Startups to watch: App8 aims to simplify restaurant payments

restaurant
Stock image, for illustrative purposes only.

There was something about sitting down in a restaurant that always nagged at Elias Hage.

The food could be delicious, the atmosphere could be lively and wait staff could be as courteous as possible, but after finishing his meal on a busy Friday night, he often found himself waiting at his table for 15 minutes just to pay his bill and leave. All the while, hungry patrons eager to take his spot grew restless in line.

Eventually, Hage realized he wasn’t just waiting at a table – he was sitting at a crucial pain point for both diners and restaurateurs alike. The longer he waited, the less satisfied he’d be with the experience and the fewer patrons that restaurant could serve on any given night.

“That was kind of where I started to peel the onion a little bit,” Hage says. “And I said, well, ‘Does it have to be that way?’”

He racked his brain for months wondering why no one had streamlined the checkout process at sit-down restaurants until he came up with his own solution.

He was done waiting.

In 2017, the Dubai-born accountant left his job on a partner track at Ernst & Young where he had spent the majority of his career. After interviewing some players in the service industry to confirm his hunch, Hage co-founded App8, a platform for restaurants to allow customers to track and settle their bills directly from their smartphones without needing to check out with wait staff.

The problem facing the accountant-by-trade was that he had no technical experience in app design to bring his idea to life. It was a chance encounter in an Ottawa grocery store with a friend from kindergarten – kindergarten back in Abu Dhabi, mind you – that led him to Hani Jabbour, the director of engineering services at CENX and husband of Hage’s childhood pal.

Hage convinced Jabbour to join him as chief technical officer. The two then recruited Chadi Saleh, who cut his teeth in Ottawa’s restaurant industry at Fraser Cafe and Fairouz.

App8 now has a few thousand downloads, 2,000 of which Hage says represent active users. The app is targeting the Ottawa market to start, and has an initial restaurant roster that includes Clocktower Brew Pub and taco joint El Camino.

The company earns revenues from monthly fees paid by the restaurants on the app, but Hage says the first 50 locations to sign up will have those fees waived. What’s more important in the early goings is building up a critical mass of dining options so that users will find enough diversity to use the app on a regular basis.

Monthly fees are just the beginning, though, Hage says. He explains that restaurants will find more value in the company’s analytics, which can provide insights into customer behaviour generated from each transaction made through the app. The relationship created between the client and its patrons can easily bridge into a loyalty program as well, Hage says, to generate repeat visits.

One of the standout features of App8 is the ease of adoption for restaurants, which don’t require any hardware installation or alterations of any kind to their existing point-of-sale systems. The startup isn’t trying to overhaul what’s already working for restaurants, Hage says, and a pain-free installation with easy staff training is ideal in an industry with regular turnover.

“When a restaurant wants to adopt App8, it's as easy as filling out an online form to set up their banking information – it takes 10 minutes.”

Competition

The University of Ottawa graduate acknowledges that App8 isn’t the only startup trying to introduce mobile payments to the service industry. Hage contrasts his solution to Ritual, which has a few years headstart on his firm, by noting that Ritual focuses on streamlining the ordering and takeout processes in quick-service restaurants.

App8, on the other hand, targets sit-down restaurants and the club scene, where patrons often start a tab by handing over their credit cards. A smartphone-based solution can eliminate a few annoying obstacles in these situations, he says.

Some industry players that Hage talked to in his initial surveys were sometimes skeptical of a checkout process that bypasses the wait staff – what about that last chance to push for a tip? He responded to that charge by saying he’s not trying to get rid of the farewell, it just gets moved up a little earlier in the process. Once a waiter has asked the party whether they want food or dessert, they can make their last impression then, rather than risk ruining a solid tip with a slow cash-out.

Now that App8 has been up and running for a few months, Hage adds that the tip-outs through App8 are actually around 18 per cent – above the industry average.

The other complaint Hage hears is that App8 will remove the human connection from dining out. Quite the opposite, he argues.

“Our vision for App8 is to actually create a more human experience using technology.”

He imagines a future in which a customer can walk in off the street with their smartphone in pocket already alerting the restaurant’s system that they’ve arrived. Then that patron can just say hello to the wait staff, give their name and order and go about the social interaction without having to worry about paying or eating on any particular time frame.

That level of connectivity is still a bit futuristic, Hage admits, but if App8’s early users are any indication, there’s an appetite for that kind of dining experience.