Detailed by the New York Times, the restaurant reservations company OpenTable is branching out into the mobile payments market. While an OpenTable user typically only uses the reservations service prior to visiting the restaurant, a new feature within the OpenTable application will accept payments via credit card for the meal. Rather than having to flag down a busy waiter or waitress to get the check and wait for the return of a credit card statement at the end of the meal, an OpenTable user would simply launch the application on their smartphone or tablet, review a digital copy of their bill, decide on an appropriate tip and pay the check.
Interestingly, OpenTable doesn’t want a cut of the revenue when processing the transaction. The company only requests that the restaurant pays the credit card processing fee, basically the same amount of money that the restaurant would pay to a credit card processing service.
However, OpenTable does charge restaurants when reservations are made using the service. There’s also a monthly service charge involved for using hardware provided by OpenTable.
The benefit to restaurant patrons is clearly time flexibility. A couple that’s attempting to catch a movie at a specific time may prefer to pick a restaurant that offers OpenTable mobile payments just to have the flexibility to race out of the restaurant at the end of the meal. However, OpenTable is currently trying to solve the issue of the waiter or waitress becoming aware of the mobile payment, otherwise they could end up accusing the customer of trying to skip out on the check. One solution would be sending a notification to the entire wait staff or perhaps just the waiter or waitress that’s handling the table. This would require linking an employee identification code to the OpenTable system.
At the moment, the beta test of OpenTable’s mobile payments system is rolled out at twenty restaurant locations. Assuming the test is successful, OpenTable plans to launch on a citywide basis in San Francisco by the end of the year and will likely expand out in major cities within the United States.
Potentially, OpenTable could roll this payment feature out to all 28,000 restaurants in the company’s database. This technology is being powered by a company called JustChalo which OpenTable acquired for $11 million during mid-June 2013.
This new feature cuts directly into the business of Tabbedout, a mobile application that allows customers to pay for their restaurant or bar tab immediately without speaking to the wait staff. However, Tabbedout also offers a feature that allows a user to join a tab and split the check with their friends. There’s also an additional element of marketing promotion that allows the restaurant to send coupons and discounts to the Tabbedout user for the current visit or future visits.
Beyond the monetary features, users can leave feedback about the dining experience through the Tabbedout interface and check out their dining history with a particular restaurant or bar. While Tabbedout offers significantly more features than the planned OpenTable interface, it will likely be difficult to compete with OpenTable’s established relationships with restaurants around the country.