NEW YORK (TheStreet) - Are consumers willing to pay and tip their restaurant servers via their smartphone? Maybe, maybe not. Though, a host of mobile payments apps are betting eventually they will and feverishly working to get restaurants to sign on.
While consumer acceptance of paying for restaurant service via their smartphone has remained at grass roots levels, Starbucks' (SBUX - Get Report) strategic focus on building out a mobile payments platform for customers - and with its newest Apple (AAPL) iPhone app feature that allows customers to digitally tip their baristas -- could be the impetus this growing niche needs to move their apps into the mainstream. Mobile payments represent 14% of all in-store transactions at U.S. Starbucks, the company said at its investor day this month.
Mobile apps payments including names like TabbedOut , MyCheck, Cover and Dash, are all seeking to revolutionize the way in which consumers pay their tabs in the service industry, where tipping is common. And it's not just startups, OpenTable (OPEN)launched a pilot restaurant payment app with 13 restaurants in San Francisco it said last month.
"Even if we're not at the forefront of that now, [the Starbucks app] is still creating that awareness and soon enough creating the behaviors of consumers not only at Starbucks, but at the bars and restaurants," said Dash co-founder Gennady Spirin in a phone interview.But getting consumers to adopt the technology is a "steep, uphill climb in developed markets because the current payment systems work quite well," according to a December report by Forrester Research. "Digital wallet providers know this, so they are hard at work to incorporate features that deliver greater convenience and a more compelling commerce experience - before, during, and after the moment of payment. As the barriers to using digital wallets continue to fall (especially when it comes to mobile digital wallets) and the prevalence of highly valued benefits continues to rise, consumer adoption will rise, as well."