Tabbedout, a mobile payment system for restaurants and bars, is now upgrading its system with customer relationship management tools that helps merchants understand who’s walking in the door and helps them treat customers better. Now, when a customer opens a tab through the Tabbedout mobile app, restaurant owners can see if he is a new customer or a regular, how much he normally spends and what he prefers to order.

Merchants can also receive direct feedback from customers through the Tabbedout app. That allows them to respond directly to a customer or offer a special coupon to thank him or soothe him after a bad visit. And with the new CRM tools, Tabbedout merchants can also segment and target their users. Merchants can send an offer as a reward for a loyal customer or entice a new customer to come back and get back data on how many offers are actually redeemed.

These tools are important because restaurants typically don’t have a lot of great insight into their customers. Now, they can treat more of them like regulars and shower them with personal attention. That’s something that Jack Dorsey has talked about with mobile payment system Square, which he says can help facilitate more human interaction.

For Tabbedout, it’s also important because the mobile payment system actually limits customer interaction during the checkout process. Since customers are able to checkout without having to wave down a waiter to request and pay for the check, restaurants have fewer chances to leave a good impression at the end of a visit. But if a waiter or manager has more data up front, they can use it early during a visit to make customers feel at home.

Austin, TX-based Tabbedout, which integrated with T.G.I.Fridays’s app in April and released an SDK in September, continues to impress me and I’m hoping that it can grow its footprint across the country. It is currently available in more than 1,000 locations.

As I’ve written before, the act of just paying my bill at a restaurant is often a hellish exercise in repeatedly trying to grab my waiter. Allowing me to check out automatically on my own timing makes the experience a lot better. But now with better CRM tools, Tabbedout is giving merchants more reasons to adopt the payment system, beyond just saving customers some aggravation and time.

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That’s why I’ve been excited about Tabbedout, an Austin, Texas startup that has been trying to speed up the process of paying at a restaurant or bar using a smartphone. The company has been signing up restaurants that use its mobile app to help customers open up a tab on their phone and then check out with a stored credit card. Now, it’s letting restaurants that have their own mobile app easily embed the Tabbedout experience with a mobile SDK for iOS and Android. This way customers aren’t forced to use Tabbedout’s app.

Tabbedout in April integrated its payment technology into T.G.I.F’s Friday’s app, which was the first time it offered its mobile payments in another app. With the mobile SDK, other restaurants can drop in Tabbedout’s payment framework into their app, which can communicate securely with Tabbedout’s infrastructure.

Consumers just open the restaurant app and start a tab using a stored credit card. During their meal, they can see what orders have been added to their bill. When it comes time to settle up, they can just pay with their credit card from the app. Users can also choose to split the bill with other people in their party. Unlike other mobile payment systems, Tabbedout doesn’t rely on businesses owners buying scanners or NFC readers. That’s because it’s integrated on the backend with point of sale terminals from Micros, Future POS, Focus and Dinerware, which covers about 70-80 percent of the restaurants and bars in the U.S.

Arturo Coto, VP of sales and marketing Tabbedout told me that restaurants are starting to realize that the slow payment process can be a liability for them. Many have traditionally prized the payment interaction as the final chance to leave a good impression.

“What they’re realizing is delays in the process like if a server is busy, can only ruin the experience,” Coto said. “They’re starting to see the value of mobile payments as an enhancement to the guest experience rather than taking away from that last touch point.”

Tabbedout is currently deployed in 1,000 locations including 380 T.G.I.F. restaurants. It has two more big chains poised to integrate Tabbedout into their mobile apps, Coto said. The new SDK will not incorporate PayPal as a funding source, even though Tabbedout started testing PayPal integration at restaurants in Austin earlier this year.

The new SDK won’t work for restaurants that don’t have their own mobile apps. But for those that do, it makes their apps a lot more usable instead of just offering menus or location finders. And it really shows how the checkout experience can be improved through mobile payments. Having to wait for a waiter to appear several times has often kept me at a restaurant much longer than I wanted to. If I can be assured my bill is accurate and then pay when I’m ready to pay, that makes the whole experience more enjoyable.

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Users will now be able to fire up the Fridays app and enter their credit card as a payment option. After ordering from a server, they can pay their bill using their card on file when they’re ready to leave. The Fridays integration will cover 350 of the chain’s 600 locations, with the remaining restaurants, most of them franchisees, expected to sign on in the future. The Fridays deal is the largest for Austin, TX-based Tabbedout, bringing its total distribution to 800 locations nationwide.

For now, users will only be able to pay with their credit cards, though other options will be added later. Tabbedout recently announced a partnership with PayPal  which will serve as another payment option for Tabbedout users.

