Payments Dialog: Contactless and Order Ahead Payments at Restaurants, a conversation with OneDine

On this episode of Payments Dialog, we speak with our guest, Rom Krupp, CEO and founder of OneDine, about the rapid evolution of contactless and order ahead technology and the unique payments opportunities now found in casual dining, malls, parking lots, virtual food halls, hotels, and everywhere in between.

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Want to see how Spreedly can help your payments teams in the travel and hospitality or order ahead industry? Reach out to us here.

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Rough transcript of this Payments Dialog:

Peter Mollins:

Well, hello, and welcome again to another edition of Payments Dialog. I'm Peter Mollins with Spreedly. It's great to have everyone here again. I'm joined today by Rom Krupp, who's the CEO and founder of OneDine. Rom, welcome to Payments Dialog.

Rom Krupp:

Great being here.

Peter Mollins:

Terrific. Well, Rom, maybe you can kick off, if you don't mind, with just giving a brief introduction of yourself and OneDine.

Rom Krupp:

I've been in restaurant technologies for about 25 years now. Started more on the operational side with point of sales, and front of the house, back of the house automation, over the years created different technologies around ERP, financial, machine learning, analytics. And then, my most recent venture is OneDine, where we focus on the guest experience, how to optimize labor, how to optimize table turns, how to create, in this case, in the world of COVID, contactless experiences, and overall, just enhance the guest experience and the team member experience in the dining environment.

Peter Mollins:

Great. Tremendous growth industry. How has OneDine grown so far? How's the growth been?

Rom Krupp:

We launched in November of 2019.

Peter Mollins:

Oh, wow.

Rom Krupp:

So, you can imagine that we originally presented our technology in September, and we present a future where customers walk in, sit down, tap an NFC chip, get presented with recommendation for items to order, order them. And then, when they're ready pay, we did a presentation September, 2019, and people thought we were kind of out there. And well, we started getting a lot of traction in November, and a lot of major casual dining brands really wanted to experiment with the labor model because we're able to show a 6% to 8% lower labor model to run casual dining.

Well, when COVID hit, we went overnight from being, wow, this is future thinking into, this is the way to survive, in a way. And what we've done to respond to COVID is when we realized dining rooms are closed and our technology is on-premise, we started looking at parking lots and we started thinking every parking spot is really a table. So, how do we bring our technology outside the four wall? And we offered our technology for free for between March and September of 2020 just to help restaurants drive revenue in the parking lot. We've had brands that went from having a couple hundred dollars days to five, six, $7,000 days, just from being able to unlock the parking lot as a dining room.

Peter Mollins:

That's amazing. Maybe just for the benefit of the audience, can you tell us a bit about what contactless actually is? How would you describe contactless and how someone might see that in their day-to-day activity?

Rom Krupp:

Yeah. You hear a lot about touchless and contactless and the thing. I think in the world, touchless is nothing is ever being touched. It happens behind the scene. But in contactless is, I think, the reduction of touch points between multiple people, multiple devices. So, if I can use my own device to place an order or complete a payment without anybody handing a device, without me handing a card, that's contactless. That's removing the contact points. So, that's what OneDine specializes in.

Peter Mollins:

Okay. How do you find that that improves the adoption? Maybe first, from a consumer perspective of order ahead. So, the notion of contactless, does that improve the adoption for consumers?

Rom Krupp:

Well, obviously, COVID forced the issue. So, I think it's hard to tell a true matrix of adoption because COVID made it a requirement. I think a lot of people got used to it. I know people that have never used their phone to make a payment, and now, that's the only way they're paying. So, I think people are getting more and more used to using their phone to do a lot more. Think about it. You order food home using a phone now. You're not going to a desktop. You're not opening your laptop. You go grocery shop, you can use your phone. You go to a gas station, and you can use your phone. You order a shared ride, use your phone.

Rom Krupp:

So, I think adoption of contactless is obviously growing. We've seen when you had to do it, obviously, close to 100%, now as dining rooms reopen, in some states, up to 75%, and in Texas now, 100%, even though I don't know of any restaurant to yet implemented 100%, you are seeing over 50% of customers still choosing to use a contactless experience, even if they don't have to.

