources and training for parent company Fatz Café Enterprises, says the testing has gone well. "Our customers seem to be catching on to it and taking to the wireless terminals the longer they are in use," he says. "Our servers are also happy, because they've seen an increase in their tips since the introduction of these terminals."

The Vx670 features a built-in calculator that prompts restaurant patrons to choose a 10, 15 or 20 percent tip, or an amount of their choice. Choose one of the first two options and you don't have to calculate the tip yourself. Winder servers are averaging tips of 15 to 20 percent after the introduction of the wireless terminals, which is more than what they were tipped before the system was installed, says Corson.

Wireless credit-card payments initially caused a stir at the Fatz Café in Winder, particularly after they were featured in a local television commercial, says Conrad Skelton, the restaurant's manager. "People were coming in specifically to use it, they were so excited about not having to give up their credit cards," he says.

"It definitely speeds up service, because you just drop it off at the diners' table and briefly explain how it works. The simplicity and durability of the machine is what makes it so good," says Skelton.

Speed of service has been a pivotal issue at Legal Sea Foods, where over the past six months the Ingenico i7780 pay-at-table handhelds are being tested at three restaurants: the Legal Test Kitchen and Long Wharf locations in Boston, and the Framingham, Mass., restaurant.

"It's a big change for both guests and employees, so we've been going slow in terms of adapting our software and listening to guest feedback, but we've had 95 percent positive acceptance of the wireless payment terminals," says Ken Chaisson, VP of information technology for the 33-unit restaurant chain.

"Many of our restaurants operate on waits of anywhere from 45 minutes to two-and-a-half hours," he continues. "We were really focused on looking for ways to increase our table turns, and this shaves off minutes, which counts significantly."

Legal Sea Foods used Bluetooth wireless technology between May and September 2006, but switched to an 802.11 wireless network after that, which allowed for a wider usage range within the restaurant. In the next year or so, the chain will be adopting a new POS system by SIVA, which wrote the software for the pay-at-table solutions.

Hypercom is another company with a cutting-edge mobile wireless payment terminal. Its version, called the M4100 Blade, weighs 7 ounces, is battery operated and features rubber encasings around the magnetic stripe reader, making it spill and grease resistant. It has an optional clip-on printer, an illuminated, color-coded keypad and uses Wi-Fi or GPRS communications options.

"Both will give you a range of 100 meters to a base station," says Ed Mastrangelo, Hypercom's director of wireless products.

Right now, the Blade is available in limited quantities for beta testing and piloting, with full production scheduled for this month.

"It's competitively priced, that's all we can say," says Mastrangelo. Regan estimated the price for a VeriFone Vx670 would be less than $1,000 per terminal. The number of terminals required by a restaurant would depend on its individual needs, but the CTS Group, which analyzes the software, hardware and communications technology necessary to 
bring pay-at-the-table to restaurants, estimates the average cost will be between $12,000 and $15,000 per location.

Is it worth the capital investment? Definitely, says Friedman of the Mercator Advisory Group.

For one, pay-at-table wireless terminals can save restaurants money through their acceptance of PIN debit usage, which can be less expensive for a restaurant than credit-card payments. "Consumers are demonstrating a measurable preference for PIN debit transactions, driven by their added security and the fact that these transactions are self-serviced," Friedman says, noting that between 1999 and 2005, PIN debit usage increased from 11 to 19 percent.

"This is a very powerful tool for preventing fraud in restaurants, and simultaneously providing a high level of service to your customers," Friedman says. "Also, I think these wireless payment terminals can be a distinguishing feature and image enhancer for a restaurant, translating into a real competitive advantage."

 

Contributing Editor Lauren Kra m er lives in British Columbia

 

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