Kevin McKeand, VP of sales for Tabbedout, told me the mobile payment integration gives Fridays a way to improve the customer experience inside a restaurant while still giving servers a way to interact with customers. He said Fridays is the first national chain to enable this kind of mobile payment service that gets integrated into a restaurant’s payment system. The deal, McKeand told me, was made possible by the work Tabbedout has done to integrate with seven of the biggest point of sale providers; in this case Micros. Tabbedout’s advantage is that it integrates with a restaurant’s POS system, making it easy for people to pay their bill without having to wait for a server to deliver it to their table.

For Fridays, the new Tabbedout integration is part of a bigger effort to build up the chain’s brand. The company previously experimented with QR codes on menus and location-based advertising. The new Friday app will be available on the iPhone initially with Android support to come later.

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No mobile payments accepted here.

I’ve seen a lot of things at South by Southwest, but what I haven’t seen are mobile payments. I haven’t seen a single person pay for something with their phone or a merchant that would even accept such a payment. Granted, it is hard to find people paying for things at SXSW, given the free beer and free food everywhere, but other than a Googler showing off his Nexus and telling me how much he loves Wallet, no one has even mentioned mobile payments.

Now, clearly I have not witnessed purchases by the more-than-20,000 attendees, and with venues spread out across 15 different places, I may just be in the wrong place at the wrong time, but mobile payments are supposedly hot, and if any crowd would be trying them out, I figured I’d find them here. And there is talk from vendors on the topic: Isis, the mobile-payments effort created by the phone carriers, is showing off its payments platform this week and has booths at the show, but it won’t fully launch until summer.

TabbedOut, one of my hot Austin startups to meet at SXSW from 2010 and the makers of an app that integrates with PayPal to let you pay your bar tab with your phone, has a product, but no one is talking about in my SXSW circles. PayPal is also showing off a new digital wallet to be launched this summer, but like Isis, it’s just too early for use now.

So despite Google Wallet, which is out there but hard to find on handsets (Google is reportedly pressuring developers to make use of it), maybe we’re still too early in digital payments. Perhaps next year is the SXSW when I can leave my wallet at home (but not my charger). In the meantime, if you have a Galaxy Nexus, here’s how to get Wallet and start tapping instead of counting out bills.

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Tabbedout users will be able to add PayPal as a payment option alongside existing choices for credit and debit cards. Users will still need to open a tab using a credit or debit card saved to their Tabbedout account when they enter a participating business. But when it comes time to settle up, they can enter in their email address and password to pay using PayPal. Tabbedout users can then just walk out without having to deal with a waiter.

I like Tabbedout because it addresses a specific use case for paying at restaurants and bars. While a lot of the talk in mobile payments has focused on retail and smaller merchants, there’s still a chance to make mobile payments a big reality in hospitality. Tabbedout, for its part, has done a lot of back-end work to integrate with eight point-of-sale systems that allow it to work in more than 70 percent of the establishments in the U.S., it claims. AisleBuyer and others have also tried to tackle some of this problem.

Tabbedout, however, is only available in about 400 locations across the country, so don’t expect to be able to use it in many places though SXSW visitors will get the first crack at it. PayPal integration will start in Austin before expanding to the rest of Tabbedout’s footprint. Tabbedout founder Rick Orr said PayPal integration has been the biggest request for consumers. He said with PayPal’s brand, the company expects to greatly expand the number of merchants it acquires this year. Tabbedout, which finalized a $5.7 million funding round last year, is also testing a new offers systems that allows merchants to offer discounts to Tabbedout users.

“The last two years has been used to establish integration; it’s a model that didn’t really exist before,” Orr said. “Now, we’re very excited to leverage PayPal’s 106 million users and secure online commerce systmen to bring payments into the offline world of bars and restaurants.”

The PayPal integration is interesting because it shows how the payment company is working to get into real physical locations. Its payment system usually doesn’t require hardware upgrades unlike many NFC-based systems. But it needs software integration to work with existing POS systems. PayPal has been striking deals with POS-terminal makers and software providers to get its in-store system up and running in retail locations. But Tabbedout has done much of the work already at restaurants, so it makes it a good partner for PayPal.

“We have a strong appreciation for the work required to get into the POS systems and we have no desire to replicate any of that ourselves,” said Scott Dunlap, VP of emerging opportunities for PayPal. “Tabbedout’s system is seamless and you can do offers and we just liked it and the fact that for merchant it’s so simple to get up to speed.”

I wonder if PayPal will ultimately just buy Tabbedout or eventually work around it to establish its own connections to restaurants and bars. It could just run it all through its PayPal app, which is already being envisioned as a way to pay at coffee shops and other small eateries. This would be a logical step as it looks to expand payments to the real world. If PayPal can connect into all manner of POS systems, it can move toward becoming a universal digital wallet. Dunlap declined to talk about potential acquisitions, but he said this is just part of a bigger expansion of PayPal’s offline ambitions.

PayPal should have made the move to offline payments a while ago. Instead, it has let companies like Square, Isis and Google rise as big competitors. But PayPal seems to be putting the pieces together to make its online payment push a reality. Not everyone likes to use PayPal and some might find it less familiar to use in a real-world setting. But it’s making the investments and securing the deals it needs to be a big contender in mobile payments.

