From Tablet To Table: The Democratization Of Restaurant Payments

mPOS is opening the door for other technology-empowered efficiencies that are changing restaurant operations and, in turn, flattening the world (in a good way).

As we’ve noted in the mPOS tracker before, the mobile point of sale space is rapidly evolving into mobile capability far beyond mobile payments. For instance, one notable industry where mobile is having a profound transformative effect is within restaurants. Mobility in restaurants has the potential to improve everyone’s restaurant experience, from customers to staffers to owners. And it’s not just about paying with a mobile tablet — it’s an experiential and operational overhaul.

One notable player in the restaurant technology landscape is Boston-based Toast, an all-in-one, cloud-based, POS and restaurant management system. Last month, the company made a splash when it announced it had raised $30 million in Series B funding (bringing the firm’s total up to $37 million). In an interview with Toast Co-Founder and President Steve Fredette, he discussed with PYMNTS the evolving restaurant experience, and how technology is catalyzing the evolution.

Adoption, Fredette said, is driven by the ease of use of the mobile tablet system. Older, Web-based POS systems, he said, were “a little bit clunky,” not to mention time-consuming to train staff on. And, in a high-turnover business like the restaurant industry, those hours of training can add up quickly.

“I tend to believe that one of the big things that has allowed software as a service to really disrupt the point of sale market, in particular in restaurants, is app platforms like Android and iOS,” Fredette said. Toast is Android-based, which, Fredette said, allows for flexibility to build for multiple screen sizes.

“We’ve built everything mobile-first,” he said. Older POS systems’ technology was built for systems like Windows,” he said, “where mobile was more of a bolt-on or an afterthought.”

And in an industry where there are lots of interconnected parts, the flexibility and efficiency of mobile is helping to fine-tune operations.

Fredette recalled a story of a server who was wearing a Fitbit before and after Toast was implemented at her restaurant. After the platform was put in place, Fredette said, the number of steps she took during her shifts were cut in half.

“The difference between running back and forth from the table to the terminal, print the check, bring it to the table, go back to the table, get the card, run it back to the terminal, bring the tip receipt back to the table, and then bring the tip receipt back to the terminal – there’s a lot of back-and-forth that happens,” he said, then paused to take a breath. “And when you can take orders and payments at the table, that makes a big difference.”

The difference, Fredette said, is in the speed and accuracy of service for the customer – with better efficiency and bandwidth for servers, as well as a better bottom line for restaurant owners.

And what about service and servers? What does the evolution of mPOS mean for them? Fredette speculated, “The restaurant industry is about service. I don’t really think the service element of that goes away. I think you still want to have someone who knows the menu. I think it becomes more consultative. I think if a restaurant server can spend less time with the technology side of things,” like entering orders and other manual procedures, he said, “and more time talking about the food and talking about the craft of the food, or talking about where it comes from or talking about the ingredients or talking about the drink and, I think, you’re going to see the experience get even better.”

The platform, he said, is designed to make servers more efficient. “So you take payments at the table with our tablets – we’ve shown that can increase the number of tables a server can handle during the busiest times by 15 to 20 percent. So that server is actually making more tips.” And, no surprise, they love that, he said. He added, “And the restaurant loves that too, because the busiest time is when they’ve got the longest line out the door – or longest wait time if it’s a full-service restaurant.”

Fredette said that the fact that the system is intuitive, because it’s developed on top of a consumer platform, goes a long way toward adoption. He also said that some customers have reduced new staff POS training from five days to one. Then there’s the ground traffic control which Fredette’s support staff orchestrates remotely.

“Software as a service has changed the game and has shifted the goal line a little bit, in terms of how much you can do online,” Fredette said.

For example, he said, with their cloud-managed networking equipment, “We can see if a cable’s plugged in or has been unplugged, right from a dashboard online that we can pull up without having to be on-site.”

The intersection of restaurant operations and consumer behavior

Fredette mentioned QSRs such as Domino’s and Panera Bread as examples of large players in the industry that have spent millions of dollars to build digital ordering capabilities. They have invested “so much money,” he said, “because building those systems on top of the legacy architecture that’s existed in the point of sale industry, in the restaurant world, is not an easy thing to do.” It’s an investment in innovation driven by consumer behavior – like social networking via mobile apps. In addition, he said, there’s the demographic change in the industry “that’s driving both consumers of restaurants and restaurants saying, ‘I need to respond. I need to be where my consumers are in the technology world, and my existing system is not good enough. I need to look for something new.’” Or, he added, there are now “owners of restaurants who’re growing up on Facebook and now they’re running restaurants. And their natural inclination is, let’s go look online and figure out what the best system is.”

Toast, Fredette said, isn’t built atop a complicated legacy system – they are building on top of a tablet point of sale that allows them to be nimble and to develop new capabilities quickly. “We love the idea that we’re democratizing some of the technology that the biggest players can spend millions of dollars on and making that available to everybody else,” he said.

Tablet technology drives down cost and makes the technology widely accessible, Fredette said. “If you can get a better system, at a lower cost that meets your customers where they are, whether it’s mobile apps or tablets or kiosks or digital receipts or so on, and then enables your staff to be more efficient and effective and is now cloud-based so you can actually analyze all the data across all of your customers and use that to make your restaurant owners smarter operators, I think you’ve got a winning solution.”

So what’s next in mobile payments (and beyond)? Fredette sees international markets as a big growth opportunity. “Software as a service, the model in general makes the world a little bit more flat,” he said.

Another innovation Fredette expects is truly seamless payments – when “you don’t even have to take your hands out of your pockets,” he said. Except possibly to eat.

So by this account, as the mPOS world turns, it also flattens. And PYMNTS is keeping tabs on it.

To read the full mPOS Tracker, click here.