After a smooth beta test, the CEO of Viableware’s Rail system is confident the tableside payment platform will be in almost 700 restaurants by the end of 2012.

A second beta test is set to begin in a much larger location than the first, a one-floor space near the campus of the University of Washington, Joe Snell tells PaymentsSource. The initial test began in December and produced a few minor tweaks and pleasant surprises (see story).Dinerware Inc. is the point-of-sale vendor at both locations.

The company is set on what to charge merchants–all the equipment, plus installation, a maintenance plan and the service charge is included in a $400 monthly charge for a 75-seat restaurant–who want to offer Viableware on their point-of-sale systems, says Snell.

Several national restaurant chains are set to pilot Rail once the second test is finished sometime this spring, he says.

Viableware consists of a device that looks like the traditional billfold diners get from their servers, but it contains a card reader and touchscreen with a stylus. The Standard Rail device can split the bill up to nine ways or offers diners the option to separate the bill item by item on the touchscreen. Also standard is a tip calculator and three receipt choices: email, receipt printed through the point-of-sale system or no receipt. Card information is encrypted immediately.

Near Field Communication capability is built into each Rail as well, so the device will be able to work with contactless cards and digital wallets.

Also included with the system is a base station that doubles as the system’s server and device charger. The devices interact wirelessly with the base station, which interfaces with the restaurant’s point of sale system.

Ron Dicklin, project manager at Synapse Product Development, tells PaymentsSource the system is a closed-loop one for security reasons.

One of the chains that will pilot Rail will not offer non-Rail payment methods to its customers because of the security benefits of Rail; the immediate encryption satisfies Payment Card Industry data-security standards for nonstorage of card information, Snell says.

Extra equipment fees apply. Variables include the number of devices–more for high-volume and high table turnover concepts, less for white-linen restaurants–and extra base stations for charging the devices. The company’s calculation for devices needed is one for every three tables, he says.

Applications are “the business we’re in,” says Snell, and the company is still working on what to charge for them and how to offer them to restaurants–itemized or as a suite. Examples of apps include one that asks the diner for feedback; complaints trigger an alert to the manager, who can immediately address the concern. Also, diners could use an app that alerts the valet parking crew to retrieve a car before the diner leaves the table, or an app that helps diners call a cab.

Viableware can customize apps for restaurants, and all apps would be approximately the same price and launched remotely, Snell says. Loyalty apps would cost more.

“We really view the Rail as a payment platform but not a payment method by any means,” Snell says. “Any way they want to give the restaurant money we want to facilitate that.”

The beta was surprisingly smooth, with little customer difficulty and only one server complaint, Dicklin says. Servers noticed their tips were decreasing because the tip options offered on the Rail screen went from lowest down to highest–15%, 18%, 20%, he says. This was turned upside down, and Snell says tips not only returned to normal but also increased.

To gauge user-friendliness, there were observers in the restaurant and exit interviews of customers, and both were cross-referenced when the same customer was observed and interviewed. Minor changes were made for users who are so familiar with digital devices that they are not used to reading instructions, Snell says.

Research will continue in the second location, a three-level establishment that will test how the system handles increased volume as well as wireless reach and battery life in the devices, he says.

With a change in software, the devices could be used to send orders rather than take payments, Dicklin says.

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