Seven years ago, Shift4 made the bold move of launching a free point of sale platform called Harbortouch for small restaurants and chains in hopes of landing payment processing contracts as the key part of the deal.
It worked well enough to place terminals and handle processing at about 25,000 sites in the following years, but the company, now called Shift4 Payments after being acquired by Lighthouse Network, realizes it has to bring more services to the restaurant table.
The company has tested Harbortouch Bar & Restaurant software at 50 locations and has informed independent sales organizations the service is ready to deploy for restaurant clients.
HBR gets Shift4 Payments back into a restaurant POS game that increasingly calls for integration of offerings like order-and-pay-ahead capability, online reservations, access to respond to social media reviews, and specific restaurant management tools.
"We saw the needs of the average merchant changing, as the low price point and accessibility of a full-featured system isn't enough anymore," said Brendan Lauber, chief technology officer at Shift4 Payments. "For the small restaurants to compete against bigger chains, they need a lot of these third-party integrations. They need GrubHub, gift or loyalty capabilities, and they need ways to drive business through data."
Shift4 is doing all of that now through native apps on a cloud-based HBR platform that can operate in an internet environment.
"We are able to quickly plug in all of these third-party apps, some of which we are building ourselves," Lauber added. "We're doing that instead of using a lot of APIs and a marketplace partnership type of concept."
Shift4Payments has no choice but to up its Harbortouch offerings, mainly because the restaurant POS industry is quickly changing.
Barclaycard is testing a "Dine & Dash" app in the U.K. in which the restaurant patron can pay via an app and bypass the POS experience or handing over a plastic card at the table altogether.
Square introduced Square for Restaurants three months ago, a process by which the restaurant owner can obtain front- and back-end operations through a single channel and remotely manage ordering and payments.
At the company's earnings call last week, CEO Jack Dorsey said Square for Restaurants has helped expose restaurant owners to other Square services and business management tools, all the while keeping other competitors at bay.
First Data's Clover POS continues to advance in the vertical, starting as a convenient table top terminal and most recently partnering with Panera and Google to bring loyalty programs into the mix through mobile payments.
Much of the change has been driven by the EMV chip card migration launched in 2015, the first major fundamental change at the POS in the U.S. in decades. It left restaurant owners in need of a change, and possibly new equipment, because they had to participate in that conversion to avoid fraud liability.
In the meantime, mobile became a way to potentially bypass chip or, at the very least, more easily incorporate it and contactless technology at the same time.
Because Lighthouse Network acquired Shift4 and rebranded it as Shift4 Payments earlier this year, the company was able to quickly acquire three more companies — Future POS, Restaurant Manager and POSitouch — within a month.
It all represents the opportunity for Shift4 Payments to address savvy competition and savvy merchants who are "surely getting the sand out of their eyes on what they need to do for these order-ahead and delivery programs," Lauber said.
While Harbortouch may be a little late to the game of providing integrated POS services for restaurants, the company holds a strong client database "that is a defensive move and hopefully can make it up on volume later on with the added services," said Richard Crone, chief executive of the payments consulting firm Crone Consulting LLC in San Carlos, Calif.
Shift4 Payments says it has placed POS terminals and platforms in as many as 1000,000 locations, when combining those from the company acquisitions.
More than anything else, Crone agrees Harbortouch has to move forward with order-and-pay- ahead mobile capabilities because it is one of the most important factors that restaurant owners are now seeking.
"The best-in-class restaurants that have integrated their processes with order-ahead, such as Panera, Starbucks and Dunkin' Donuts, are generating as much as a third of their business outside of traditional POS systems," Crone said. "The order-ahead functionality at the POS is driving a lot of decisions on what platform to purchase."
Shift4 Payments plans to have the Harbortouch name in that mix.
"We are a payments company, so that is our focal point for our customers' business," said Michael Russo, chief development officer at Shift4 Payments. "HBR will have an online ordering component in this and the needed integrations with GrubHub and others, because that is where you get repeat local customers."
HBR operates on an Android platform, and while it would work on most any tablet, the company provides one specifically designed to operate the platform and its services.
When the company's Lighthouse portal soon upgrades to a 5.0 version, it will allow restaurant owners to engage with customers on social media channels and respond to restaurant reviews, and it will include a new POS Marketplace where third-party apps can be integrated for more tools related to loyalty programs, payroll, accounting and other tasks.
"We are in a new, modern and continuous deployment model with these products," Russo added.
Shift4, of Allentown, Pa., says it has processed in excess of $60 billion annually and with Lighthouse Network and new acquisitions that number is estimated in excess of $100 billion a year.