How to make mobile apps pay the bills
Enabling customers to pay via an app on their own device could be the key to higher turnaround and a happier dining experience, says James Stagg
Restaurant diners hate waiting. Whether it's wondering when the starters will arrive, or attempting to attract a waiter to deliver a bill, the service speed at a restaurant is a large contributory factor to a satisfied customer.
As technology advances and we spend more time staring at our smartphones, restaurateurs are beginning to take advantage of this dependence to deliver efficiencies direct to a customer's hand-held interface. This is being enabled by a growing number of suppliers pushing solutions that allow customers to order and pay without the need to attract the attention of a waiter, or wait for a PDQ machine to appear.
PayPal's head of mobile commerce, Rob Harper, says that technology is fundamentally changing the business-consumer relationship. "The first era was cash and cheques. We've then had the era of cards, which was driven by chip and pin. We're now moving on to mobile, which is caused by a number of factors," he explains. "Mobile handsets are fuller and richer. Mobile networks also offer much more cover. We're now seeing the rise of the mobile mover, the millennial, which is the person who looks at their mobile maybe 150 times a day. Technology has the potential to deliver rich new things, but also to meet some of the challenges that we face in our everyday lives, even down to paying for a drink."
Chotto Matte founder Kurt Zdesar, who developed the Ping Pong brand, says that he has been waiting some time for mobile payment facilities to be available to UK consumers.
"I've been waiting for this for a long time, having seen it some time ago in Japan," he explains. "I was close to developing an app that allows guest to book and pay myself."
Instead of taking on the development himself, Zdesar is employing the Velocity app at Chotto Matte in London's Soho and his soon to be open fish restaurant Bouillabaisse. The app means diners can book a table, monitor spend in real time in the restaurant, split the bill and pay by simply tapping their smartphone screen. When customers order and let the waiter know they're paying by Velocity, their information appears on the EPoS system reassuring the front-of-house team that the table's tab is take care of.
"I can't tell you how much easier it is for waiters," Zdesar adds. "It knocks off 10 minutes for customers too. And they can see the budget as they go.
Mexican chain Wahaca is so confident in the timesaving afforded by its app - provided by Flypay but branded to represent the restaurant group - that it has been promoting it with the hashtag #10FreeMinutes. When they've finished eating, customers enter their table number, check the bill, split it with their friends and pay. In addition, Wahaca QuickPay connects with Google maps and Citymapper to direct guests to their nearest restaurant and even allows guests to tap into the music system to see what's playing.
"The feedback from customers has been awesome," says chief executive Mark Selby. "They love the fact they can check, split and pay their bill from their phone in under a minute. We're happy that we're making a significant difference to the customer experience, while increasing speed of service across our estate."
According to Dennis Collet, chief executive of app developer Orderella, these payment solutions mean that waiting staff can focus solely on the positive side of service.
He explains: "On a night out, what are the current pain points, and can technology help to reduce the barriers? You have to focus on customer service. When do you add value? When you provide food or drink. When are you not adding value? When you're asking for money."
It means that instead of asking for money, waiting staff can be engaging with diners to deliver more information on particular products, ensuring interactions are all positive and encouraging opportunities to upsell.
In addition to removing the awkward waiting-to-pay dwell time, payment apps also facilitate a direct line to customers.
"You shouldn't look at mobile as replicating the card experience," advises Harper. "It has the ability to do a lot more. You can integrate the loyalty schemes. You can deliver targeted offers. Suddenly, it means that the customer making that purchase is no longer anonymous to you, which is key. That has the potential to be extremely powerful."
Zdesar says he's already making use of the Velocity app to target promotions at particular customers. "We do 900 covers a day at Chotto Matte, so it's obviously hard to know your customers and deliver the personal experience," he adds. "But this type of technology will enable operators to understand who their customers are and what their likes are."
The data afforded by these systems means that operators can really reward regulars without resorting to a blanket approach to promotions, adds Collet.
"These paper vouchers are, in a way, quite dumb. You don't know who's using them and you're just giving a 20% discount across the board," he says. "You want to reward the right customers with the right rewards."
The software providers say that because front-of-house staff can spend more time serving customers, and they're able to interrogate their preferences through the data provided by many of the payment, tips are increased too.
Collet says that in Orderella venues across London tipping has gone up 8%. It's a similar story for suppliers such as Zapper and Velocity, who also point to anecdotal evidence that operators have reported increased rewards for staff.
"Red Hot World Buffet has seen an upturn in tipping of 4% in their restaurants through the app," says Zapper's chief executive Gerry Hooper. "And that, to them, is a substantial amount of cash in the hands of staff."
Though the advantages are clear, what isn't so black and white for operators is which technology to implement. Right now the market is awash with ordering and payment software suppliers targeting hospitality businesses. And that's before the launch of Apple Pay into the UK market next month. Inevitably, not all will survive and those that aren't able to attract significant coverage will soon lose momentum.
"The consumer needs to know that they can trust the solution, which then gives confidence that the platform works and the service is going to be great," says Harper.
So there is certainly plenty of choice, but without one player standing out above others, what it comes down to is service, both from the software supplier and the potential a particular solution has to improve the customer experience.
Seven hospitality payment solutions
The backers Bookatable, MyCheck and PayPal, which process almost 11.6 million payments a day.
Functionality Users will be able to find restaurants with pay-at-table technology and pay for the entire bill amount or split the bill with others via PayPal or a registered card on a MyCheck account.
Early adopters It is aiming at restaurant chains, and is already in use at Busaba Eathai.
How to integrate it The technology is fully integrated into the Bookatable App. MyCheck handles further integration with the electronic point of sale in the restaurant for the venue to manage payments and publish order information back to the app user. MyCheck has also integrated with PayPal to allow app users to pay using a card through a MyCheck account or by PayPal.
