It has taken nearly two years since the EMV liability shift in the U.S., but restaurants are adapting to new point-of-sale technology that includes EMV and mobile capabilities.
Evidence lies in France-based Ingenico Group's 40% revenue growth over the past year in North America in the restaurant industry.
That type of growth also demonstrates that even though the restaurant industry has been aggressively targeted by startups pitching payment options from mobile apps to digital ordering, traditional point of sale vendors are still very much a part of this market.
In the process, restaurant POS technology has advanced to include business management, payroll and supplies-ordering tools.
"I believe companies like Ingenico and Verifone are best positioned to grow the restaurant pay-at-the-table market because of their experience and installed base outside of the U.S.," said Gil Luria, director of research for equity capital markets at D.A. Davidson & Co.
Ingenico says it has more than 10 million wireless smart terminals deployed globally, making it easier for the company to help U.S. restaurants transition to EMV-enabled pay-at-the-table and loyalty technology. "Although the U.S. market is developing much later than international markets, the need for restaurants to be able to accept chip cards means many of them will eventually migrate to mobile pay-at-the table terminals, where Verifone and Ingenico have an overwhelming share," Luria said.
Two years ago, restaurants found themselves in the middle of the EMV debate, many resisting the change. They argued that their generally low-value transactions wouldn't benefit much from EMV cards, which are designed to block counterfeit fraud at the point of sale — typically of high-value items that are easily resold. As such, restaurants have generally been slower to adopt since the liability shift of October 2015.
But even if restaurants aren't being used to exploit stolen cards, they can still be targets of scammers who want to steal card data. And EMV can play a role in protecting restaurants from that threat, said Howard Finch, vice president of sales for Ingenico Group in North America.
"Businesses are recognizing the need for greater security to protect themselves from a breach, a challenge that continues in the market," Finch said. "They also recognize that U.S. consumers have become much more educated on card security and are welcoming these technological advances that will protect them."
New technology also paves the way for restaurants to accept mobile wallets like Apple Pay and Android Pay.
As much as any other factor, Finch said, metropolitan markets that have restaurants with international clientele attract patrons who "have an expectation that they'll be able to pay at the table and not need to hand their card to the server."
And there's plenty of room for advancement. Even restaurant owners who have deployed mobile apps and loyalty programs are still not using all of the POS tools now available in that sector.
"The challenge or concern that we sometimes hear from our customers is the operational workflow impact," Finch said. "Pay-at-the-table and mobile POS solutions have the opportunity of enhancing the consumer experience but the restaurant needs to be able to make them work with their environment."
Forward-looking restaurants will change their operational flow to gain even greater efficiency with their solutions, Finch added, saying it is similar to how restaurants in airports added digital options for ordering and payments because time is valuable to travelers.
Legacy players are innovating in a consistent manner to keep the restaurant POS offerings of Poynt, Square, Clover and others at bay, but a greenfield remains open for those looking to service newer players in the restaurant business, said Jamie Toplin, a research analyst in the payments practice at BI Intelligence.
"Square, for example, is doing this really effectively with its partnerships with TouchBistro and Vend in the U.S. and U.K. to attract perhaps smaller customers using a dedicated POS system and finding opportunities for synergy as a means of acquiring them as clients and building relationships," Toplin said.
Still, Ingenico and Verifone have such a major share of the restaurant market — at roughly 80% between the two of them — that competitors will find it tough to cut in, at least short-term, Toplin added.
Ingenico says it has shipped more than 110,000 of its wireless smart terminals in the U.S. in the past two and a half years, as well as a wide range of mobile POS options.
The company, through its ePayments unit, also has no intention of being left out of the mobile order-and-pay applications that are increasingly popular with quick-serve and sit-down restaurants.
"POS systems will continue to be important to the restaurant industry because they help run the business," Ingenico's Finch said. "For a majority of consumers, dining is an experience, and personal service will continue to be an important part."