Peter Mollins:

Wow. That's amazing. So, people continuing to use that contactless. Do you find that it's also going, on the other side of the equation, where there's not only more loyalty to that payment method, but also, more loyalty to places that use contactless?

Rom Krupp:

Well, definitely loyalty to payment. Because typically, you create a wallet in contactless. So, either you have a preexisting wallet, like the major... Manufacturers create their own wallets. Or you create a wallet for the restaurant, or the technology, or the DSP you're using for food delivery. So, now, once you've created a wallet and you set a default payment, it's rare you're going to really change it, right?

Peter Mollins:

Right.

Rom Krupp:

So, definitely, there's a loyalty to a payment, and sometimes, loyalty to apps that you already have a payment in it. As far as going to places that only carry, I don't think there's enough data yet to know how it's going to look like, post-COVID. It'll be interesting to see. Because before COVID, you couldn't count on one hand how many brands offered at the table, at least, contactless experience.

Well, now, it's everywhere, in a sense. And it'll be interest to see A, how many brands adopt it as a long-term strategy, and so, keep it there. And B, how customers are looking for that. Will they continue looking for that? Will they, given the choice, go back to the old method or a new method? I, personally, believe from the information I'm seeing with our brands, which obviously is anecdotal because our brands are forward-thinking with contactless, that you are seeing increased adoption, and you are seeing brands building strategy around long-term because the impact is not just the contactless or the safety part. The impact is lower labor costs. The impact is faster table turn. The impact is lower credit card fraud. So, as you add all those elements, it's a plus, plus, plus. It's very hard to remove it if you really took it as a strategy.

Peter Mollins:

Right. Let's dive into a little bit more about those other benefits that are out there. So, table turn. Is that because now, a server isn't having to walk out with the machine for swiping, or what's happening there?

Rom Krupp:

Well, think about that song and dance that we're all used to in restaurants. So, the moment you were ready to leave, mentally ready to leave, you can't leave. Right? So, now, you first have to verify with your table, everybody ready to leave? But the second thing is you have to flag down a server. Where is the server? Flag them down. Or give the, hey, check, please. Right? And you do something to alert that you're ready to leave. At that point, some restaurants, a team member carries your list check in their apron, some don't. So then, they have to go to a POS station, produce a receipt.

If they're lucky enough to have more advanced technologies like tablets or mobile device, they'll come with a tablet and try to transact there. And that might be simple. If not, they're going to drop a receipt. At that point, you're going to drop credit cards, but hold on. I asked for a check, but me and my wife want to pay together. The other couple want to pay for themself, but want to split the appetizer. So, the receipt you just gave me or the device you brought can't do that. So, now, I have to go away again, and I have to do separate checks, and I have to bring it back. And then, I may or may not have to give you cards, and you have to go away. And then I have to authorize them, and you have to bring it back.

So, there is a seven-minute song and dance when you're really busy over there on a small party. Before COVID, I kind of laugh. My wife has a group of friends when they go to birthday parties, and it's 16, 20 people. And at the end of the experience, it's always separate checks, but we pay for the birthday person. And she actually times it for me. And the last experience she had right before COVID, it took them 37 minutes to leave the restaurant from the moment they asked the server how they want to pay.

Peter Mollins:

Wow. That's amazing. And it's not a fun experience. You do that and the very last memory that you have of the restaurant that you're at is often not a positive one when you have that check dance.

Rom Krupp:

We studied that data, actually, extensively when we were designing the technology through 2018 and 2019. The pinnacle of the experience, the point where you're the most satisfied is the point when we're ready to leave. It could be a six, it could be an eight, it could be a 10, but that's the highest it's going to be. The longer it takes you to leave the building, the number drops. So, when you think about an experience, if you had an eight, nothing good happens between the time you're ready to leave and you leave to make it a nine, but it can be a seven, or it can be a six. So, definitely. And you see that customers have given up sometimes because look at Venmo as an example, and other Zelle, and all those companies were born on easy way for people to separate their own bills without having to bothered the restaurant.

