Restaurants Test Table Credit, Debit Card Readers

By John Voket

When every table is full at the Inn at Newtown, and almost everyone including the parents with wiggly kids call for their check, it may create a bottleneck at the register that could cost another five or 10 minutes.

That’s when Executive Chef Paul Olson thinks the restaurant, and customers could benefit from an electronic pay-at-the-table check system.

After all, it’s become routine for customers to swipe their credit or debit cards at consoles in fast-food joints, gas stations and grocery stores. So why do we still hand over the plastic at sit-down restaurants?

Pay-at-the-table systems are popular in Europe and other parts of the world, but haven’t caught on in the United States, largely because equipment makers haven’t been able to point to a reason why restaurateurs should invest in the gear.

But if Chef Olson thinks it can work at The Inn, other culinary and restaurant professionals might welcome it, too.

“I think this can be huge,” said. “This kind of system could really work here.”

Manufacturers now sell the security of the system based on a number of “skimming” scams which are creating a sense of urgency.

And then there are managers who simply want to speed the flow of diners during peak hours.

“At our busiest time, our servers might be handling four or five tables. That’s a lot,” Chef Olson said.

Alpharetta, Georgia-based Verifone system, answers the call with its VX-670 - 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.

“Restaurants are the last holdout where you still give up your credit card. That’s why we think this is the next logical step,” said Paul Rasori, VeriFone Inc’s vice president of marketing.

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 (HYC), is a sleek, handheld unit. But it also sports a touch screen 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 systems — which can cost several hundred dollars — as security threats increase.

At the Villa Restaurant in Sandy Hook, owner Vito Kala said he has heard of the technology but doesn’t see enough of a benefit to go looking for the technology, yet.

“We still take the check and bring it right back to the customer personally,” Mr Kala said. “I don’t know if this system would make any difference, really.”

Some studies suggest as much as 70 percent of all cases of credit-card skimming stem from restaurant scams. A 2005 report by Fair Isaac, the fraud-detection specialist, 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.

Nonetheless, Michelle Barbarie of Jim Barbarie’s of Danbury said she would need to be convinced customer’s credit card numbers weren’t being swiped from the air as they are being transmitted through wireless table readers.

“What if someone was outside with a laptop? They could intercept it and record every transaction,” she said.

The pay-at-the-table manufacturers say there’s another benefit: greater productivity.

“If we can tell them they can increase table turns on peak hours by 1 to 4 percent, what’s that worth to businesses?” said Scott Goldthwaite, vice president of Hypercom’s global business development.

But the potential market for the systems in North America — estimated to be as large as $438 million — has been slow to take off.

“How fast do the people really want to get out of here?” Ms Barbarie asked.

Currently, there may be skepticism because the first units out of the gate haven’t completely meshed their systems with cash registers and other hardware developed by restaurant management companies. But it’s 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,” Mr Peabody said.

Neither Verifone nor Hypercom would reveal the price of the units, but both have launched tests in US markets to gauge how the American diner reacts. Both companies specialize in secure electronic payment devices. Hypercom sells devices in Europe, China and Latin America. Verifone sells in Europe, Israel and Southeast Asia.

At Ray’s Killer Creek, an upscale steakhouse in the north Atlanta suburb of Alpharetta, the VeriFone system didn’t take long to catch on. Jim Wahlstrom, the restaurant’s operating partner, spent roughly 10 minutes on briefing his waiters about the technology.

“We’re all used to grocery stores and ATM machines,” Mr Wahlstrom said. “We all operate with our credit cards and debit cards in our daily lives.”

As the happy-hour crowd filed into the restaurant on a recent weekday afternoon, many seemed unfazed by the new way to pay.

When it comes to checking out fast and efficiently in a restaurant, Ms Barbarie firmly believes in the old stand-by.

“Too many people are worried about identity theft,” she said. “So just use cash!”