The burgeoning market for pay-at-the-table solutions is drawing interest from many traditional payment industry players tackling restaurants’ problems, but one newcomer is gaining traction in the niche by making the consumer its primary focus.
It’s an approach to marketing a pay-at-the-table solution that Pittsburgh-based Nowait discovered more or less by accident, said Ware Sykes, CEO, whose company’s core product is an app that replaces low-tech methods of handling customer wait-lists during peak hours.
Sykes requires all of Nowait’s employees to log time working at no less than two restaurants learning the nuances of managing restless crowds of customers at casual-dining establishments that don’t take reservations.
“Everyone learns what it’s like to walk among the chaos at restaurants, which shows us the operational complexity of these places and exactly what customers and employees need from our apps,” Sykes said.
The immersive development process ignited strong momentum for Nowait, which has soared in the last three years from 200 restaurants using its wait-list app to more than 4,000. Restaurants say the app, which costs $60-$200 a month based on volume, measurably increases sales volume by streamlining the seating process and eliminating bottlenecks.
Now Nowait is applying the lessons it’s learned to a
“Whereas many payments companies are looking to bring their solution into the restaurant environment, we’re coming at it from the other direction, looking at what the people need from payments,” Sykes said.
There is no shortage of interest from payments industry players in the $200 million-plus U.S. pay-at-the-table niche, as restaurants gear up for accepting mobile and chip-card payments, said Rick Oglesby, research director with Double Diamond Group.
Nowait is establishing partnerships with traditional payments industry providers to work together on introducing next-generation pay-at-the-table services that suit the new EMV environment--a
Restaurants report positive results from initial tests, Sykes said.
“Restaurants realize they need help, because they’re dealing with the gradual shift to mobile and the recent migration to EMV,” he said.
What sets Nowait’s approach apart is that it’s building on something customers have already embraced—its waitlist app—and adding payments on to that experience seems easier than forcing an unfamiliar new method into the mix, Sykes said.
“Our product began by adapting existing processes, from a pen-and-paper waiting list or those ridiculously costly hand-held buzzers, into the Nowait app using consumers’ smartphones,” Sykes explained. “Now we’re adding on the ability to pay, which seems to be a natural evolution that works because we’re following what customers tell us they want.”
Customers at participating restaurants who have downloaded Nowait’s app have the option to link a credit or debit card to their profile and receive their check via the app. The app also enables customers to leave a tip for their server and get an emailed receipt. Sykes said the process typically is faster and more convenient for both the customer and the server, compared with traditional methods of taking the check away to process at a cash register.
Restaurants so far welcome the fact that Nowait doesn’t require re-engineering existing payment processing systems or investing in new hardware. “We’re using the very thing customers carry with them everywhere, and in fact keep staring at most of the time they’re in the restaurant—their phones,” he said.
Nowait has not yet determined costs for its pay-at-the-table solution and it’s still working out some technical details, Sykes said. “We may use a subscription approach, or bundle services.”
And paying at the table isn’t the only service Nowait envisions for its app.
“Down the road we see the opportunity to add on other services, from customer relationship management loyalty to dynamic promotions, adding things on as they evolve,” Sykes said.
Analysts say Nowait’s approach to offering value beyond merely payments shows some promise. “Nowait’s approach works within existing customer behavior to reduce friction and creates value, where many other services require customers to simply change their behavior, which adds friction,” Oglesby said.
Nowait’s solution could help restaurants ease the transition to accepting EMV cards, which require customers to dip debit cards directly into a payment terminal for authorization, Oglesby said. New EMV-equipped mobile payment terminals can cost $300 to $500 each, he said.
But Nowait isn’t likely to replace the need for mobile payment terminals, Oglesby pointed out. “Many consumers will still wish to pay in the traditional way, so I wouldn’t see app-based approaches like Nowait’s actually displacing payment terminals; rather a restaurant will need to adopt hardware-based pay-at-table solutions in addition to mobile payment solutions,” he said.
