When I go out to a bar for drinks with friends I usually end up opening a tab with the bartender. I never feel comfortable doing this. I usually wish I could just pay cash. Leaving a credit card with a bartender, who usually puts it in an organized box, while you spend the next few hours hanging out with friends, is not very secure. It is not the bartender that I am worried about, or anyone in particular, it just invites the opportunity for something to go wrong.

Another downside to leaving your credit card with the bartender is that you may forget it when you leave. After a few drinks one could understandably become forgetful. Aside from the inconvenience of having to drive back to the bar later, some bars will add a fee to your tab if you forget your card.

So what if there was a way to avoid all these inconveniences? Well there is. TabbedOut is a very innovative new iPhone app that allows you to open and close a tab from your iPhone. How cool is that! ATX Innovation developed this app right here in Austin, TX and they already have a number of bars in Austin using their service. And that number is growing.

Let’s take a look at how it works.

• First you have to download the app from the App Store to your iPhone and set it up. One of the great features about TabbedOut is that all of your sensitive information is securely stored on your iPhone and not on a server somewhere. And you are not required to setup an account with TabbedOut.

• Once you have downloaded and set everything up you can easily find the nearest bars that use the service by selecting “NearBy.” Soon TabbedOut will include a feature to manually search for a location.

• Once you get to the bar you can open your tab right on your iPhone. TabbedOut is integrated with the bars Point Of Sale (POS) system so once you open a tab the bar is provided with your payment information. This allows you to leave quickly whenever you are ready.

• When you are ready to leave you will be able to see everything that has been charged to your tab. Once you have reviewed your tab select the tip you would like to include and then hit the button that says “Pay Tab.”

• How easy was that. And you even have the option to send yourself a reciept to your email inbox.

I had the opportunity to meet up with Rick Orr, the CEO of ATX Innovation (the creators of TabbedOut) to see it in action and get the rundown on how it works. Rick explained how this idea has been in the works for years and as mobile technology progressed, the reality of implementing a system like this became possible.

We discussed how easy it is to integrate the software with the Point Of Sale (POS) systems at restaurants and bars. They have already built a number of partnerships with producers of POS systems. For a restaurant or bar to start using TabbedOut all they need is a supported POS. From there the setup is very painless and it doesn’t cost the restaurants and bars anything to adopt this payment option.

TabbedOut makes its money by charging a small fee, currently $0.99, to the user’s iTunes account. The fee is charged for each tab that is opened. According to Orr this fee could change in the future and may be different in different locations.

After seeing TabbedOut in action, I am very impressed. My suggestion is to download TabbedOut to your iPhone, for free, and give it a try. You may start begging your favorite bars to adopt this service. And for those of you that don’t have an iPhone, it will soon be released on Android and Blackberry platforms.

I did a video interview with Rick Orr and unfortunately the sound did not turn out to be usable. But below are some images of the interview.

Follow TabbedOut on Twitter: http://twitter.com/tabbedout