Wireless terminals have been touted for years as a way to extend electronic payments to taxis, at-home service providers, and other merchants that traditionally have not accepted payment cards, but now several terminal makers are targeting sit-down restaurants, many of which already accept debit and credit cards.
Several vendors - Ingenico Group, ExaDigm Inc., and VeriFone Holdings Inc. - are conducting tests in which servers bring terminals to the tables. The terminal makers contend that restaurants can improve customer service and enable diners to use PIN debit cards, which could reduce merchants' transaction costs.
PIN debit acceptance is low at sit-down restaurants today. Customers typically give servers a signature debit or credit card to take to a terminal behind the counter.
The vendors say having a terminal at the table also could reduce fraud from skimming, in which crooks swipe a card through a small reader to capture the magnetic stripe information to use later in creating fraudulent cards.
Paying at the table also can reduce the wait time for tables, as a diner who has finished a meal does not have to wait for the server to take the card to a terminal and come back with a slip to be signed, says Rob Regan, vice president of hospitality systems for VeriFone, of San Jose.
But beyond convenience, being able to accept PIN debit may prove the catalyst to drive restaurant adoption. (See story on this page.)
Grant Drummond, the director of marketing communications at Ingenico, of Toronto, said he thinks many restaurants and their customers would welcome the PIN debit option.
"PIN debit is really where it's at," he said. "PIN debit acceptance is an absolute necessity as more and more people use their PIN debit cards."
Enabling customers to conduct PIN debit transactions could save restaurants money, because the interchange rates applied to them are lower than those for signature debit and credit cards. An $80 tab, for example, would cost the restaurant about $1.25 in credit card interchange versus about 60 cents for a PIN debit purchase.
To enable customers to pay at the table in the tests, the server enters the bill's amount into a portable terminal and hands it to the diner, who then swipes a credit, debit, or gift card through the device.
Ingenico is testing its Pay@Table product line at Legal Sea Foods, a Boston restaurant chain. Diners can pay with credit, signature debit, or PIN debit cards, Mr. Drummond said.
VeriFone is testing its TablePay system at Potomac Pizza in Gaithersburg, Md., and at Fatz Cafe, a restaurant chain run by Cafe Enterprises Inc. in Taylors, S.C., Mr. Regan said.
ExaDigm said it is testing a wireless terminal at several restaurants, which it would not name.
Neither Potomac Pizza nor Fatz Cafe accepts PIN debit cards, Mr. Regan said. He noted that their processor, Chase Paymentech Solutions LLC, a joint venture of First Data Corp. and JPMorgan Chase & Co., has yet to certify his company's systems to accept PIN debit transactions.
Stephen Mott, an analyst who follows merchant acceptance, said it is not in processors' best interests to push PIN debit acceptance, because it will mean less revenue.
"It all comes down to money. It would lead to a change in economics," said Mr. Mott, the president and founder of the Stamford, Conn., consulting company BetterBuyDesign. "Big banks are pushing credit card and signature debit card acceptance because there's more interchange. I am not saying that PIN debit won't happen, but banks' and processors' bread and butter are credit and signature cards."
