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Can Apple Pay Work at Sit-Down Restaurants? Cover, an Uber-Like Payments App, Says Yes.

"People genuinely love Apple Pay."

Nejron Photo/Shutterstock
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Shoppers can use Apple Pay to tap and pay with their phones at brick-and-mortar stores. They can also use Apple Pay on their phone to pay for stuff within apps. But what about using Apple Pay in an app to pay at a brick-and-mortar location?

That’s what a few hundred restaurants are starting to do in partnership with some apps, including OpenTable and Cover. Cover, a startup that works with nice restaurants to let diners pay through Cover’s app rather than exchanging a paper bill back and forth at the end of the meal, introduced Apple Pay as a payment option about a month ago. And 21 percent of its 8,000 first-time customers during that period who used a phone that supports Apple Pay chose to pay with Apple’s new system.

How does this work? Previously, when diners signed up with Cover, they had to provide the app with their credit card information. Now, they can instead choose to just use their Apple Pay account, which is linked to a credit or debit card, but in a new type of security system. Apple Pay stores and transmits only a placeholder ID instead of an actual card number, and the placeholder or “token” only gets matched up with actual card account information inside a card network or bank’s system. Cover and the restaurant will never see card information of a Cover diner who pays with Apple Pay.

What does Apple Pay mean for Cover? Co-founder Mark Egerman said the percentage of people who have downloaded the app and then actually used it to pay in a restaurant has risen materially since introducing Apple Pay. And he also thinks it will help get people to download the app in the first place.

“People genuinely love Apple Pay,” he said. “It’s been fascinating to watch.”

There are some caveats. Egerman said it’s hard to identify the exact conversion increase, because Cover’s overall conversion numbers are increasing as it adds more restaurants to its payment network. Cover’s user base also skews young and toward an early-adopter segment, the kind of people who would get a kick out of Apple Pay in the first place. Also, Apple Pay still faces several big hurdles before it becomes anything close to mainstream.

But Cover, which works with 250 restaurants across New York City, San Francisco and Los Angeles, is not alone in thinking Apple Pay could become a thing in restaurants. OpenTable, too, allows diners to use Apple Pay in the 267 restaurant locations that support the Pay With OpenTable mobile payments feature.

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