Thursday , February 27, 2020

Square Aims to Declutter the Restaurant Point of Sale—And Stay Ahead of Merging Competitors

Merchant processor Square Inc. is making it easier for its restaurant clients to use third-party delivery services, while at the same time fortifying itself against bigger merchant acquirers slated to merge into even bigger ones.

San Francisco-based Square, which has its own restaurant delivery, pick-up, and catering service called Caviar, on Thursday announced integrations for its Square for Restaurants payment and business-management service with delivery services Postmates Inc. and DoorDash Inc. The company also said Square for Restaurants is now integrated with Chowly Inc., a Chicago-based software provider that feeds third-party delivery orders into restaurants’ point-of-sale systems, including those from Grubhub and Uber Eats.

With the integrations, restaurants can get rid of the so-called “tablet farms” on their countertops—the separate tablet computers they may need to process orders from various delivery services, according to Square. Plus, they won’t need to manually enter online orders into their POS systems. 

“Juggling different delivery platforms and managing multiple tablets is a huge pain point for our restaurant sellers, and now we are addressing this problem head-on,” Alyssa Henry, seller lead at Square, said in a news release. “Now all delivery orders, whether via Caviar, Postmates, DoorDash, or platforms integrated through Chowly, can be automatically sent to the point of sale and routed directly to the kitchen, helping sellers reduce labor costs, food waste, and other potential errors that result from manual order entry.”

The integration of multiple delivery platforms “is a big advancement” that enhances Square’s competitiveness, according to Krista Tedder, head of payments research at Pleasanton, Calif.-based Javelin Strategy & Research. Merchant acquirers Global Payments Inc., Total System Services Inc. (TSYS), First Data Corp., and Worldpay Inc. all have product lines that compete with Square, she notes. Global has a deal to acquire TSYS, while First Data and Worldpay have pending merger agreements with Fiserv Inc. and Fidelity National Information Services Inc. (FIS), respectively. 

“Without the integration, the merging companies would have had an advantage over Square due to their ability to integrate new features into their platform,” Tedder tells Digital Transactions News by email. “Restaurant point-of-sale systems are now more software-based than hardware-based. The extension of adding new software into their product means that Square understands the changing market dynamics.”

Tedder confirms that many restaurants need to use multiple applications or devices to handle third-party orders, and sometimes they need to manually enter the orders into their own systems. 

“If the restaurant is small and does not have the budget for the technology, they have been manually entering the details into their systems to collect payment,” she says. “When you need to manually enter the order, that also requires separate tracking of the finances because the restaurant is not paid immediately when the order is picked up. Merchant payments vary by delivery platform, so the restaurants manually track orders and pending payments. Integrating into Square means that order and payment processing helps restaurants effectively balance their books.”

Square said its Square for Restaurants merchants won’t be charged extra for the integrations with Caviar, DoorDash, Postmates, or future partners that may integrate with the platform. The company also said that for non-Square for Restaurants sellers, the integrations will be coming soon to Square’s point-of-sale app. 

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