Security plays a role in restaurants' shift to mobile, cloud tech

The shift in payments at hospitality businesses such as restaurants is hard enough, but it's made even more challenging by the pace and breadth of the changes, according to Cayan's Ken Paull.

This, in turn, is putting added pressure on the companies that serve as vendors to the restaurant industry, including payments providers.

"The industry has struggled to adapt to EMV and NFC," said Paull, the chief revenue officer of Cayan, adding that restaurants can see more changes on the horizon based on what other retail categories have done with mobile ordering and payments.

Photographer:Sergey A.Khakimulli/Sergey Nivens - Fotolia

"The technology has to lend itself to what's in the market today, but also for the technology that isn't in the market yet," Paull said. "Nobody knows about that."

Cayan has spent the past couple of years building out its Genius platform and other acquiring technology for the hospitality industry to accommodate contactless mobile payments, but also add cloud technology to enable further changes.

Cayan's new collaboration with hospitality software seller Aldelo widens the play by adding potential users for Cayan and more technology for Aldelo. Aldelo has more than 120,000 installations globally and has a network of 400 dealers, all of whom will be exposed to Genius as a payment option.

Paull hopes this large network of restaurants will be attracted to one-swipe bar tabs, four-second EMV transaction times and other features such as customized tips, on-screen signatures, omnichannel gift cards and added security including encryption and tokenization.

There are a couple of trends that could fuel adoption, Cayan argues. One is the ongoing occurrences of data breaches at all businesses, which has impacted restaurants such as Chipotle and thus increases the demand for security.

Second is the wave of mobile apps that don't perform payments but are still tied to the point of sale, such as "order ahead" apps. It's a relatively new feature for restaurants, but has gained traction at companies such as Starbucks, suggesting it will spread to other restaurants in the future.

The pressure on merchant acquirers to diversity will lead to similar collaborations, according to Raymond Pucci, an associate director at Mercator Advisory Group, who likened Cayan's collaboration with Aldelo to First Data's recent partnership with ShopKeep. In that partnership, ShopKeep incorporates First Data's Clover software development kit and hardware portfolio for EMV, NFC and mag stripe transactions. First Data makes ShopKeep's point of sale software available to the processor's distribution network of banks, merchants and ISOs.

"With Cayan and Aldelo you get a vertical market specialization," Pucci said.

Cayan, which rebranded from Merchant Warehouse in 2015 to reflect its move beyond being a traditional ISO to a provider of digital technology, has also partnered with Demandware to remove integration steps to add mobile technology to in-store payments. In that collaboration, Genius connects with Demandware's Commerce Cloud and its LINK Partner ecosystem, placing Genius' hosted payment technology alongside Demandware's cloud-based EMV payments system.

"We can add in new options every quarter," Paull said, adding Cayan recently has added a handheld WiFi option for pay-at-the-table apps.

Software vendors and merchants alike are hesitant to possess sensitive consumer and card data, so a semi-integrated solution such as Genius provides them with the ability to push that data out to third party payment processing companies, said Rick Oglesby, president of AZ Payments Group.

"Also, the cloud-based nature of the platform allows for relatively easy integration with other services, such as online ordering with in-store pick-up," Oglesby said. "There's lots of competitive pressure to serve the industry, but outsourcing the payments component has been common for more than a decade and it's only becoming moreso due to security risks."