By John Stewart
Mobile payments have invaded many areas of consumer commerce, and now they’re about to show up in sit-down restaurants. Dallas-based Ziosk LLC said late last week it will add capability for Apple Pay and Android Pay acceptance to its custom-built Ziosk tabletop tablet starting early next year.
The company will also add readers for EMV chip cards and has already introduced a new point-to-point encryption capability in 600 restaurants in an arrangement with Element, a unit of merchant processor Vantiv Inc.
Founded early in 2007, Ziosk has about 150,000 tablets now deployed in 3,000 locations belonging to casual-dining chains like Chili’s, Olive Garden, Red Robin, and Uno’s. With the new EMV and mobile-payments capability, the company will be retrofitting these deployments, says John Regal, chief marketing officer. “The Ziosks in the field are all field upgradeable,” he tells Digital Transactions News. He can’t give details of how this will work, citing a pending patent, but says the process will be “idiot-proof.”
Running on the Android operating system, the Ziosk features a 7-inch screen that can display menu items, games, and consumer surveys. Customers can order their meals and pay for them when ready. In each restaurant, there is a device “at every single table,” says Regal. The idea is convenience, both in ordering a meal and in checking out. “When you want to pay your check and go, you want to go,” Regal says, rather than wait for a server to come by. The checkout process involving the familiar black folio and the server walking away with a credit card takes about seven to 10 minutes to complete, he says.
Consumers seem to be responding to the convenience. Ziosk tablets will process about $4 billion in transactions this year, representing some 80% of all payment volume in the restaurants that use the devices
Regal will not discuss the Ziosk’s cost. “It’s expensive, but it really pays off,” he says. “It’s getting enormous usage.”
One of the devices’ selling points is its 22-hour battery life, which allows it to remain in operation on tables throughout the day and night. That duration shouldn’t be affected by the field upgrade to EMV and contactless payments, Regal says. “This is one of the reasons we ended up building our own device,” he says. “We didn’t want to be in the hardware business, but the only way we could provide the device we needed was to build it ourselves.”
Observers say the upgrade to EMV may matter more than the addition of Apple Pay and Android Pay, as popular as those services may prove to be. Adil Moussa, principal at Omaha-Neb.-based acquiring consultancy AdilConsulting, says the mobile-payments capability for a sit-down restaurant may be a first, but it’s more gimmickry than anything else. “The restaurant doesn’t care,” he says, and neither does the customer. “I’m not in a rush, I don’t need to tap and go.”
EMV on a tabletop tablet entirely controlled by the customer, on the other hand, is more useful, Moussa says, because it could solve an awkward problem that EMV poses for sit-down establishments. Customers paying with EMV are uncomfortable having a terminal brought to the table and entering a tip while the waiter watches over their shoulder, Moussa says. “That’s really the problem a lot of restaurant owners face: how do I present the bill to the customer with some discretion and be EMV-compliant,” he says.
Ziosk also faces competition. At least two other startups, TableSafe Inc., Kirkland, Wash., and Redwood City, Calif.-based E la Carte Inc. offer tabletop tablets for sit-down eateries. And Austin, Texas-based TabbedOut Inc., which relies not on tablets but on customers’ own smart phones, recently raised $21.5 million in a Series C round, thought to be the company's last funding round before an initial public offering.
But Regal is unfazed. “Our goal is to be the leader in the industry,” he says.