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MyCheck
- Diners create or join a virtual table within the app. The app displays a four-digit code for the table, which the server then enters into the restaurant's point-of-sale system.
- Integration with the restaurant's payment terminal system allows PayPal to display a running list of the table's order within the app (as pictured). Diners can select which menu items they want to pay for.
- Alternately, the check can be split evenly according to number of diners, or by a variable percentage.
PayPal has tried other restaurant solutions with varied success, including a similar offering in the UK, where it has been partnered with MyCheck for at least nine months. Another attempt at integrating the feature, which involved scanning a barcode, failed memorably during an interview in Silicon Valley between PayPal CEO David Marcus and a Forbes reporter earlier this year - the restaurant had failed to upgrade to the software that could generate the bar code. "The challenge is not only scaling the technology but having people understand it on the merchant side," Marcus told Forbes at the time.
With this latest attempt at restaurant payments, eBay-owned PayPal is trying to make adoption as hassle-free as possible for end-users. It's also clearly trying to fend off competition in this payments niche. The OpenTable app and start-up Cover (whose CEO we interviewed recently) are also trying to win the restaurant market.
PayPal
FACEBOOK E-COMMERCE ANNOUNCEMENT: At its f8 developer conference, Facebook announced that e-commerce platform provider Ecwid will now offer Facebook's autofill feature to its merchant clients, according to TechCrunch. Facebook's autofill form is intended to make checking-out on e-commerce sites easier, for both the buyer and seller, by automatically completing forms with user payment information on file at Facebook. Facebook could potentially become a payment processor itself (i.e., doing the back-end work of processing credit cards for merchants). But that seems unlikely. There are all sorts of regulatory and consumer trust issues that come with that, and the space is already highly competitive, with low margins. Facebook said that at this point it will not charge companies for the autofill feature. As it stands, Facebook's payment revenue comes in at just under 10% of its ad revenue.
PAYMENT PROCESSING GIANTS PIVOT TOWARD SERVICES: Several of the largest payment processing and payment hardware companies in the U.S. reported earnings yesterday, and revealed clues to their strategy as the industry struggles to adapt to new technologies and merchant demands for all-in-one systems and services. Here's our roundup:
- FIRST DATA - During the first quarter earnings call yesterday First Data CEO Frank Bisignano emphasized that the payment-processing giant was moving from a processing-first company to a services business, focused on helping businesses tackle management and growth problems. First Data has made an effort to acquire the right expertise. That includes board member Joe Plumeri, who joined First Data in August 2013, and has been focused on the client side of the business. First Data has also been poaching executives from large mortgage companies and banks. Cindy Armine will join First Data May 12 as chief control officer (she was formerly chief compliance officer at JPMorgan Chase & Co.). The company has also hired Sanjiv Das, who also joined earlier this year as chief of staff and previously ran CitiMortgage. Bisignano also highlighted the recently launched Clover Station next-generation point-of-sale terminal, which integrates customer and business management software. First Data has struggled with an enormous debt burden since a leveraged buyout led by KKR in 2007. Bisignano was brought on to turn First Data around and has been at the helm for a year.
- HEARTLAND PAYMENTS - Heartland CEO Bob Carr said there's a big opportunity in the upcoming late 2015 deadline for merchants in the U.S. to switch to systems compatible with new EMV credit cards and debit cards, which contain a microchip to make them more secure. To date, Heartland had shipped between 90,000 and 100,000 EMV-capable hardware devices. Heartland faces competition for smaller merchants from startups like Square that supply software and equipment that transforms tablets and smartphones into mobile registers. In response, Heartland has acquired a Square competitor, Leaf. But it's also aiming to move toward larger merchants, who need more services and consulting. "I think your going to see Heartland become more and more of a business services company," says Robert Baldwin, principal accounting officer. Heartland's average merchant does about $400,000 of Visa/MasterCard volume, executives said. But the company would like to see that number climb as it aims for larger merchants.
- INGENICO - CEO Philippe Lazare said his company is having success with its Square-like mobile payment terminals, part of the company's portfolio of payments hardware and support services. Lazare did acknowledge doubts about whether the target market for these systems - small- and micro-merchants - will become a profitable business segment. Ingenico also benefited from extremely strong growth in China which is becoming the important market in the payment terminal industry because of low terminal penetration and high demand as the country moves towards electronic payments.
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