Matthew Roberts, CEO of the popular restaurant reservation app OpenTable, remembers well how wary the restaurant industry was of online booking when the startup launched 16 years ago. How things have changed: OpenTable, which allows diners to reserve tables via a computer or mobile app, today seats 14 million diners a month across more than 31,000 restaurants. Now the company is hoping to once again transform the restaurant industry with technology—this time, by giving customers the ability to pay for their meals with their phones.
"What's exciting for us is this is our opportunity to do it all again," Roberts told Fast Company. "In a few years' time, we hope we'll be as known for [phone payments] as reservations."
Back in June of 2013, OpenTable acquired restaurant payments company Chalo for $11 million in stock, about three months after the service went live. By the end of July, news began to emerge that OpenTable was testing mobile payments, but the company remained mum on details. Preparing to exit its pilot, OpenTable will release the mobile payment feature to iOS users in San Francisco later this week, to see how the city's diners take to it. Mobile payments on Android is a work in progress, however, and the company's mobile payments lead Kashyap Deorah (who cofounded Chalo) wasn't able to specify a timeframe for its release.
As with online reservations, Roberts said the challenge is getting restaurants on board. "Every bit of feedback, the excitement from the diner side of this is scoring very, very high," he said. "We need broad-based adoption by restaurants. That's totally familiar to us. Nobody would've loved online reservations if there were only 10 restaurants."
To achieve that broad-based adoption, Deorah said the systems for managing reservations and processing transactions make it clear to participating restaurants which diners might use OpenTable's iOS app to pay. A major concern about paying for meals via app is potential confusion—that awkward situation wherein a waiter accuses a guest of ditching the check. To address this, OpenTable has sprinkled reminders throughout the restaurant's end of the system. In the guest code field, which is where special requests from diners typically appear, the host sees a note that the customer is eligible to pay with the OpenTable app. In the restaurant's table-management system, tables are prefixed with "OT?" to signify that the diner at the table has the option to pay with the app (the question mark disappears after a diner pays). When the waiter pulls up a bill on the restaurant's computer system, he or she sees another reminder that the customer has the OpenTable mobile payment feature on their phone. The restaurant's point-of-sale software also displays OpenTable as a form of tender.
In contrast, the diner's experience is meant to be almost invisible. "We're not forcing people to engage," said Deorah. "They engage at their own terms when they want." If diners choose to look at their phones after they've been seated, they'll see a banner indicating that the app is in "dining mode." Once the order is entered into the system by the waiter, diners can also see the check, including a list of all the items on their bill and their corresponding prices.
For servers, nailing down the right time to bring the check has always been a balancing act: too early and a guest might feel rushed, too late and a guest might be in a rush. Paying via app gives consumers control over how their dining experience ends. Guests can flag down a waiter and hand them a card, or they can pay with their phones and leave when they're ready, without getting the waiter's attention. After adding a tip in the app, diners confirm the payment by sliding their finger across their phone's screen. At this point, the system notifies the server, who upon closing the bill sends a mobile notification and email receipt to the diner.
Eventually, OpenTable will also turn on the ability to split checks, likely around the time its Android app is released, said Deorah. The code for this exists already, but the company disabled the feature to avoid "adding an extra level of complexity," he said. OpenTable is still figuring out the fee structure, but it aims to be competitive with the existing interchange fees credit card companies charge. But money, Roberts said, isn't the objective at the moment. It's getting restaurants on board, and the company hopes the feature can prove its worth.
"What [the restaurants] want to know through the beta is: As these transactions grow, how much more money are you making me? How much more are you saving me? Is this resulting in bigger checks, bigger tips, more loyalty? Will it bring new people because it's a new product?" he asked.
Though OpenTable hopes to woo restaurants with simplicity, there is one very complicated task that comes with adoption: installation. Fragmented point-of-sale systems pose a challenge for bringing new restaurants on board. Even as OpenTable rolls out mobile payments, San Francisco only has about a dozen restaurants equipped to accept it. "This is not a snap your finger and we'll have 10,000 restaurants on this thing," Roberts admitted.