The smallest merchants, such as food trucks and local restaurants, will be some of the toughest to convert to EMV, but Lavu Inc. sees an opportunity to use Bluetooth instead.

The Albuquerque, N.M.-based mobile payments company has added PayPal to its menu of services, providing its restaurant clients with the option to accept all types of card payments through PayPal's Bluetooth-based Near Field Communication card reader.

The battery-powered device also has a slot for swiping magnetic-stripe cards and dipping chip-equipped EMV cards, but Lavu predicts that these options will take a back seat to mobile payments.

"Our top request is from restaurants asking how they can accept Apple Pay and Samsung Pay, and they say their customers are tapping away on their smartphones all the time, so they want to get in on that," said Ohad Jehassi, Lavu's company's chief revenue officer. "For a certain segment of our industry, I predict diners will be skipping right over using EMV cards and going right to NFC for a lot of their food payments."

One reason is that speed is essential in the food-truck niche, and contactless payments are significantly faster than swiping or dipping cards, Jehassi said.  

Now that the Oct. 1, 2015 EMV liability shift has passed, restaurant clients are more focused on NFC than accepting chip cards, Jehassi said. "However, they view the processing of EMV cards as an advantage, if not a major motivator," he added.

Lavu's clients typically rely on its iPad-based system to run the entire restaurant, including managing employee shifts and time cards, inventory and reports. Employees take customer orders with the tablet, which also supports a plug-in card-swipe module to accept payments.   

Lavu CEO Andy Lim founded the company six years ago after a customer of his website development company asked him to create a mobile payments app for a single sushi restaurant. Lavu's customers now include 4,000 restaurant companies in a few dozen countries. Lavu last year received $15 million from Aldrich Capital Partners in a Series A funding round.

Although Lavu has a strong focus on small and midsize restaurants, some larger chains are among its clients, and some companies that aren't in the restaurant industry have adapted the Lavu app for payments, Jehassi said.

Lavu offers its customers PayPal's hand-held card reader for free through a promotion, or they can buy it separately from PayPal for about $150, according to Jehassi. Lavu's costs vary, based on the restaurant's specific needs and transaction volume, Jehassi said.

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