PayPal enters POS payment sphere with TouchBistro

August 29, 2013  |  Chris Powell  |  Comments

Online payment company PayPal Canada is making its first foray into point-of-sale transactions, partnering with restaurant technology provider TouchBistro on a cloud-based mobile payment service at select cafés and restaurants in Toronto.

The partnership enables consumers to use their smartphone to check-in at a merchant and pay for their order using a PayPal account. Jimmy’s Coffee, a small independent in Toronto’s west end, is one of the first participants in the new program.

TouchBistro currently operates iPad-based terminals that servers can use to take customer orders at the table, create dynamic restaurant seating plans and present tableside menus. The new partnership adds a payment component that had previously been missing, said PayPay Canada’s managing director Darrell MacMullin.

He said that the goal was to partner with a small, low-tech independent like Jimmy’s – which had previously only accepted cash and debit – to demonstrate how it can leapfrog larger chains with no significant capital investment.

One of the pioneers in online payment, PayPal piloted the project with Jimmy’s employees before formally introducing it to the public this week. MacMullin said PayPal has processed “quite a few” transactions, and that early feedback has been encouraging. PayPal charges participating merchants a transaction fee that is in line with the fees charged by credit card companies, said MacMullin.

“We’re not aspiring to play a cost game on credit card processing,” he said. “Where the real opportunity with this technology and checking in lies is [the fact] we’re able to provide a whole new level of value for merchants.”

Jimmy’s manager Penny Vine said in a release that the system enables customers to check-in with the PayPal mobile app before they enter the store, and streamlines the payment process by enabling customers to pay for their order without having to use cash or a credit/debit card, with the fee deducted from their PayPay account.

A customer’s photo appears on the TouchBistro terminal whenever they check in at a participant merchant using the PayPal app, enabling the restaurant to identify the customer and access vital information such as prior orders or determine if he/she is a first-time customer.

“I’m biased, but when I have to pull out my wallet and do a credit card transaction, it’s an inconvenience,” said MacMillan. “The fact that I can check in before I’m even in the store, walk in, grab my coffee and walk out, makes it so much easier.”

PayPal currently has 132 million active accounts in 193 markets around the world, processing more than 7.7 million payments each day. The company expects to process $20 billion in global mobile payments in 2013.

The company has set aggressive growth targets transactions in the point-of-sale space, said MacMullin. “This space is going to see more innovation over the next 18 months than it’s probably seen in the last 10 years,” he said. “There’s a lot of moving parts that are helping accelerate this in a much more cost-effective way and a much more seamless way than before.”

PayPlan plans further in-store activations and consumer marketing promoting the POS payment option, although nothing has been developed said MacMullin. “It’s early days, but I’m really excited about what the rest of this year is going to look like,” he said.

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