Panera (PNRA) to Simplify Payment by Integrating Apple Pay - Analyst Blog

Panera Bread Company ( PNRA ) announced that it will integrate Apple Inc.'s ( AAPL ) recently launched payment platform, Apple Pay. The payment platform will be available in the U.S. in October with the release of iPhone 6 and iPhone 6 Plus and it will be accepted at all participating Panera Bread outlets.

With Apple Pay, customers will be able to pay bills simply by holding their iPhone 6, iPhone 6 Plus or Apple Watch near the contactless readers. It will thus simplify the check-out process for cashiers and make payments faster and more convenient for guests. The Apple Pay facility will also be available for consumers opting for pick up or delivery through the Panera Bread iOS App.

In this regard, Panera will also incorporate Apple Pay into the Panera Bread iOS App and install VeriFone payment terminals at company-owned and franchise cafes across the U.S. to support contactless and NFC (near Field Communication) payments.

However, security continues to remain a concern.

Historically, concerns over security have primarily driven customers away from mobile payment systems. So Apple has put security at the top of its list of priorities for Apple Pay. Users need only wave or touch their phone near a reader and then enter a PIN or their fingerprint.

Transaction data is directly transmitted from the phone to the point-of-interaction using a near-field communications (NFC) antenna built into the top of the phones. Thus, there is no need to use a physical card.

Another key question is whether Apple Pay will make the "Fast-Casual Restaurant" Quicker?

Speed is the key at a fast-casual chain. Consumers are willing to pay premium prices for higher-quality food than they find at a quick-service restaurant, but the service needs to be reasonably speedy. During rush hours, complex menus hamper the process, leading to errors. In fact, it was to lower the waiting time and speed up service that Panera 2.0 - a digital ordering platform - was launched in Mar 2014.

We believe that with the integration of Apple Pay, Panera will be moving closer toward achieving its goal of improving its operational efficiency.

Panera currently carries a Zacks Rank #4 (Sell). Better-ranked stocks worth considering in the restaurant industry include Jamba, Inc. ( JMBA ) and Chipotle Mexican Grill, Inc. ( CMG ). Both these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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