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Tabbedout has a cool take on mobile payments, because it focuses on a specific goal, to make the process of settling a tab easy and quick. Users who download the mobile app store their encrypted credit card information on their device. When they arrive at a participating restaurant or bar, they just start a tab for that location and their payment information is sent directly into an establishment’s payment system, so the waiter never has to take or swipe the card. That’s good, because it cuts down on fraud from sneaky waiters. But it also means that a consumer is charge of their bill. When it’s time to settle up, they just pay through the app. A 99-cent fee is assessed for each transaction.

“This gives customers a great deal of control,” said Tabbedout CEO Rick Orr. “This removes the chance of waiter fraud. Now I can see my tab throughout the night. At the end of the evening, I can open the tab, set the tip and pay, or if I forget, the venue can close me out.”

Orr came up with the idea after enduring an almost hour-long wait for a bill. He said Tabbedout helps consumers get out quickly and also helps them split bills between a group. And it also benefits busy restaurants, freeing up wait staff to service customers and taking the payment responsibility out of their hands.

Tabbedout has a ways to go before it’s a mainstream hit. The company has just 200 restaurants and bars lined up in 90 cities. But it’s done a lot of back-end work to set up some quick growth. It previously signed deals with point-of-sale providers Future POS, Jumpware and others and is now embedded with MICROS System’s point-of-sale offering, which is used in 130,000 restaurants and bars. Tabbedout still needs to convince business owner to turn the system on, but it’s a simple software update to enable Tabbedout.

I like where Tabbedout is going. It’s an elegant solution for restaurants that take credit and debit cards, but want to streamline the payment process for themselves and their customers. While offerings like Square work well for the 27 millions merchants who don’t take credit cards, Tabbedout makes sense for the many establishments that do. Orr said he’s also considered allowing customers to order ahead through Tabbedout. But he said that introduces a lot of questions about how to get orders to the right person and how to take care of custom orders.

There are a lot of companies approaching restaurant owners and merchants these days to help them optimize their business. But with the spread of smartphones and the rising familiarity of mobile payments, I think Tabbedout could find fast acceptance now that it has the money and the right partners in place.

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ATX Innovation, which makes TabbedOut, an app that enables bar and restaurant patrons settle their tabs from their iPhone or Android handsets, has raised $2.05 million in funding from NEA, for a total of $2.8 million raised.

TabbedOut, which launched at SXSW last year (see my coverage), integrates with point-of-sale software. It has 10 partners with four integrations complete, said ATX CEO Rick Orr. That means the app has the potential to service 30 percent of the U.S.’s 500,000 restaurants and bars. In reality, the company has deployments at only 90 total venues. It’s working on partnerships with chain restaurants so TabbedOut can grown more quickly.

Each TabbedOut transaction carries a convenience charge of $0.99, but ATX waives fees for new users, and is talking to restaurants and sponsors about subsidizing fees. The company is also adding new features like the ability to split checks (which is live on Android, and waiting for approval on the iPhone). Orr said there are already indications that TabbedOut is inspiring customer loyalty, with more than 65 percent repeat usage.

I really like the way TabbedOut combines the physical and digital worlds; like Taxi Magic, it turns your mobile phone into a remote control for your life. It’s also a promising way for mobile payments to move from their sweet spot of virtual goods into the real world.

NEA is also an investor in the mobile social app Loopt. Orr said that ATX is unlikely to integrate many social features into TabbedOut due to the sensitive nature of its users spending their money, but that the company plans to add information about where your friends are out from services like Gowalla so you can go find them after you settle your bill.

ATX has nine employees and is based in Austin, Tex.

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“Having just launched in January, the integration hurdle is where we are now,” said Rick Orr, CEO of TabbedOut maker ATX Innovation, in a phone interview. But the company is trying to make the most out of an influx of its exact target audience of smartphone users at crowded bars by releasing an Android app on March 15 and handing out three free tabs to all users in Austin during SXSW.

The way TabbedOut works is you store your credit or debit card account on your phone, then file your order through the app. It pops up on the merchant’s point-of-sale system for them to fulfill your order and accept your payment (right now TabbedOut is integrated with Future POS and Jumpware). Users pay a convenience fee of 99 cents.

The concept is similar to one of my favorite iPhone apps, Taxi Magic, which lets me hail and pay for cabs without dealing with a phone dispatcher, cash or credit cards for a $1.50 fee.

Orr said that TabbedOut’s next core locations will be New York, New Jersey, LA and the San Francisco Bay Area. ATX has raised a Series A round from investors including Trellis Partners and Raven Capital Partners.

SXSW seems like an opportune time for other payments startups to have their own coming out parties. We contacted Square — the mobile transaction company founded by Jack Dorsey of previous SXSW breakout success Twitter — to ask about its SXSW plans but haven’t heard back yet.

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