Empowering small restaurants with payments orchestration – interview with Craver

Could you give us a quick overview and the needs that your organisation helps address?

Craver is a mobile platform specifically focused on the restaurant industry and on their digital presence in the market. Our main product is our mobile platform, although we have a few other product lines to help restaurants using online ordering.

We started about four years ago, wanting to bring to smaller clients the same level of technology when it comes to online ordering and delivery that national chain or multinational chains are using (such as Starbucks). Smaller businesses – either single-location or two to twenty-location restaurants – didn't have access to that level of technology because it was very expensive.

Moreover, it was out of the realm of possibility for them to be able to invest money into this technology, because they were working on a very low margin. We aimed to democratise the tech scene in such a way that they could start competing with big chains. They were already providing a good service in terms of the quality of food and the restaurant experience – that's why local people go to the local restaurants.

An ongoing trend that is visible on the market right now though is that local restaurants are losing the technology war to food ordering/food delivery services. This story has been played over many times in recent years. In order to stay relevant, small businesses end up giving a big portion of their earnings to online ordering services. 

Apart from the commission itself, the businesses are also losing actual access to the customers’ data and – ultimately – direct access to the customer. Craver fills in that gap and brings small restaurants and restaurant chains the level of technology they need to stay competitive and bring that convenience to their customers, while allowing them to focus on what they do well, which is the quality of service itself.

Getting a little more particular with the specificities of this vertical, how did the payments paradigm evolve in the food and restaurant industry?

Payment processing, in this industry, has a pre- and post-COVID-19 set of characteristics in its evolution. Before the pandemic, what people wanted was the convenience of ordering. What we needed to consider, from a technological perspective, in this paradigm, were all the different parts of ordering: selecting your food, choosing between pick-up or delivery, having the possibility to pay from a mobile phone without having to enter a credit card, or using Apple Pay or some other e-wallet service to remember your card data. All this plays to that convenience of ordering and defines the customer experience. Consequently, we need to streamline the payments process. 

At this point, the process becomes even more sophisticated: details such as tipping functionality. It is imperative to establish what is the implication of tipping into the way the payment is processed, when exactly will it be captured and authorised, and for what amount. 

After the COVID-19 pandemic started, there were more concerned surrounding restaurants keeping their customers and staff healthy. It became apparent that there was an imperative need for payments to move to a contactless and mobile environment. 

How does Carver use payments orchestration? How does it fit in this picture?

There are multiple things that we are trying to solve for restaurants and one very important part of that is the payments process. The most important question we are asking ourselves is whether we are going to add to or reduce from the workload of the restaurant team. Payments orchestration plays exactly to that end.

We don't want restaurant owners to go and open a new bank account or for them to need a new merchant account just because they want to have a new mobile app. We had to understand how to tie-in our service into what they were using at that time, to not only bring the technology to them, but also make it easy for them to adopt it. Payments orchestration from Spreedly plays an important role here, along with a lot of other policy integrations that we had to do to make sure that we make the whole process would be as convenient as possible for the restaurant staff when they are using our platform.

What could you name as a unique differentiator of payments orchestration for small restaurants trying to compete in the digital space?

The most important thing is the ease of use for the end-customer, but also the fact that the process is made straightforward for the staff and the owners, so that, essentially, they are not put in a position to have to change the way they do business.

Without payments orchestration, you are adding work to the already busy schedule of a restaurant. This work translates into costs – labor cost. Pre-COVID-19, labor costs were around 40% or the total registered by a restaurant. If you are adding to that, you're contributing to the biggest cost item, which is not the food, but to people they have to hire to run their business.

Considering that all the progress you made so far with your target base, how do you see this process evolving and this trend evolving?

One of the currents shifts in the right direction is making payments more secure when it's happening remotely. As more and more payments are processed with card-not-present, you need to be able to bring in the level of strong authentication, like the SCA requirements in Europe, in order to make sure that the risk of processing payments remotely is lower. And when the risk becomes lower, the costs are going to be going to be lower as well.

Secondly, it is necessary to make payments more streamlined for the end customer, which is what payments orchestration is doing. It plays into the overall goal of convenience of use. We had to make payments processing more secure, streamlined, and more accessible to everyone without having to do implement different strenuous processes before reaping any benefits.

On the technology side, people are starting to use each piece of tech for the purpose that it was built for. We ‘bad mouth’ food delivery services for stealing the restaurant customers, but they bring the value of simplicity and convenience. We think that the industry will demand the right tools to compete with these services.

So you can still be on the food delivery apps as a means to access the new customers promised and then it's your job as a restaurant owner to try to convert them. To use the delivery apps as a true marketing tool. Ultimately, you will, however, need to employ your own means as well, whether it be your own online ordering app or a loyalty programme.

We are giving restaurants a way to compete that they didn't have before.

Craver has clients in 30 states in the US, seven provinces in Canada, along with some clients in Australia. What are some lessons you’ve learned from the field, considering the geographical spread of your customers?

First of all, we did notice that some markets are more conservative than the others. We registered lower adoption rates in the more conservative markets pre-COVID-19. After the pandemic and the lockdowns started, those conservative markets were the ones adopting technology. This is something that we observed in different areas in Canada and the US.

Another learning was the fact that technology adoption is not really related to how dense the area is. Clients were thinking that if they run a single location outside a city area, people are not going to use the app. And we learned that success is actually based on how well-branded and well-presented a restaurant is.

We found that the average person may not download the app for a sushi shop around the corner, but they will download the app for the café that they feel they belong to. This way, a simple app can contribute to a sense of community. It doesn't matter how small that location is or how limited their menu is, people crave most the sense of belonging and community. And that has definitely been even stronger during the pandemic, with people being restricted.

A lot of people were buying gift cards from places that they were not going to visit more than once a month – they just wanted to support local business. This behaviour was common across all our customers.

In 2020, there weren’t that many ways in which people could form or keep a community. They were seeing their local businesses struggling because of the pandemic and they really wanted to lend a helping hand.

When it comes to payments, do you have recommendations to offer to leadership teams when thinking about their payments strategies?

In terms of payments, we learned that a lot of businesses focused on the percentage – on how much they were paying, what their rates were. They focused on the numbers because this is what they understand and what has been the industry standard.

Nevertheless, we found that the total cost of ownership proves to be more important, this includes all the manual work that you need to put into your accounting, into payments processing and so on. The best advice I can offer to any type of business in terms of payments processing is the following: of course, rates are important, but consider the total cost to the business when it comes to payments, when deciding on a solution or another. Because sometimes the lowest rate is not really the lowest cost.

About Craver

Craver is one of the fastest growing technology startups in the restaurant industry. Craver has developed a leading mobile app platform for the restaurant industry which is helping hundreds of local restaurants to engage their customers with a mobile app that is branded for their restaurant. With best-in-class features such as mobile ordering, payment, rewards and loyalty and more, Craver helps restaurants retain and grow their loyal customer base. Craver platform democratizes technology so that it is accessible to local businesses, to power the technology needs of small businesses across the globe.