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Innovations and Payment Systems

Swipe your own credit card at sit-down restaurants

Summary

The Verifone VX 670 allows transactions to be made at the table, keeping credit cards out of servers’ hands.

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The next time you’re at a restaurant, instead of handing over your credit card to pay the tab, a waiter could bring a handheld pay-at-the-table device. Swipe your own credit card, add a tip and total out the bill right at the table, so your card never leaves your sight.

At the Austin, Texas, Ruth's Chris restaurant, server Louie Alarcon, left, and general manager Sal Olivas demonstrate how to use the Verifone at-the-table credit card scanner. Photo by Mary Hopkins

Swipe and go
At the Austin, Texas, Ruth’s Chris restaurant, server Louie Alarcon, left, and general manager Sal Olivas demonstrate how to use the Verifone at-the-table credit card scanner.

It’s not likely you’ll run into one of these devices today, but a half dozen firms are betting that you will soon. Of the more than 900,000 restaurants in the United States, only a few thousand now offer at-table swiping. Grant Drummond, director of marketing communications at Ingenico, a Toronto-based manufacturer of the devices, predicts that they’ll be in 80 percent of restaurants by 2012. As their usage spreads, they could reduce opportunities for fraud and identity theft credit card that arise when consumers hand over cards with servers who ring up bills behind the scenes.

The opportunities for problems are always present with credit cards, but rise when cards leave their owners’ line of sight, as has been customary in restaurants. Small, inexpensive card readers nicknamed “skimmers” or “wedges” allow dishonest servers to steal and resell card data. The skimmers are on the market as a legitimate way for merchants to grab card data embedded in magnetic stripes, but their low cost and small size makes them popular with thieves.

Pay-at-the-table scanners haven’t exactly taken over the North American restaurant world. Compared to $50 or so for a wedge, the new all-in-one “portable cash registers” can cost about $500. Penetration into the market is tiny. The device’s manufacturers would not discuss their estimates of adoption rate today or forecasts for tomorrow, but they’re eager to tout the machines’ advantages.

For consumers, the advantages include:

  • Assurance for security-conscious diners.
  • Easily created separate checks for multiple diners.
  • Extra receipts for customers who want them or lose the first one.

Scanners also whip problems for the servers, the device’s proponents say:

  • Customers can choose from three tip percentage levels chosen by management, so no more napkin-scribbled math or scrawny tips from math-challenged customers. Generous customers may leave more, but it has to be in cash.
  • A customer can’t accidentally walk out with the restaurant’s signed and tip-totaled copy of the receipt.
  • The scanners reduce the time it takes to pay, increasing turnover.
  • The devices accept PIN-based debit and PIN-based credit card transactions, which cost restaurants less to process than signature-based transactions.

Common elsewhere
In Europe and Asia, the countertop scanners have been popular for years because skimmer-using thieves were more common, says Ingenico’s Drummond.

The scanners’ proponents admit the devices aren’t foolproof. While the information scanned from the card is not held in the devices, it is broadcast to the restaurant’s main data-processing machine. So just as with any wi-fi, cellular or Bluetooth device, security is only as strong as the encryption. It’s up to the restaurant managers who buy the devices to opt for the strongest type, says John Spence, security strategist for Ingenico.

Customer reaction
Sal Olivas, general manager of the Ruth’s Chris steakhouse in Austin, Texas, became the first restaurant manager in the state and in the Ruth’s Chris 100-restaurant chain to use the scanners. Olivas says he’s never seen skimming at his restaurant, as his servers have been with Ruth’s Chris for a long time, but he wanted to be among the first to change the system.

Ruth’s Chris customers have mostly reacted two different ways. Some are insulted by having to run their own cards; other customers love it.

“My staff knows their customers,” Olivas says. If a server suspects a customer might be uncomfortable swiping the card, the server does it, at table-side.

Not my job, some patrons say
At Alpen Rose in Holland, Mich., reactions have been extreme on both sides, said a manager, who didn’t want to give her name. The devices definitely speed up table turnover, she said, but some customers feel it shouldn’t be their job to run through their cards.

In focus groups, some people say they feel rushed by the devices, Drummond says, and they feel awkward about having to choose the tip while the server is standing there.

Cara restaurants have signed on systemwide, says Pete Bartolik, public relations spokesman at VeriFone, which calls its device On the Spot. Aqua Blue in Alpharetta, Ga., and Carey Hillards in Savannah, Ga., also use On the Spot, Bartolik says.

Olivas of Ruth’s Chris went with Verifone after two different makers of the at-the-table scanners approached him. Some of the other North American manufacturers are Hypercom, Cyndigo and Ingenico. In Europe, two of the companies are Thales and Sagem Montel.

VeriFone’s Vx 670 is about as big as an old-fashioned telephone receiver and has a square LCD screen and a numerical keypad. Competitor Hypercom’s Blade offers a handheld device with a touch screen that doubles as a menu. The Blade also features an optional contactless reader that allows payment with a wave of the customer’s credit card rather than a swipe. Ingenico, based in Toronto, has sold a lot of its devices in Europe and on the West Coast.

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