PayPal and the mobile technology provider QikServe are working to enable U.K. hospitality businesses to accept orders and payments through the PayPal smartphone app.
PayPal's 19 million users in the U.K. positions it well to grab a share of the emerging mobile payments market for restaurants, says Imogen Howat, a social media manager at PayPal UK.
"We have a customer base that we can tap into; people who have had our app for quite some time," Howat says.
Merchants will be able to integrate QikServe's mobile ordering system into PayPal's payment app. That allows the restaurants to offer consumers the option to order and pay for food at the same time. The consumer app can also connect to the restaurant's app.
Merchants can set up a QikServe and PayPal account and begin taking orders and payments in about an hour, Howat says. Early adopters of the integrated service include Armstrong's Deli, a fast food outlet in Edinburgh, football stadiums across the U.K. and bars and pubs in London and elsewhere.
The companies are targeting quick-serve restaurants and also hope to reach smaller, local restaurants.
"A number of smaller restaurants in the U.K. already have PayPal accounts, so it's an easy addition for them," says Ronnie Forbes, CEO of QikServe. "It's a one-click checkout that's designed to be as smooth as possible."
The integrated service also allows consumers to search for nearby restaurants that accept QikServe and PayPal. "Once you spot the restaurant, you can drill down and make your order and pay," Forbes says.
The QikServe/PayPal integrated app is available in the U.S. and other markets outside the U.K., Forbes says. PayPal upgraded its ability handle orders as part of a recent redesign of its mobile app.
The collaboration may face some challenges in the U.K. because of the penetration of bank-issued debit cards in that country, says Gareth Lodge, a senior analyst at Celent.
"No alternative payment method has really gained any traction in the U.K., I think that's in part because 90% of the population is banked, and a debit card is automatically issued as part of the account," Lodge says.
U.K. consumers tend to use PayPal to send a card-based payment to merchants that accept no other payment methods online, Lodge says. "It's not unusual for people to buy things under $1 with a debit card. Not the norm, but equally not unheard of."
PayPal is also positioning the integrated app as a "line-buster," or a way to enable people to use their mobile device instead of waiting in line at a store.
Despite this ordering process, consumers would still have to be served their food or beverages by staff, Lodge says.
"The issue is the queuing, not necessarily the speed of the transaction," he says. "Presumably, after [ordering and] making your payment, you have to queue or wait."