Recently, a story swept its way through social media detailing the changes mobile phones have brought to restaurants. According to an unnamed New York City restaurateur with a penchant for security cameras, guests are taking nearly twice as long to eat their meals. The reason: they’re too distracted by their cellphones. While that story might not be actually true, it does identify a growing problem in the restaurant industry – customers won’t put down their phones. NPR’s Alan Greenblatt sat down with some restaurant insiders to get their perspective on cellphones in restaurants. While servers may want customers to put their phones away, restaurant owners may want customers to keep their phones out. Mobile apps are a hot trend in restaurant technology – particularly payment apps. These apps give customers a new way to settle their tabs – after finishing their meal they can simply leave. The whole payment process happens over their smartphones with little to no intervention from the restaurant.
Recently, OpenTable announced they were launching a payment app at over 45 restaurants in New York City, with plans to open in 20 cities by the end of the year. While they are not first to the market, they are already familiar to diners and restaurateurs throughout the country. With their established brand, OpenTable will be able to develop and market their payment services with relative ease. Currently their offering has limited features (no splitting checks) when compared to other players, but this is the company to watch out for. OpenTable’s emergence in NYC will seek to compete against Cover’s current grasp in the NYC and SF marketplace where it is currently used by over 100 restaurants. Cover has a much richer set of features – like check splitting. Its thoughtfully developed consumer experience has the potential to make OpenTable’s entrance into the market an uphill battle.
Other apps are close behind OpenTable and Cover. Emerging services like Dash and TabbedOut are also fighting to become the Uber of the restaurant world. The Wall Street Journal reported in an article a few months back that Amazon has been working on a handheld POS system while Apple is discussing methods of payment using their iPhones and iPads, already popular as POS devices. It seems like every week there’s a new entry into this already crowded space. But there are at least two huge problems. The problems can be summed up in two basic questions:
‘Will restaurants sign up for the service?’
These services require direct participation from restaurants. At the moment a restaurant may accept OpenTable, but not Cover (or vice versa.) While restaurants accept most major credit cards, the agreements are handled through merchant services. With the new payment apps a restaurant has to come to an agreement with each company individually. The fastest way to annoy a restaurateur is to complicate their day, so in our estimation this is a serious hurdle to widespread adoption.
‘Will consumers adopt these new services?’
So far the answer has been a very tepid “maybe” that leans toward a “no.” The New York Times reported “Many people are not aware of the new payment systems, others are confused by the many choices, and some see no benefit in the mobile option over using cash or credit cards.” For mobile payments to become the norm companies need to prove to consumers the value of using their phones as payment devices. With time, consumers may come around – just as cards replaced checks, phones may supplant cards.