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Tabbedout: A Mobile Payment App for Restaurants and Bars

Tech-savvy: Chris Dilla of Bocktown Beer and Grill has embraced Tabbedout.
Tech-savvy: Chris Dilla of Bocktown Beer and Grill has embraced Tabbedout.
Photos© David Johnson

Bocktown Beer and Grill's patrons have grown accustomed to change. The Pittsburgh full-service restaurant's signature list of American craft beers rotates on a daily basis, exposing customers to a procession of new brews and guaranteeing Bocktown--and its clientele--doesn't fall into a rut.

"We call ourselves 'The place where beer meets grill,'" says Chris Dilla, Bocktown's founder and owner. "Other places don't seem to have an interest in serving good beer, but we pull it all together. Our beers change every day, so our customers have to be the kind of people who want to explore something new."

Bocktown's progressive attitude extends beyond its menu. Dilla is the epitome of the tech-savvy entrepreneur, rolling out a mobile-optimized version of the Bocktown website, actively leveraging Facebook, Twitter and foursquare, and even adding a scannable QR bar code to Bocktown's take-home beer growler label. Now Bocktown is introducing Tabbedout, a mobile payment app that lets consumers open a bar tab, view their bill in real time and pay at their discretion, all via iPhone or Android smartphone.

"We can get very busy--we get a lot of corporate guys in here for lunch, and they're always in a hurry," Dilla says. "Now when it's time to go, you can pay up and get out of here whenever you like. You can even pay your tab before you get your food."

Here's how it works: After downloading the free Tabbedout app, consumers enter their credit card information (stored on the device and secured with 256-bit AES encryption), select "nearby locations" to identify Tabbedout merchant partners and tap the "open a tab" option on arrival. Tabbedout then generates a unique five-digit code that patrons show to their server. The server will see a button matching the code within the bar's point-of-sale system, connecting the bill directly to the guest's smartphone. Patrons order as usual, and close out the check via Tabbedout when they're ready. There's no more handing off a credit card to waitstaff, or forgetting the card behind the bar.

350 merchants in 100 cities are using tabbedout.
350 merchants in 100 cities are using tabbedout.

Austin, Texas-based Tabbedout is the brainchild of co-founder and CEO Rick Orr, who previously co-founded WholeSecurity, a security software firm acquired by Symantec in 2005. The idea behind the app first came to Orr eight years ago while he waited 55 excruciating minutes to close out a restaurant bill. But it wasn't until smartphones entered the mainstream that he translated his irritation into innovation. "Like today's physical wallet, your phone is always on your person," Orr says.

But Tabbedout doesn't only benefit harried patrons--according to Orr, the solution reduces friction for merchants and their staffers as well, because it eliminates time-consuming payment-processing chores and frees them up to focus on other tasks. "It takes four times longer to close a tab than it does to pour a drink," Orr says. "We help you serve more drinks and clear more tables during peak hours."

Orr designed Tabbedout to integrate seamlessly and painlessly with existing POS technologies, requiring no additional hardware or new financial accounts. (The installation process requires about 20 minutes in all.) Because the app submits all payment information to the POS upfront, merchants are protected from dine-and-dash schemes, dead phone batteries and other potential wrinkles, and they can manually close a tab within the POS at any time. Tabbedout guarantees servers and bartenders a default tip amount (determined by the venue management) and offers patrons social media sharing, e-mail receipts and even a click-to-call option for local taxi companies in the event happy hour extends into the wee small hours.

As of fall 2011, about 350 merchants in 100 U.S. cities had added Tabbedout to their menu. Costs vary from business to business, based on venue size, location and contract terms. Orr plans to expand the service in the months ahead, adding geo-targeted offers, loyalty programs and other mobile marketing efforts. "Tabbedout allows merchants to interact with their consumers in a more meaningful way," he says. "Mobile payments are just a start."

Dilla raises her glass to Tabbedout. "The servers love it," she says. "One of my servers said to me, 'It's great--now I don't have to deal with paperwork, and I can spend more time engaging with the customers.' There's a lot of attractiveness to this method. And everybody's already on their phones anyway. It's just the way the world's going."

Chicago-based writer Jason Ankeny is the executive editor of Fiercemobile content, a daily electronic newsletter dedicated to mobile media, applications and marketing.

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This article was originally published in the December 2011 print edition of Entrepreneur with the headline: Drinking Made Easier.

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