Heartland Payment Systems and Tabbedout are developing an integrated mobile payment system for restaurants and bars.

The companies plan to enhance Tabbedout's mobile payment app by adding alternative payment acceptance, tokenization for security, promotions, reservation and waitlist management, e-commerce and business management tools.

"It solves a real problem for the merchant, which is allowing people to manage and close out their tabs on their own schedules rather than the wait staff's schedule," says Bob Baldwin, a vice chairman at Heartland.

For Tabbedout, the partnership is a chance to add scale in an increasingly crowded market. Its rivals for restaurant payments include Snapfinger, MyCheck, Viableware and TouchBistro. Companies like Square, PayPal and Intuit also include restaurants as potential customers for their mobile card readers — PayPal's flagship customer in the U.K. for its PayPal Here reader is a seller of goat's milk ice cream.

Tabbedout currently has relationships with about 5,000 merchants, and will potentially have access to a much broader base of restaurants and bars through Heartland, which is an endorsed payments provider for the National Restaurant Association and 46 state restaurant associations. Heartland also has a sales force of more than 800.

"This partnership really about growing the merchant network for us," says Alex Broeker, Tabbedout's CEO. 

Heartland and Tabbedout also plan to add dining reviews and venue discovery to Tabbedout's product. "There is another element to the system [beyond payments], in customer engagement," Baldwin says.

The system will aggregate customer data—including profile information, purchase history and feedback to allow businesses to offer targeted rewards and incentives.

"We can drive consumers to Heartland merchants through our partnerships," Broeker, says citing Tabbedout's partnership with Google Wallet as an example. "The Google Wallet sends out an email to users to get a special offer at a Heartland merchant."

The combined Heartland-Tabbedout product will be rolled out this fall in several cities, including Austin, Dallas, Houston, New York and New Orleans.

Tabbedout offers a software development kit that allows restaurant chains and developers to integrate Tabbedout's payments technology into their branded mobile apps. Tabbedout will also soon be available through the LeafAppstore for use on LeafPresenter, a tablet designed for payments. Heartland recently made an investment in Leaf.

Tabbedout's partnership with Heartland should be able to leverage Leaf's technology to add further merchant services, Broeker says.

"We're able to integrate with a number of different point of sale systems," Broeker says.

Heartland also recently expanded its partnership with the mobile-payments provider LevelUp, as the processor bulks up on technology to compete with alternative payment providers and accommodate the growth of mobile payments.

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