28 July 2014

Tipping chaos looming for Australia’s hospitality industry

Chaos may be looming for Australia’s 37,700 restaurants, cafes and pubs1, when signatures are officially abolished on all credit and debit card payments this week.

From this Friday, customers will be forced to use a PIN to process credit and debit card transactions, which could spell the death of tips from grateful customers.

Tyro Payments co-founder Andrew Rothwell said “while PIN usage has increased in the past six months, 10% of all Australians will have to use their PIN for the first time. Imagine cardholders searching in panic for cash to offer a tip, because they can no longer offer this as part of the signature process,” Mr Rothwell said. Tipping is likely to be the casualty of PIN transactions with tips expected to fall by double digits, similar to the UK experience.”

According to new research by Tyro Payments, PIN usage increased from 59% to 78% between November 2013 and June 2014 for 10,000 small-to-medium businesses, including many restaurants, cafes and pubs. However, eating places and restaurants are laggards with 66% PIN usage. That reflects the lack lustre acceptance of mobile terminals and the waiter staffs’ fear for their tips.

“Currently customers can insert a tip at the bottom of the credit card transaction when they sign for the bill at their table, but with typical PIN transactions the amount is locked in at the front desk when staff key in the details,” Mr Rothwell said. “That means the only way customers can offer a tip is to dig into their own pockets and provide a cash tip on top. It could see the end of tipping as we know it, which is a key source of income for restaurants and their staff.”

The solution to this problem however is available today. “A simple, fast and secure payment process integrates the restaurant management software and the payment terminal, allowing patrons to use the EFTPOS terminal at the table at their own pace to nominate the amount they want to pay, split the bill, tip and pay using their PIN,”2 Mr Rothwell said. “It also makes restaurateurs’ lives easier when reconciling payments at the end of the shift.”

Tyro launched its mobile EFTPOS technology two years ago working with the hospitality community developing and testing its solution. “We beat the big banks,” Mr Rothwell said. “With appropriate wait staff training, to give customers privacy when paying with the terminal, and Tyro’s easy to navigate workflow on the terminal, loss of tips need not be the nightmare restaurateurs imagine. We knew that customers and restaurateurs would be impacted by the change and have worked on a solution that would ensure that nobody would be unnecessarily inconvenienced.

“Tyro’s solution is supported by diners, restaurant staff and restaurant managers who no longer have to spend lonely nights, after staff have gone home, punching numbers into terminals to process tips. The PIN requirement puts the customer back in control. It’s virtually impossible for a fraudster to ascertain a PIN, while forging a signature is easy. Our wireless integrated pay at table EFTPOS system is a perfect complement to eliminating credit card signatures.

“Tyro’s mobile terminals revolutionise the customer paying experience and makes restaurant staff and owners lives much easier.”


  • Current users of the terminals have reported positive outcomes such as halving the number of trips a waiter makes to the table to close it off.
  • The end-of-day reconciliation and tip completion cease being problems for the restaurateurs.
  • Customers never lost sight of their credit cards as they did in the past, which means they have total security over them.
  • Diners have a broader choice of cards. They will no longer be limited to today’s signature based credit cards, but will be able to use Australia’s popular EFTPOS debit card at the table.
  • Restaurateurs using mobile terminals potentially save in merchant service fees when their patrons use the EFTPOS debit card instead of a credit card.

1 http://www.restaurantcater.asn.au/magazine/tipped-off/
2 https://www.tyro.com/solutions/payments/eftpos/industry/hospitality

Need to know more?

For more about this news story please contact:
Monica Appleby, Head of Corporate Communications on 0466 598 946 or mappleby@tyro.com
Sophie Cotterill, Corporate Communications Manager on 0414 960 292 or scotterill@tyro.com