The Case for an OpenTable Mobile Wallet

What we’ve already established: quick-service restaurants (QSRs) don’t want third parties managing the mobile experiences of their customers. McDonald’s, Dunkin Donuts and now Subway have all bucked third-party mobile wallets like Square, PayPal, LevelUp and ISIS in favor of an independent approach that harnesses brand commitment and customer engagement. Such moves for driving loyalty would naturally draw the attention of full-service restaurants like Applebee’s and Olive Garden.

And while loyalty and deals are important for the dining industry at-large, the in-store experience also ranks high in mobile agendas for full-service restaurants. A restaurant-specific mobile experience might include real-time alerts on table availability / queuing, information on menu items / nutrition and table-side assistance (on-demand ordering, bill retrieval and beverage replenishment).

These value-added mobile features are sure to make for an astounding dining experience but that doesn’t mean full-service restaurants should deploy a branded mobile app like QSRs have. These sit-down establishments fall victim to the same disadvantage of retailers that sell high-value or specialty products: even the most loyal consumers don’t visit their stores all that often, relatively speaking.

Restaurants must weigh the benefits of a proprietary mobile experience versus the risk that many of its customers will bypass their independent app all-together due to hassle of download and information entry. I love Hard Rock Café but get there only about once or twice a year; a rock star mobile app probably isn’t enough to sway me to their restaurant by itself when I consider the time required to configure personal information and payment credentials for just their app.

The better approach for Hard Rock Café to lure me into their restaurant is sticking a $5 voucher in the OpenTable app that already contains payment information. Full-service restaurants are better off lending themselves to an ‘aggregate mobile wallet’ as a way of breaking into the mobile universe. We’ve seen such an approach in the MCX (Merchant Customer Exchange) mobile wallet and, for delivery-capable restaurants, the participation in the Seamless or GrubHub platforms that touch a large dining base.

open-table-reservation-iphoOpenTable is a good bet because its solutions are tailored to the dining industry and the company has already achieved considerable scale in restaurant partners. OpenTable has the ability to leverage its existing reservation and table queuing software to trump the generic mobile experience offered through Square or PayPal’s mobile wallets. And with geolocation especially important to restaurants, it wouldn’t surprise me to see an OpenTable wallet incorporate the increasingly popular BLE and beacon technology package.

It remains to be seen how card networks and issuing banks will ultimately combat third-party ownership of the mobile wallet in dining, where card brands have traditionally received considerable exposure at check request (branded cards stuffed in bill folders stamped with a Discover or Amex logo). But brand concealment is a challenge that financial institutions are destined to face as third parties take a more active role in the payment and overall consumer experience.

You get the impression that the end players in mobile payments will be limited to about a dozen parties that control a specific payment type (rent and mortgage, P2P, etc) or spend category (fast food, big box retailers, transit, entertainment, etc). OpenTable would fit the bill in the unique restaurant business but benefits offered through the app must warrant time invested by consumers to input personal and financial information.

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