Online ordering provider Olo is getting into restaurant payment.
It unveiled a new product Wednesday called Olo Pay, a platform intended to ease the payment process for both restaurants and customers.
Olo has historically integrated with outside payment processors. But those services aren’t necessarily built for restaurants or for digital payments, CEO Noah Glass said, and often result in fraud and other headaches.https://b45338e613236c2535f43671e7b387f3.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
“[Pay] is something that we’re being pulled into, frankly, by Olo restaurant brands saying, ‘I need to have a more streamlined payment solution than I have today,’” Glass said. “There’s tons of friction in the way that payments work in restaurant on-demand commerce today.”
The product’s restaurant-centric design, vertical integration and fraud detection tools are designed to address those demands. But perhaps the most intriguing feature is what the company called “borderless payment,” which will allow customers to pay with one click at any restaurant in the Olo Pay network.
With more than 500 brands and 79,000 restaurants now using Olo, Glass said the company has reached the scale necessary to form a legitimate payment network.
The upside for restaurants would be the ability to offer customers a better digital experience and convert more transactions. Olo Pay will store customers’ credit card information so they will no longer have to log in, enter a password or create an account in order to pay at hundreds of restaurant brands.
“That is a huge unlock. And it’s something that enables the restaurants to make their direct digital ordering program more convenient than restaurant delivery marketplace experiences,” Glass said.
The company is still in the early days of selling Olo Pay to restaurants, and the borderless feature won’t be available until later this year. But Glass estimated the product’s total addressable market to be $9 billion. It will integrate with Olo’s other products, which include online ordering, delivery integration and marketing tools.
Also on Wednesday, Olo announced that it was acquiring Omnivore, a company that helps restaurants integrate various technology services into their POS systems. The company is backed by Chris Sullivan, the co-founder and former CEO of Outback Steakhouse.
Through Omnivore’s library of apps, Olo will be able to connect restaurants to more technology specifically for the on-premise dining experience, like the ability for customers to open a running digital tab.
Omnivore has partnerships with more than 100 tech suppliers, which will increase the number of integrations Olo offers by more than 50%. Those partnerships mean restaurants can start using new apps without the heavy lifting typically required to integrate outside technologies. It will also allow them to make better use of data from their various apps.
“It’s … really staying true to that philosophy of being an open platform and an open ecosystem in a way that benefits restaurant brands, our customers and the industry to create the most flexible stack that they choose from the best-in-class technology partners out there,” Glass said.
Terms of the deal were not disclosed.
The two announcements came in conjunction with Olo’s earnings report for the fourth quarter of 2021