The mobile payments space continues to heat up, with Opentabs integrating PayPal within its mobile payment system to meet consumer demand for order-ahead services.

Stoked by Apple’s and Google’s appearing to be the ones to beat, Opentabs, which lets users order ahead by registering a debit card or credit card with a mobile application, is teaming up with PayPal to meet accelerated customer demand for convenience. Mobile ordering is a hot topic so far in 2015, with numerous restaurants chains announcing their own mobile ordering services or plans for them.

“Opentabs is integrating PayPal because it was on the top of our users’ wish list,” said Dirk Roder, managing director for Opentabs in Munich, Germany. “People feel safe using PayPal for online purchases and that also counts for PayPal in the bricks-and-mortar business.

“Secondly, it was easy to set up and PayPal was pleased with our PIN feature to secure payments,” he said. “It’s not the payment itself. We provide a real use case, which enables our users to skip the line or order independently from a waitress.

“The payment part makes it whole, a complete user-friendly experience,” he said.

Using PayPal
Customers who had to pay with a debit or credit card now can make PayPal debit or credit card payments through its app at participating Opentabs restaurants, including Burger King, Dean and David, Asia Gourmet, Ruff’s Burger and other establishments in Europe.

Opentabs, founded in January 2012 in Munich by Mr. Röder, Nicolas Plögert and Sebastian Heise, expects to see higher user acceptance due to PayPal’s reputation for security.

Opentabs’ usage in past three years has surged.

“We drive sales by 19 percent in comparison to regular orders,” Mr. Roder said. “Which makes it really interesting for merchants as well.”

The Opentabs app can be downloaded for free from the Apple and Android app stores.

First, users choose the restaurant and then pick from the menu. They need only a four digit PIN to pay.

The mobile payments space has gotten hot as handset manufacturers, financial solution providers and others look to shore up their own piece of the action now that Apple and Google appear to be the ones to beat.

Apple’s rollout of Apple Pay, followed by the Apple Watch, is expected to speed up acceptance of mobile payments. Google has taken steps to dominate Android mobile payments.

Meanwhile, Samsung is moving to make its own mark with the launch of Samsung Pay, following its acquisition of LoopPay.

PayPal’s acquisition of MCX partner Paydiant gave it access to major retailers including Walmart, Target and Dunkin’ Donuts.

Until there is a clear leader in the space companies across industries will have to pick and choose which payment methods they accept.

At the same time, rapid consolidation has taken place among the third-party ordering apps, with Yelp acquiring Eat24 and GrubHub picking up DiningIn and Restaurant on the Run.

For fast food burger chains such as Burger King, mobile ordering is seen as a way to strengthen relationships with the young, mobile-savvy consumers who make up their biggest target demographic. With this group displaying a growing interest in the slightly more upscale offerings of chains such as Shake Shack, QSRs are exploring multiple strategies to keep existing customers in the fold and attract new ones.

Facing challenges
The challenge for these chains with mobile ordering is bringing backend operations in line. There have been reports that, in some cases, customers pre-ordering via mobile are waiting longer for their food than those ordering at the cash register.

Opentabs’ growth by category.

The moves underscores mobile’s role in accelerating the movement to a cashless society.

“Order ahead is growing in demand,” said Sheryl Kingstone, Toronto-based research director for Yankee Group. “Our survey shows that 50 percent of respondents wish more establishments offered a mobile app for ordering ahead.

“It’s about providing a frictionless mobile customer experience. Adding payments into the mix, reduces the friction even more.”

“Our data also shows that 45 percent of respondents wished more places offered the ability to also pay with the mobile app,” Ms. Kingstone said.

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York