Rom Krupp:

That's not a good indication. People are saying, "I'm just going to do it on our own because it's too difficult to do business with a place." That's not a good indication. There's nothing positive for restaurants in that long-term because from a data perspective, if I have a party of four, and one person pays, and the other three transfer a point-to-point payment for them, I learned nothing about the other three, but if I can collect payment from all four, I've got four customer data points. I have four baskets. I have a much better understanding of my guest behavior.

Peter Mollins:

Right. Yeah. That's very true. Yeah. It's interesting because we have... At Spreedly, we have a lot of customers that are in the digital goods space. And so, there's a very close proximity between the fulfillment of an order and the payment of the order. And what we see is that when you have that proximity, it's not like where maybe you're on Amazon, you're buying a book, and the book, a physical book, and the physical book takes two days to arrive. And the exciting moment is not necessarily when you put buy, but it's when that book arrives. Whereas for digital goods and restaurants, it seems like it's the same way, that that experience is so much closer to the payments experience. And so, payments becomes extremely important from a total customer experience perspective. And we definitely see that ourselves in the data for goods, like digital goods, where there's immediate turnaround.

Rom Krupp:

Yeah. Data is critical for restaurants. And you would think that restaurants over time have more data, but the reality is they're losing data. Part of it is DSPs, the third-party delivery providers. They're owning the guests' data. And then, people doing split payments outside the four walls. So, while the world, I would say, generates more data, restaurants are actually getting less and less through third parties getting in between them and the client. So, offering things like being able to do contactless, ordering a payment by each guest that's easier, more convenient than using other services directly with the brand itself is unlocking significant amount of data because think about it. We're a party of four. There's four entrees, there's four desserts, there's four alcoholic beverages, but I have no idea how to put them together to know who had what drink with what.

If you're lucky enough to maintain seats, that's great. But even if you do seats and you know seats had one and two, item one and two, you still, if you don't collect the payment, have no trackability, if that person ever comes back. Are they doing the same thing every time? And the value of that data helps menu engineering, marketing store design, your location opening. It's got significant... If you open in the wrong place, it could be a million dollar mistake. So, that data is very valuable for the brands.

Peter Mollins:

Right. No, that's fascinating. Well, great. Well, let's switch gears for a second. Can you tell me a bit about... Payments orchestration is this notion of being able to connect into multiple payment vendors. I understand that OneDine does use that as part of your business. Can you tell me a bit about how you do leverage orchestration for OneDine?

Rom Krupp:

Yeah. It kind of started because of COVID. We were dealing with some malls, and the malls were shut down, and they wanted to activate the parking lots. How do we make a parking lot be a place that the restaurants and the mall can still service their guests? But the challenge became is there was no dedicated parking for every single brand. So, you pull into a spot, and that spot might be serving seven or eight brands. So, how do you allow people to order from all seven or eight? Maybe I want a hamburger from one, and pizza from the other, and a shake from the third, and not have to loop through, choose the brand, choose the item, pay. Choose the brand, choose the item, pay. Choose the brand, choose the item... It becomes very cumbersome. So, we decided to enhance our technology that allows you to combine multiple brands that are not associated with each other into a single shopping experience.

And at checkout, while the guests has a single checkout and a single payment experience, what it's really doing is it's micro charging each brand against their own mid, so every brand gets their money directly. So, a guest experience is easy. I order from three brands in one shopping cart, I hit a payment, and then, it gets three... Let's say three transactions hit me right away for the portion of each one. So, it became so effective that we started spinning off, what we call, a virtual food hall.

How do you take multiple restaurants in a neighborhood and create almost a virtual food hole that people in a neighborhood can order and go pick it up from those restaurants, but they go through a single transaction across? And then, we started doing things like venues, where they have multiple providers. So, you have a hot dog stand, and you've got a popcorn stand, you have a beer stand. How do I order from all in one time and the payment gets distributed? So, it became a pretty popular item. And now, we're talking to a lot of hotel brands that are looking to enhance that around the businesses, the restaurants around their buildings.

