There’s little more frustrating for a restaurant guest ready to leave than waiting for the server to bring the check, biding time for the credit card payment to be picked up, and then lingering for the card to return. A number of full-service restaurant and bar operators have found a solution in mobile payment options that allow guests to pay their tab from their phones.
Blockheads, a 10-unit New York City chain, is using a mobile phone application created by MyCheck that allows patrons to pay when they’re ready to go. A mobile app from TabbedOut lets diners at Doc’s Bar & Grill in Austin, Texas, do the same.
“It’s a great convenience for our guests,” says Don Sofer, partner at Blockheads. “Our average age group is 23 to 30, and the entire world at that age is on their smartphones. So for them to be able to pay their bill by phone improves their overall experience.”
Less than two years after Apple Pay was launched—a move that many observers envisioned would revolutionize electronic wallets—there are dozens of companies grabbing for market share in the industry, from giants like Samsung to startups such as LevelUp.
Most of the time, this involves paying for items at the point of sale, whether it’s a shirt at Macy’s or a Frappuccino at Starbucks. According to market research publisher Packaged Facts, mobile payments will jump 54 percent this year to roughly $23 billion. But for full-service restaurants and bars, something else is required for a point-of-sale mobile payment: a system that can continually track an open tab.
“In hospitality, you often have to open a tab, and sometimes that is going to be open for a long time,” says Alex Broeker, chief executive of TabbedOut, based in Austin, Texas. “We give guests the option to pay their tab when they are ready.”
It all comes down to making the experience more convenient for diners. “The core capability is to allow guests to view their bills in real time and make payments at any time,” notes Frances Zelazny, executive vice president of New York City–based MyCheck. “This is integrated with other features we can build into the apps.”
Complete point-of-sale integration can include customer rewards and benefits, as well as other engagement activities. “Guests can use [the app] not only to pay but also to redeem loyalty benefits, obtain special offers, and provide feedback,” she adds.
Patrons check in on their app and receive a code to give to their server, who will enter the code into the point-of-sale system. Guests can view the running check on their phones, and, when ready to leave, can select to pay the entire bill or to split it. The receipt is sent electronically and a survey option can be included.
At Blockheads, the mobile payment system not only allows guests more flexibility and the ability to pay when they want, but it helps the restaurants turn tables more quickly. It also allows the operator to target its regular customers for promotions and surveys.
“The ability to communicate with our loyal customers has been a way in which we’ve benefited the most,” Sofer says. A recent email survey to its 12,000 mobile app users asked what type of free food offer or discount they might prefer with a takeout order, and that query received 2,400 responses. “We never had anything like that before.” Doc’s mobile payment works similarly, except that the company is among many with a page on TabbedOut’s mobile application, rather than having its own app. TabbedOut has about 5,000 active clients, split 65/35 between restaurants and bars.
J.T. Smith, director of operations at the four-unit restaurant chain, says when he began looking for a provider to do mobile payments and a loyalty program, TabbedOut “blew everyone else away,” especially in compiling the metrics of purchases. “Not only do they have a great platform for paying at the table, but their dashboard shows all kinds of information,” he explains. Customers are also asked about their experience, and a negative response generates an immediate text message to the manager, who can seek out the guest to discuss the issue. Using the system requires very little training for servers, and Tabbed-Out responds to any technical problems “in minutes,” Smith says.
Broeker adds that TabbedOut payment results in slightly bigger checks than credit cards, upward of 25 percent higher tips, and it helps restaurants turn tables up to 10 minutes faster.