August 19, 2014
OpenTable is a leading restaurant-search and table-booking company in the US. It piloted its payment app, which integrates table booking and bill payment, in San Francisco. The company recently announced that it is expanding its mobile payment services to restaurants in New York, and it plans to target 20 other cities by the end of this year.
OpenTable finds some competition among companies ranging from smaller startups to payment giants, like PayPal ,that are making an effort to bring mobile payments to restaurants. The services offered by OpenTable and others include scenarios such as payments being accepted via an app installed on consumers’ smartphones. In another scenario, tablets could be offered at tables for ordering and making payments.
OpenTable has made a series of acquisitions to integrate all consumer-experience steps on a single platform. OpenTable bought Ness Technology, Foodspotting and Guestbridge to strengthen its restaurant-search and -recommendation service. It acquired Quickcue to strengthen its reservation feature, by adding a waitlist capability, and it bought Justchalo to develop the payment function on its mobile app. OpenTable strengthened its payment-loyalty program by acquiring Treat Technologies (which developed a gift-card app).
Larger chains, such as Starbucks and McDonald’s, are testing order-ahead technology with the option of bill payment in advance. To curb the challenge from competitors, OpenTable is leveraging the fact that its app has a significant user base. OpenTable helps seat over 15 million diners per month. In 2013, 36% of OpenTable reservations were made using mobile devices. According to Google Play data, the OpenTable app is installed on millions of smartphones running Android.
Here is an illustration showing OpenTable interface on a tablet:
Diners can make mobile payments through OpenTable’s iPhone app, which also offers features such as a detailed view of the bill, adjustable tips, e-mailed receipts and use of payment cards not supported by the restaurant. Diners simply have to link their credit- or debit-card details to their OpenTable account and don’t have to do check-ins or scan bar codes.
Restaurants don’t require any form of hardware to take advantage of OpenTable’s mobile payment service. After a limited trial with 18 restaurants in San Francisco, OpenTable will enable mobile payments at dozens of restaurants in New York. With 30,000 restaurants on board as part of its database, OpenTable is looking at a bigger value-added play in the near future.
At Let’s Talk Payments, we have written about how consumer experience in the restaurant industry has undergone a dramatic change in the past decade. Technology advancement at each consumer step is revolutionizing the overall consumer experience. The technology changes we have seen in the past decade have not only helped large chains and fine-dining restaurants but also smaller restaurants. The cloud, payment technology, analytics and mobility are bringing fundamental changes through technology-driven disruptions.