One year ago, restaurant tech supplier Olo launched a new product called Olo Pay. It was designed to cut down on credit card fraud and make payments faster for online guests.
It was a new vertical for Olo, which was focused on online ordering, delivery integration and dispatching. But CEO Noah Glass said it was something the company had been pulled into by restaurants who were asking for more streamlined payments.
So it’s no surprise that a year later, Olo Pay has seen strong adoption by restaurants. The system processed $250 million in transactions in its first year, becoming the fastest of the company’s 14 products to hit $1 million in monthly recurring revenue.
In the fourth quarter alone, more than half a dozen brands, including Bravo Brio Restaurant Group, Eggs Up Grill, TGI Fridays, MrBeast Burger and Captain D’s, added Olo Pay, Glass said on an earnings call Thursday.
The system’s ability to reduce fraud and boost payment authorizations has exceeded Olo’s expectations. At TGI Fridays, for instance, fraud is down 1% and authorization rates are up 5%, Glass said.
But Olo Pay’s biggest win has been its one-click checkout feature known as Borderless, which allows customers to log in and order simply by entering their phone number. There’s no need to remember a username or password, and credit card information is saved, so they don’t have to re-enter it each time.
Because it’s easier to log in, more transactions are being linked to customers. Before Borderless, about 30% of Olo transactions were from logged-in customers, and the rest were anonymous. Borderless has reversed those numbers.
“With borderless, over 70% of transactions tie back to a guest account,” Glass said in an interview last week. “That has been the biggest unlock.”
It’s a big deal for restaurants, which use that customer data to create more personalized offers and measure their impact. The more data they have, the better.
Plus, after a customer uses Borderless once, they can use it at any restaurant in the Olo Pay network without creating a new account. Glass said this could make Olo Pay particularly useful for multi-brand restaurant companies like Inspire Brands and Yum Brands.
“What’s potentially interesting down the line is portfolios of brands being able to see across their portfolio because they have that unified guest view,” he said.
Earlier this month, Olo made Borderless available to all of its 600 restaurant brands. And interest in the product remains strong.
“We have seen an excitement to move over to Olo Pay and use that as a way of making a lower-friction guest experience and also have all the other benefits for the operator of a lower cost of ownership, higher authorization rates, lower fraud rates, etc.,” Glass told investors last week, according to a transcript on financial services site Sentieo.
It was one of the highlights of another strong top-line quarter for New York-based Olo, which offers online ordering, integrations and other restaurant software. For the fourth quarter ended Dec. 31, total revenue increased 25% year over year to $49.8 million, and its number of active locations rose 10% to 87,000. But its net loss widened to $8.2 million compared to $2.1 million a year ago.