PayPal plans to push a new pay-at-your-table feature in its mobile app in Australia early next year following trials in Sydney and Melbourne, the company has revealed.
The feature allows restaurant goers to pay for their meals without having to attract the attention of sometimes less-than-observant wait staff. Customers use the PayPal app to check into a restaurant based on their location and then enter their table number. The app pulls up the bill and gives customers the option to enter a tip.
When the payment is made, the app confirms payment on the user’s smartphone. The restaurant is simultaneously alerted to the payment on their point-of-sale terminal.
PayPal has had one restaurant using the feature in Melbourne for about four weeks, and currently the payment method comprises about 3 to 4 per cent of the share of total payments there, said Andrew Rechtman, PayPal director of SMB, retail and strategy.
Next week, the PayPal feature will launch at Bravo Trattoria, an Italian restaurant in Sydney’s Crow’s Nest neighbourhood, he told Techworld Australia after the PayPal Secure Insight event today in Sydney.
PayPal hopes to get 20 to 50 locations trialling it by the end of this year, he said. The company will amplify its sales push of the service in early 2014, he said.
The speed of the rollout is dependent on integrating the service with point-of-sale machines. OrderMate is the first POS vendor to integrate the feature, Rechtman said.
“The interesting challenge is how do you tell the customer about it?” Rechtman said. To encourage use, PayPal has decided to give incentives to wait staff at restaurants to tell customers about the feature, he said.
“We’re actually not giving any consumer incentive. We’re just giving incentives to staff and saying, ‘Hey, if you have a payment with PayPal, we’ll top up your tips by 20 per cent.”
Rechtman said restaurants are not concerned about confusing a PayPal customer for someone trying to cut on his or her bill.
“It’s pretty unusual for someone to do a runner at a restaurant. It may happen at McDonald’s but it doesn’t happen in sit-down restaurants very often.”
Rechtman said the pay-at-your-table feature will evolve over time, and in the next version there are plans to add a way for multiple users to split bills—similar to a feature Commonwealth Bank is including in new payment terminals. PayPal also plans to add a way for customers to actually order food at their table using the app, he said.
PayPal has also recently announced Beacon, a payments device that employs Bluetooth Low Energy (BLE) wireless communications technology so that customers in a store can pay without reaching for their smartphone.
Retailers plug in a USB dongle into a compatible point-of-sales system. When customers walk into the store with a smartphone and the PayPal app, they are prompted to check in for hands-free payments. The PayPal app does not need to be open and users don’t need to have a phone signal or GPS turned on.
The Beacon technology is aimed at retailers and possibly quick-service restaurants, but not table-service restaurants, said Rechtman.
“Will there be a Beacon on every table? Probably not.”
But in a supermarket setting, Rechtman said he envisions 50 Beacons around a store—in the deli and different aisles—that could send customers offers specific to the location.
“To be honest, we have no idea how it’s going to be used. It’s out there, and it’s up for the developers and the retailers to figure out what’s best.”
In his remarks at the Secure Insights event, Rechtman dismissed near-field communications (NFC) as a technology for payments.
“Is walking over to the cash register and tapping your phone on a reader really that different and that transformational from walking over and tapping your card as you do today?”
Rechtman also stressed PayPal takes privacy issues seriously as it deploys new payment methods.
“Permissions have to be granted by the customer,” he said. “It’s absolutely paramount that we maintain customer privacy and data security.”
Mobile payments are exploding, according to a PayPal report released at the event. Mobile payments have grown by more than 5000 per cent in the last three years, from about $35 million to $2 billion, the report found.
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