ALPHARETTA, Ga. -- It has become routine for customers to swipe their credit or debit cards at consoles in fast-food restaurants, gas stations and grocery stores. So why do we still hand over the plastic at sitdown restaurants?
Pay-at-the-table systems are popular in Europe and other parts of the world, but they have not yet caught on in the United States, largely because equipment makers have not been able to point to a reason why restaurateurs should invest in the gear.
Manufacturers now see an opportunity, said the Associated [image-nocss] Press. A rise in the number of "skimming" scams in which waiters use handheld computers to quietly record customers' credit card information and sell it is creating a sense of urgency. So is an increased push by managers to speed the flow of diners during peak hours.
"Restaurants are the last holdout where you still give up your credit card. That's why we think this is the next logical step," Paul Rasori, VeriFone Inc.'s vice president of marketing, told the news agency.
Verifone's system, called the VX-670, is about the size of thick remote control and sports a square LCD screen and a numerical keypad. It accepts debit and credit cards and can automatically add the tip.
Once the customer swipes a card, the information is sent wirelessly to a computer in the restaurant. A tiny printer spits out a receipt.
The Blade, a competitor from rival Hypercom Corp., is a handheld unit. But it also sports a touchscreen that can double as a menu and an optional contactless reader that lets customers wave their cards instead of swiping them.
Both companies are betting restaurants will be more willing to buy the systemswhich can cost several hundred dollarsas security threats increase.
Some studies suggest as much as 70% of all cases of credit-card skimming stem from restaurant scams. A 2005 report by fraud-detection specialist Fair Isaac detailed how handheld skimming devices could take seconds to transmit data wirelessly to a fraudster and advised merchants to use table-side devices so cards are always in a customer's hand.
The pay-at-the-table manufacturers say there is another benefit: greater productivity.
"If we can tell them they can increase table turns on peak hours by 1% to 4%, what's that worth to businesses?" Scott Goldthwaite, vice president of Hypercom's global business development, told AP.
But the potential market for the systems in North Americaestimated to be as large as $438 millionhas been slow to take off, partly because manufacturers have not completely meshed their systems with cash registers and other hardware developed by restaurant management companies. But it is also because many manufacturers have to better sell the benefits, said George Peabody, director of emerging technologies advisory services at the Mercator Advisory Group. "They've got to prove a real market need, and it's got to be really clear," he said.
Neither Verifone nor Hypercom would reveal the price of the units, but both have launched tests in U.S. markets to gauge how the American diner reacts.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.