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Restaurants are ripe for mobile payments, and OpenTable is in the catbird seat

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OpenTable this week announced the expansion of its restaurant-focused mobile payment service to New York and said it will continue to roll out the offering to 20 more markets by the end of the year. The offering, which launched in a dozen restaurants in San Francisco several months ago, is integrated with restaurants’ existing billing systems to enable diners to view their checks as they’re updated in real time, then pay and leave a tip through the OpenTable app without having to flag down the server to conduct a transaction.

Of course, OpenTable isn’t the only player looking to enable users to pay their checks via mobile devices. The Wall Street Journal recently noted that major chains such as Chili’s and Buffalo Wild Wings are using tableside tablets to allow users to order and then close out. TGI Fridays is experimenting with an app that reads a QR code to help customers pay their bill with a credit card at their convenience. And a small army of developer startups is hoping to compete with OpenTable including Cover, Dash, Flypay and TabbedOut.

Why mobile payments fail at the retail level

There’s no shortage of reasons why mobile payments have failed miserably in North America (aside from Starbucks): A confusing morass of competing technologies has left businesses confused about where they should invest and prevented consumers from learning how to use any particular system. Additionally, most offerings are relatively complex and unintuitive, requiring more time at the point of sale than traditional payment methods. Finally – and most importantly – mobile payments typically fail to add any value to the transaction. Retailers, advertisers and others have yet to develop the relationships and business models that can increase sales by providing mobile-only discounts or other goodies that lure customers.

But the traditional payment method is different in most restaurants, providing a problem that mobile payments can solve. Asking for a check, then paying with a credit card or cash is unnecessarily time-consuming and requires a silly back-and-forth between the customer and the server. Mobile payments can eliminate the back-and-forth, enabling users to pay whenever they’d like and simply walk out. Moreover, a comprehensive system would inform diners about what they’ve ordered and a running tally of what they owe, providing information that otherwise is a hassle to obtain.

In these early days, OpenTable is the favorite

Restaurants seem to be very fertile soil for mobile payments, then, and no company is as well positioned to tap that market as OpenTable. It claims more than 30,000 restaurant partners in the U.S. and several other markets, and 530 million diners have been seated via its web site or mobile app. Additionally, it already has a software presence in restaurants through its Electronic Reservation Book, and its system of rewarding points to diners who make reservations for off-peak hours could easily be expanded to include mobile payments. And it’s likely to pursue that market much more aggressively in the wake of Priceline’s $2.6 billion acquisition.

I’m still not convinced that mobile payments are a great fit for all kinds of eateries – credit cards and cash still appear to be the most appropriate payments systems at fast-food chains where transactions are conducted at the counter, and systems such as Square are probably best suited to fast-casual restaurants where payments might be made at the table with each additional order as the meal progresses. For the kind of traditional, mid- to high-end restaurants where OpenTable’s reservations and table management systems thrive, mobile payments could be a very good fit.