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Prep for Mobile Payments with 10 Self-Help Questions

Mobile wallets. NFC. PCI. EMV. Payment is changing rapidly, but it’s abundantly unclear which technologies will take hold. That makes it tough for hospitality organizations to keep up with compliance requirements and consumer expectations while ensuring they’re ready for whatever technology becomes standard.

Add to that the fact that payment is no longer just payment. Many experts say the real value in mobile payment platforms lies in marketing: the ability to make it easy to interact with, collect data from and promote to customers in a real-time, highly personalized way as part of the transaction.

That means the IT and finance folks seeking to build a roadmap for payment must invite marketing to the table, with the goal of building a comprehensive, integrated approach that solves each groups’ goals.
Mobile payment takes multiple forms. First is mobile acceptance: the ability to take a payment via a mobile device, such as inserting a Square reader into a smart phone or doing pay-at-the-table via a company-owned mobile device. Second is consumer-based mobile payment using the customer’s smart phone, communicating with the hospitality organization’s fixed or mobile POS. Within each are multiple choices using a range of business models, different ways for devices to interact (both one-way and two-way communication) and different levels of integration with the payment infrastructure already in place in a hospitality organization.

Creating a roadmap means asking critical questions about the organization’s goals, then using those to investigate potential mobile payment partners.

1) What do we want to accomplish, short-term and long-term? What’s the opportunity?
Don’t let urgency and vendor incentives push you into the wrong decision. Make sure a solution meets your goals, not the vendor’s.  By the same token, don’t be afraid to try something and then change course.

As a high-volume restaurant and catering services company in a major Boston office building, Blue Glass CafÉ ( wanted to boost the frequency of loyal guests while also attracting new customers with a mobile payment solution. While corporate locations of its parent company, Guckenheimer, are trying other solutions, Blue Glass CafÉ chose LevelUp (, a mobile payment platform that offers an array of marketing tools and branded or white label mobile payment.

A one-day vendor-sponsored free lunch incentive brought in lots of new customers, says Sean McCaffrey, resident area manager for Blue Glass CafÉ, but the biggest benefit has been in retention. “I can’t think of a better way to get people coming back other than food,” he says, but “I would love to see the acquisition piece improve.”

2) What do we want to do about our current payment infrastructure?
Is it okay for the mobile payment solution to operate separately or do we want it integrated? Are there current payment relationships we must contractually retain?

LevelUp, for example, touts its ability to integrate with an organization’s current POS and payment relationships and hardware. Others seek to replace it with something better and cheaper, and still others are hybrids of the two approaches. Network Merchant Inc.’s ( iProcess is marketed through value-added resellers or independent sales organizations, ensuring compatibility with the current processor.

3) How does the solution integrate with our current payment, accounting and marketing systems? Is it open? Are there SDKs or APIs? Is it pre-integrated with my POS or marketing platform?

There is no standard way for payment systems, POS and marketing systems to communicate, so it’s important to understand how integration is executed and how deep it goes. Find out if the integration is certified by your POS developer.

For Snow & Company (, pre-integration with its Micros ( POS system was a key factor in choosing Tabbedout’s ( hospitality-specific mobile payment solutions, to augment its own hand-held pay-at-the-table devices. With its location at the center of the theater and business district in Kansas City, MO, the “frozen cocktail experience” restaurant wanted customers to control when they check out. Other mobile payment solutions were a hassle to link to the POS, but Tabbedout tickets are tied right into the POS, explains Jerry Nevins, head of strategy and customer happiness. “It must be a seamless experience.” The endorsement was also a comfort when it comes to PCI. “Micros is very conservative with PCI, so the fact that it made it through their vetting process was great.”

4) Do we want our own branded mobile payment solution, or will it help us to be associated with their brand?
Paydiant (, a cloud-based, white label mobile wallet and payment solution, says larger organizations tend to want to capture guests’ attention and manage their experiences by incorporating customized mobile payment into their own app rather than the payment brand.

For some small and mid-sized operators, marketing their association with an up-and-coming mobile payment brand lends a cool factor and helps them attract new customers.

5) Does the proposed vendor’s business model make sense for our business and guests? Will it impact our fees/exchange rate? What value-add do they offer?
Tabbedout, for example, is set up for restaurants where guests open a tab, rather than the tap-and-pay model of an ISIS ( or MCX ( Value-adds also vary, from marketing programs to reporting and analytics tools. Are these tools all-in-one or Á la carte?

For Stardust Club (, a South Austin, Texas bar, an iPad-based solution from SalesVu ( that incorporates POS and payment right into one low-cost, iOS-based application made more sense than a traditional POS with a separate mobile payment solution. Tech-savvy bartenders can use their own iPhones and the free app to take payment on busy weekend nights, and since only the authorization code gets transferred, PCI fears are reduced, says Andrea Heimann, who handles IT for the establishment.

Several mobile payment companies offer processing fees lower than those many operators are currently paying, asserting that they’ll make money on marketing programs — either the program itself or the results of those programs. Some also make their apps free. Blue Glass CafÉ says it’s saved more than $7,000 over a one-year period due to Level Up’s flat 2% processing charge.

6) Is it okay if the mobile payment solution includes new hardware?
Who pays for it, how much, and is it field upgradable for future payment paradigms?
To promote acceptance of their mobile payment systems, with their phone-to-payment device interface of choice, some operators are offering free or subsidized hardware. Still others tout their cloud-based, hardware-free mobile payment solutions.

Those are great for today’s payment, but operators should tread carefully when it comes to future functionality. While some operators are looking to get ahead of anticipated requirements for NFC and EMV by upgrading payment terminals now, others are waiting for more definitive direction to avoid making the wrong choice. Field upgradability is a must.

Enterprise payment vendor VeriFone ( recommends operators have a terminal maintenance solution in place before selecting hardware, for functions such as tracking encryption keys, performing remote diagnosis, maintenance and repair, and tracking PCI compliance.

7) Does it help us get out of scope with PCI? Some regard mobile payment as more secure than traditional solutions due to their use of tokenization and encryption in place of actual card numbers. If the card is captured only once, at enrollment, the card data is not a part of each purchase. Ask lots of questions about how solutions handle transactions, and exceptions.

8) Which of a proposed payment solution’s capabilities are operating right now, versus on the vendor’s “To-Do” List?
Ensure the vendor can meet your short-term needs for mobile payment while also having the technical capabilities — and financial wherewithal — to develop enhancements and stay in step with payment trends. Does their platform facilitate rapid development? How easily could you change providers? Look at current adoption rates and talk to references similar to you.

9) Does the solution accommodate all customers and devices, or just some?
Find out if the solution will work with all phones, carriers, payment types, processors and POS systems. What does it do about customers without smart phones?

10) What is the vendor’s roadmap to accommodate future payment paradigms?
VeriFone recommends hospitality operators ensure all of these are accounted for: Compatibility with ISO 14.441 and 18.092; the ability to accommodate multiple wallets on one phone; the ability to include a PIN, which will likely be needed for some EMV; and the ability to present and accept bar codes.
Keep in mind that payment platforms are converging, urges NMI — the same solution will likely be extended across stores, ecommerce and mobile. Mobile payment is a step into that world.

Vendors Urge Hospitality Operators To Do These Three Things With Regard To Mobile Payment:

• One, know your own goals.
• Two, consider your payment and marketing needs together.
• Three, get started.

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