Peter Mollins:

Right. Yeah. And you can see as events, concerts, festivals start coming back, you can imagine that that's going to apply here. That model will work here as well.

Rom Krupp:

Yeah. Because the toughest thing about these models is not building the technology to do it as much as how do you do the business relationship? Who collects the money? Who gives who money? It's always a challenge, the flow of money, the declaration of revenue, the accounting adjustments. So, in real time, hitting each individual mid, each individual processor with their portion, you solve all those logistics.

Peter Mollins:

Right. Yeah. That makes sense. And if the term virtual food hall hasn't already caught on, I hope it does because it's a great phrase.

Rom Krupp:

Yeah, no. We're doing a lot in that space. I'm sorry. We're doing a lot in that space, and you'll see a lot of our virtual food hall popping up everywhere.

Peter Mollins:

That's great. Well, I really enjoyed the conversation. Maybe just to wrap up though, obviously, the impact of COVID's been huge on restaurants, on hotels, on event venues. But what do you think is the future? When you put your crystal ball on the table, what do you see coming in the future from a payments perspective, from a contactless perspective?

Rom Krupp:

So, yeah. We're definitely heading into a future where customers and guests are getting used to doing a lot of self-serve. If you think about airports, think about grocery stores, there's a lot of self-serves. And in the QSR, the quick service space and restaurants, we've seen more of that with kiosks and order ahead. Look at Starbucks' adoption of just ordering on the app before you show up. Though you haven't seen any of that really going to traditional casual dining space. I think you'll see a lot more of that. I think it's not necessarily driven by COVID or driven by contactless. It's driven by economics, the challenge with the rising labor costs. We're all aware of conversations around $15 an hour minimum wage. Household income in the last 20 years has only increased about 3% adjusted to inflation, over 20 years. But food costs is up 40% in the same 20 years.

Peter Mollins:

Wow.

Rom Krupp:

So, your wallet is not as big as it used to be, but you have to spend more to eat. And people have given up a lot of things for food in our space. People have given up a lot of things to buy more food from restaurants. I think 2015 was the first year that more money was spent in restaurants than grocery stores. So, definitely, people accepting it. But now, if you're dealing with higher labor, and you can't pass price anymore to the guests, how do you survive? Right. So, brands are going to have to look into technologies like contactless payments and ordering as the survival method. So, I think where COVID did is introduce what we call the 3.0 world of restaurants, which is a lot of more self-service touch points, not necessarily giving up a service.

When you think about restaurants, when you think about service, you sit down at the restaurant, what is service? It's greeting you. It's getting you your drink. It's making sure your drink is never empty. It's cleaning a dirty plate. It's asking if we can get you anything else. It's not writing down your order. It's not taking your card. Those are almost like functional things that have to be accommodated. So, I think they're going away. They will go away. I think there's some, obviously, demographic preference to that. So, it'll be a little bit longer before brands can just say, "It's the only way." But we're definitely going there, and I think we're definitely going to a cashless environment.

Rom Krupp:

And cash in restaurants has never been a good thing. Cash is expensive to bring into the building when most of your transactions are credits. You have to bring cash to the building just to do tip payout, for example. Cash is dirty. Never a good thing to touch cash, and then, food, and the discipline to keep those to constantly in hygiene is not a good thing. So, I think COVID is going to be an accelerant to eliminate cash from the industry. And I know it disproportionately hits different demographics, and there's got to be solutions around it, but it is definitely going to be a big part of our near future.

Peter Mollins:

That's great. Well, this is a the fascinating space, and what you're doing at OneDine is just pretty incredible. So, congratulations on the growth and the success you've had so far and in the future.

Rom Krupp:

Thank you very much.

Peter Mollins:

Absolutely. Well, again, thank you so much, listeners, for joining on another edition of Payments Dialogue. Rom, thank you so much. And we'll see you all on the next edition of Payments Dialogue. So, thanks again.

Rom Krupp:

Thanks for having me.

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