mobile payments

Mobile payments: Innovation for improved efficiency and customer convenience

By Alex Barrotti

Today, nobody leaves home without their mobile phone. It’s an indispensable device for people of every age – both for business and pleasure.

Given our increasing reliance on these devices, it only makes sense that mobile payments – paying for goods and services from a mobile phone – is a trend that is starting to take off and is likely to be the payment method of choice in the future. There is no need to carry around a bulky wallet with multiple credit cards and ID that can be lost or stolen, when all of that important stuff can be stored much more securely on a mobile phone that is always in the user’s pocket or purse. A lost or stolen phone can easily be wiped clean remotely so that no personal identification or payment information can be used by a thief. This is far simpler than cancelling existing debit and credit cards and waiting to get new ones.

With increasingly more consumers adopting mobile payments technology, savvy restaurant operators are either already accepting mobile payments or looking into the steps that need to be taken to offer guests a mobile payment option in the near future.

Mobile wallets are used to make mobile payments. A mobile wallet is an app installed on a mobile phone that a consumer uses to securely store credit cards, debit cards and banking information. Once set up, consumers can use their mobile wallet to pay for goods and services (including a meal at a restaurant) from their mobile phone (wherever mobile payments are accepted) – without giving a credit card, cheque or cash to the merchant. For mobile payments to work, however, both the mobile phone being used by the consumer and the merchant’s payment terminal must have an enabled NFC (near-field communication) chip.

Apple Pay now works with several Canadian bank cards, including ATB, Bank of Montreal, CIBC, Royal Bank of Canada and Scotiabank. Samsung Pay is also coming to Canada this year.

To transact a mobile wallet payment, the NFC chip inside the customer’s mobile device transmits the payment information to the payment terminal. To do this, the customer taps their mobile device on the restaurant’s payment terminal. The merchant then receives the payment directly from the mobile wallet. No private customer financial information or credit card data is ever transmitted to the merchant. The payment terminal could be a pin pad at the checkout register, another mobile phone or tablet, or an NFC-enabled hand-held device the waiter brings to the customer.

Many Canadian payment processors now offer NFC-enabled payment terminals and hand-held payment devices. Ideally, the restaurant point-of-sale (POS) system integrates with one of these payment processors. This eliminates the need for manual or double entry into the payment terminal, which is known to slow down payment processing and can cause billing errors.  Moneris and Chase Paymentech in Canada offer NFC-enabled terminals that integrate with popular point-of-sale solutions.

Most new versions of iPhone and Android phones have incorporated NFC capabilities. Even Apple’s new entry level phone, selling for $399 US, has NFC capabilities. As consumers tend to upgrade their phones every couple of years, increasingly more consumers now have mobile devices with NFC capabilities and are utilizing NFC contactless payments. A study released in May from Technology Strategies International estimated that Canadians made more than 1.2 billion contactless payments in 2015.

Mobile payments are a trend that is not going away. Leading mobile apps for the restaurant industry, such as OpenTable, have been looking into integration with restaurant POS solutions that will allow patrons to pay for their meal through the app, without having to wait for the server to bring the bill. We anticipate that many more apps that increase efficiency at restaurants and improve some facet of the customer experience will be launched in the coming years. While mobile payments can be made today from the Apple iWatch, in the near future we may also see internet-connected bracelets and other wrist-worn devices being used for mobile payments.

To take advantage of mobile payments in the most effective manner, a restaurateur should make sure its POS solution offers mobile payment integration. Ideally, the POS solution should offer free updates and downloads to integrate with the newest mobile payment apps and technology as they roll out, without requiring expensive service calls or hardware upgrades.

While mobile payments won’t replace established payment methods in the immediate near future, the reality is that the world is going mobile and restaurant patrons will increasingly expect the convenience of mobile payments where they dine. At one time, people were hesitant to make purchases on the internet, but today it is a common practice to which consumers don’t even give a second thought. You will see the same transition with mobile payments. Savvy restaurateurs want to be ahead of the curve in offering patrons the convenience that mobile payments can provide.

About the author:

Alex Barrotti, CEO and Founder of the TouchBistro iPad POS Solution for restaurants and bars, has a long history with emerging technology. Before TouchBistro, he founded INEX Corporation in 1997, a company that was at the forefront of e-commerce development and featured a software solution that helped storeowners create online storefronts with pre-designed templates. After selling INEX in 1999 for $45 million, Barrotti continued to use his experience with design and development by creating TouchBistro. Barrotti has emerged as a visionary in technology trends that create demand, first with online shopping, now with mobile POS and payments. TouchBistro iPad POS is the number #1 restaurant app in 37 countries.

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