Verifone Inc. has introduced a portable point of sale terminal that will enable restaurant customers to pay for meals with credit or debit cards without having to hand over their plastic to a waiter or cashier.

Verifone, which is by far the largest supplier of POS terminals to U.S. merchants, said it developed the product to reduce fraud and streamline tip reconciliation.

"The new terminal, known as Folio, resembles a check presentation folder used at many restaurants. A waiter will bring Folio and the bill to a table. Then the customer swipes the card and enters the' amount of the bill and the tip.

Removing Folio from the table, the waiter then connects the portable unit to the restaurant's main point of sale system for transaction authorization and settlement. Upon authorization, the customer is presented with a receipt for signature.

"[The product] addresses consumer concerns about what might be happening to a card when it leaves the table with a waiter or waitress," said Michael J. Shade, director of marketing and planning at Verifone.

In addition to helping satisfy customers, the Redwood City, Calif.-based company said the terminals can streamline the process of tip reconciliation that accompanies credit card payments at most restaurants.

Typically, restaurants using regular point of sale terminals have to guess the tip amount before authorizing a credit card transaction for a customer.

When the receipt is returned to the customer for signature, the actual amount of the tip often does not match the amount authorized. The difference must be balanced at the end of the waiter's shift.

Folio makes such reconciliation unnecessary, because it lets the customer put down the tip before authorization. The terminal features a keypad that helps customers compute tips.

"From a restatlrant's perspective, the terminals can change the whole paradigm of tip reconciliation," said Mr. Shade.

New Opening for Debit Cards?

An incidental benefit of Folio is that it may also help bring more debit transactions to restaurants, Mr. Shade said.

Because debit transaction authorizations require customers' personal-identification numbers, restaurant acceptance of debit cards has been impractical in the past.

But since Folio and some competing portable products from other terminal vendors feature keypads, some restaurants may soon begin accepting debit cards, thereby taking advantage of the fact that debit transaction costs are far lower than credit transaction charges.

Officials at SPS Transaction Services Inc., the Riverwoods, Ill.-based company that tested Folio, said the terminal is comparable in quality to other Verifone terminals.

They also indicated that the terminal "is a little light on transaction storage, but it will go through some changes over time."

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