The investment The MyCheck team says that investment is limited for restaurants as it works alongside the EPoS partners to create a seamless integration.
The backers Flypay was founded by chief executive Tom Weaver and chief technology officer Chris Evans. They started trading in June 2013.
Functionality Flypay enables customers to order their meal and check, split, tip and pay their bill from their smartphone. The app can be branded to feel like an operator's own system, and includes the facility to offer loyalty incentives. Flypay also offers an order and collect service, whereby customers can order their food and collect it at a time that suits.
Early adopters Flypay's technology is currently available in over 100 restaurants and bars across the UK, including Wahaca, Gourmet Burger Kitchen, Cabana, Jamie's Italian and Drake & Morgan.
How to integrate it The technology is integrated into the point of sale system, sending data to the PoS as customers order and pay, which will update the respective table or order in real time. Flypay also integrates with all other back-of-house management processes, such as financial reconciliation.
The investment Flypay is charged to operators on a per-transaction or monthly subscription basis.
The backers The launch and version one of the product was entirely funded by the founders. Since then the company has been through two Enterprise Investment Scheme funding rounds. It is currently about to start its Series A funding round.
Functionality The app allows consumers to order and pay for food and drinks on their phones. When they place the order, they can choose to collect it at a designated Orderella pick-up point at the bar or have it delivered.
Early adopters Orderella is in use in over 200 venues across the UK and Ireland. It is focused primarily on bars and clubs, but also includes stadiums, festivals, restaurants and coffee shops.
How to integrate it It can be installed as an entirely new system that acts as a separate entity from the venues' current back-office systems. Alternatively, it can be integrated into the venues' existing back-office system.
The investment The founders say that there is no high capital investment required.
The backers QikServe is a venture-backed company, founded by Daniel Rodgers and Ronnie Forbes in 2011. Before QikServe, Forbes founded and built Mobiqa, a mobile ticketing specialist, culminating in a successful exit to a US multinational.
Functionality QikServe allows diners to scan a QR code at their table to order food and drinks and pay through the app. Longer term, it offers operators targeted marketing through customer insight. Using the web-based QikServe content management system, the restaurant operator can define the customer journey and available features. This can include check-in, service model, ordering, payment, social media, marketing and loyalty.
Early adopters Best Western is currently using the system for room service ordering. The founders say that QikServe is also being used by individual outlets and hospitality chains across the UK, Europe and the US.
How to integrate it QikServe partners with Oracle's Micros Platform to provide integration with the point of sale system.
The QikServe payment gateway solution also plugs directly into an operator's existing merchant service.
The investment Operators can opt for a monthly fee based on the number of transactions, or a percentage of the value of transactions processed.
The backers Founded by two young London entrepreneurs, Velocity has been developed by Zia Yusuf, a former Goldman Sachs executive director and Alex Macdonald, a former turnaround chief executive for AIAC. Backers include Aaron Simpson (co-founder of Quintessentially Group), Tom Glocer (former chief executive of Thomson Reuters and chair of Morgan Stanley's technology committee), and Val Gooding (board of Vodafone and TUI Travel).
Functionality Velocity lets consumers view, pay and split their bill instantly from their phone. Loyalty programmes can be built in to the app, through which users earn points to be redeemed against restaurant offers.
Early adopters Velocity is live in London venues including Peyote, Burger & Lobster, Chotto Matte and the Cuckoo Club. It will soon be rolled out at restaurants such as Sketch, Gymkhana and Hix Restaurants.
How to integrate it Velocity integrates with a restaurant's existing point of sale system. Its founders say that it's highly scalable.
The investment Velocity declined to discuss pricing, beyond explaining that it is free to install. It said that the ongoing cost for the venue was small and a fraction of the value the service adds.
The backers Wi-Q was founded by a stakeholder group including Essex-based multimillionaire entrepreneur Graham Cornhill.
Functionality Developed as a "queue-busting solution", Wi-Q is integrated HTML software that allows customers to order and pay from their own device. It can be used on any Wi-Fi-enabled mobile device, enabling customers to pre- or live-order their choices from the menu, add to their order and request or pay their bill from their seat, removing the need to queue.
Early adopters Wi-Q is currently live at Gordon's Wine bar in London, PWC, and the Lion Inn, Boreham. It is working on integration at a number of other venues.
How to integrate it Controlled from a central portal that can be integrated with any existing EPoS or apps. Wi-Q is branded and tailored to an individual outlet.
The investment Wi-Q is available as a revenue-based software as a service model from £1.47 per day.
The backers Ashley Head is both chairman of the advisory board and one of the investors of Zapper. Head was one of the founders of DataCash, an online payment company. Its UK division is led by chief executive Gerry Hooper, who previously worked at PayPoint as head of retail sales.
Functionality In its simplest function, Zapper is a mobile payment app with scope for direct marketing. The app allows users to scan a QR code that Zapper prints on the bottom of a venue's receipt and subsequently gives the option to split the bill or add a tip and then pay using a registered card. It also allows data capture that can inform bespoke promotions.
Early adopters Over 600 venues in the UK use the app, including Burger & Lobster, Iberica, London Fine Dining Group, Red Hot World Buffet and Camino.
How to integrate it There are two options for integration with Zapper. The first is a plug and play solution that relies on a proprietary interceptor that is installed between the PoS system and the printer. The second option involves direct integration with the EPoS provider, thus no longer requiring the installation of Zapper's interceptor. Thus far Zapper has integrated with operators including Revel Systems, ICRTouch and SalesVu.
The investment Zapper negotiates a fixed monthly cost or processing fees (a percentage per transaction).