Security experts have long considered restaurants a happy hunting ground for credit card skimmers and payment-system hackers. So much so, diners have become understandably reluctant to let a waiter take their credit card away from the table when settling their bill.
With its Jan. 5 unveiling of an at-the-table digital payment terminal called the Rail, Viableware now joins other technology companies that have been busy the past couple of years trying to eliminate the standard restaurant bill-paying methods.
Credit card data breaches at restaurants often do not spark major news headlines, though a large breach reported last month involving Subway restaurants illustrates the need to keep card data out of restaurant payment systems (see story).
Viableware’s Rail differs from other devices because it looks like the traditional bill folder and, when opened, displays a digital touchscreen that summarizes the bill and provides payment options, Kirkland, Wash.-based Viableware CEO Joe Snell tells PaymentsSource.
Customers using the Rail have the option of paying by cash or payment card, with the card never leaving the table, Snell says.
In addition, the Rail allows several diners at the table to split the bill tab with the touch of one button, he adds. Or each diner can check the menu items listed on the screen they have to pay for and tally a bill in that manner, Snell says. The Rail includes a calculator for diners to tabulate tips.
Diners may leave the Rail at the table in the same manner as traditional bill folders when they leave, but the device will alert waiters a payment is ready, Bob McBreen, Viableware vice president of product development, tells PaymentsSource.
If the diner pays with cash, a green LED light on the Rail will flash to indicate cash is inside the folder. If the diner pays with a credit card, the LED light will stay a steady green, McBreen explains.
If the diner chooses to pay with a credit card, he would swipe his card in a reader attached to the top of the Rail. The reader encrypts the card data, and the Rail sends the information to the restaurant point-of-sale terminal via a wireless connection to obtain authorization through the restaurant’s card processor and deposit the funds in the restaurant account. In a matter of seconds, the Rail alerts the customer if the transaction has been approved. The diner signs in an area for signatures and touches a button to complete the transaction, McBreen explains.
Neither the merchant nor Viableware stores any card data, though Viableware does create a 24-character algorithm to identify a customer and stores that information on its cloud-based virtual data center if a restaurant wants to establish loyalty programs, McBreen says.
“The merchant does not store any card data, which cuts down on the Payment Card Industry compliance scoping,” he adds, referring to the PCI data-security standards.
Viableware will test the Rail for two months in the Seattle area before expanding sales of the product in March, Snell says. Viableware intends to sell the Rail directly to some restaurant chains, but mostly will use a value-added reseller system in which point-of-sale manufacturers would include the Rail in an overall system sale, Snell adds.
Generally, restaurants will request one Rail for every three tables, Snell says. Restaurants with 60 to 100 tables would pay between $400 to $500 a month for the entire system, which includes installation, support, a secure wireless connection, and a “base station” for communicating with the restaurant point-of-sale system and Viableware data center, Snell adds. Viableware does not charge transaction fees, but restaurants still would face paying their acquirer discount rate for their card transactions.
The Rail displays typeface fonts and paper receipt artwork, plus a location for signatures, making it appear similar to a traditional bill folder, Steve Stoddard, Viableware president, tells PaymentsSource The diner can choose to have the Rail send the receipt via e-mail, he adds.
Considering the vast age difference of restaurant patrons, making the Rail easy to use was an important factor for Viableware, Stoddard notes.
“A couple in their early 60s was at one of our first testing tables, and they just opened it and followed the directions and knew what to do,” Stoddard says.
The Rail accepts magnetic stripe debit and credit cards, and it has a Near Field Communication device so it can accept mobile NFC and contactless chip card payments, Stoddard says.
Viableware continues to develop software applications to accept mobile-wallet payments, but the Rail was “pre-made” to insert readers to accept EMV chip cards when that payment method takes hold in the U.S., he adds
The Rail “sounds like a great innovation and good news for the restaurant industry,” Julie Conroy McNelley, senior analyst and fraud expert with Boston-based Aite Group, tells PaymentsSource.
Restaurants have been the “tried-and-true battleground” for card skimming for years, whether it is just a waiter doing it on his own or as part of a crime ring, McNelley says.
Criminals eventually figure out a way to hack most security devices over time, McNelley contends. But if a waiter tried to tamper with a Rail or process a credit card payment away from the table, restaurant management likely would notice a change in the established payment procedure, McNelley adds.
Restaurants using the Rail would want all transactions processed with the Rail as a way to limit the scope of their PCI-compliance needs, Snell notes. They thus would have limited hardware on site to process payment cards, he says.
Other security measures include automatic shut down if the Rail moves out of wireless communication range. In addition, when Viableware reboots the system, a set of security checks would note unexpected hardware or software changes, Snell adds.
Restaurant patrons are likely to see various other pay-at-the-table devices become part of the dining experience in the future.
Last summer, ATX Innovation Inc. revealed Tabbedout software for smartphones, allowing a consumer to open a tab at a restaurant on his phone and pay through a phone application when leaving the restaurant (see story).
Last spring, VeriFone Systems Inc. continued its development of “pay-at-the-table” technologies at restaurants with its partnership with Micros Systems Inc. to support NFC technology so smartphone users may pay tabs without providing a physical credit card (see story).
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