Skip to main content

The Rise of Mobile Payments

Restaurants in the U.S. are upgrading terminals to accommodate EMV payments due to the liability shift, but mobile payment technology continues to gain traction simultaneously. According to Hospitality Technology’s 2016 POS Software Trends report, enabling new payment options (e-wallets) continues to be a top business driver influencing POS upgrades (50%) and mobile wallet is the top functionality named for restaurants’ next upgrades (58%). As operators upgrade systems to accept EMV, many are purchasing hardware that will also accommodate NFC payments for mobile.

“As EMV proliferates, consumers will start taking a closer look at mobile payments like Apple Pay and Android Pay because of the horrible user experience EMV creates,” Jonathan Stark, a mobile consultant predicts. “As more people use it, they will be disappointed by it and may find it easier to pay with a mobile phone.”

With EMV payments being more difficult and taking longer to process, experts predict that mobile will become the preferred payment choice in the future. “Mobile payment and EMV will take off concurrently because the rollout is enabling operators to accept mobile payments at the same terminal,” says Todd Kaufman, vice president of information technology at SSP America (, based in Lansdowne, Va., and operating restaurants, bars, cafÉs, food courts, lounges and convenience stores in 29 countries around the world. “EMV slows things down and makes the transaction harder. A few years ago it was difficult to make the case for mobile payments, but now there is a benefit because it’s faster.”

Speed and security
At CKE Restaurant Holdings Inc., ( based in Carpinteria, Calif., operating more than 3,300 restaurants in 42 states and 28 countries, including Carl’s Jr. ( and Hardee’s, ( the company tested EMV transactions, where the process includes inserting a card and rewriting security tokens. They saw transactions taking anywhere from five to 12 seconds, according to Tom Lindblom, senior vice president of technology and CTO at the company. That length of time is not ideal, especially at a drive-thru window, he says. In contrast, mobile payments, like Apple Pay and Google Wallet are very quick transactions.

“NFC mobile gives you the security of an EMV transaction, but at a much faster speed,” he explains. “With EMV, when you insert the card, they are rewriting the security transaction of the card so it takes time to process. They are not doing that with NFC. If we are talking about a drive-thru, that equates to more cars per hour and faster customer service times.”

Outside of the basic PCI security requirements, the other benefit of mobile payments such as Apple and Android is that transactions happen on the mobile end rather than with the operator, which is why security is less of an issue, Kaufman explains. “Apple Pay and Android Pay are actually more secure than swiping a credit card,” Lindblom notes.

Securing online ordering with mobile payment
According to Stark, there are two possibilities when it comes to adding mobile payment to an online ordering strategy — browser-based, similar to online ordering on a desktop, or inside of a native app, where the app developer can build in the ability to access Apple Pay on the device.

“The in-app purchase using Apple Pay or Android Pay is drastically improved so it’s a huge win for operators because you don’t have to ask the person to enter their credit card or type in a billing address again,” he says.

SSP America accepts online ordering and mobile payments for two of its locations at JFK Airport in New York via a mobile website where customers can register their cards for a secure transaction. The company uses Eigen ( as its payment gateway to secure the credit card and encrypt it, says Kaufman. “The credit card is not in our system or stored at all,” he notes. “We get a transaction key and the payment happens through that key.”

CKE Restaurants are getting ready to start a pilot for online ordering using Cayan Merchant Services ( in conjunction with Onosys ( All payments will be processed on the front end so there will be no cardholder data sent to individual restaurant locations, Lindblom explains.

“We have Elavon and Verifone removing credit card data from the restaurant network, so we didn’t want it reintroduced through online ordering. It’s a different payment gateway, but the same premise,” he notes.

Choosing tech to enable customers’ preferences
While some operators are still upgrading hardware and software to accept mobile payments, others have had the technology in place for awhile in order to be prepared for the evolution of customers’ preferences.

“We expect the major guys to be the ones who gain traction in the space,” Lindblom says. “Consumers won’t use 20 different payment options, so the ones we believe are gaining traction will be the ones we support. For us it’s customer-driven and we want to support the methods our customers want to use.”

CKE Restaurant Holdings Inc.  has been using IPP 350 pin pads from Ingenico ( for a number of years. With both EMV and NFC capabilities, CKE Restaurants is now enabling the pads’ functionality to accept Apple Pay and Android Pay using the Elavon ( payment gateway. “We are also working with Verifone ( and will support that for our franchisees as well,” Lindblom says. “Franchisees can choose either solution to support both EMV and NFC and have end-to-end encryption.”
SSP America is using various versions of Verifone Pin Pads to accept mobile and EMV payments, but are also testing MyCheck (, which creates custom apps for restaurants in the mobile space. Using a customer FlyZone app, customers just need to download the app, show the pin to the server and the check goes to their phone so they can use ApplePay, Paypal or an existing credit card to pay the bill right from the mobile phone, Kaufman says.

“We worked with MyCheck to add new features so customers could reorder from their phone as well, and it integrates with our POS directly,” he explains. “The response from customers has been positive in the three restaurants we are testing in San Diego.”

Samsung Pay is another major player to enter the market, offering a proprietary technology to allow mobile payments at any magstripe reader.  Operators do not have to upgrade technology in order to accept the payment, but so far it’s only available on the newer Samsung phones, according to Stark.

In the next 12 to 18 months, experts predict the big companies will battle for placement in the mobile payment space, and those that gain consumer adoption will be accepted by operators.

“I expect Apple and Android will be significant competitors in the space, and I think the jury is still out on the rest,” Lindblom says. “There are so many payment guys out there, they won’t all survive — much like the world of physical credit cards. There will be a handful of companies that will do it well.”   
This ad will auto-close in 10 seconds