Californian startup Downtown is offering a mobile payment solution for local businesses, enabling restaurant and cafe customers to order and pay for a meal with their smartphone.
The idea of using the new information and communication technologies to reinvent the customer experience at retail businesses’ point of sale seems to be receiving a lot of attention these days. A range of tools are available, including geolocation, QR codes, Augmented Reality and sensor beacons. Now Palo Alto-based startup Downtown has come up with a mobile payments solution for local businesses that makes use of connected beacons. The company’s goal is to make mobile payments accessible and easy to use, both for customers and for the mainly bricks-and-mortar local businesses. It was set up a year ago by three partners – Phil Bückendorf, Max Noelle and Xavier de Ryckel – who have pooled their engineering and computing skills to develop the iBeacon technology needed for their system. Phil Bückendorf explains that, after looking at existing mobile payments solutions, they came to the conclusion that it was currently more difficult to use them to pay for purchases at small businesses in the neighbourhood than to have a new computer delivered to their homes.
Beacon plus mobile phone
The Downtown idea is to decentralise the point of sale by putting a POS into the hands of each customer at every Downtown partner business. The service comprises an app on your phone plus a beacon installed at every table in a restaurant or café. When customers go to a place that is equipped with the right beacons, they can look at the menu, order directly from their smartphone and also settle the bill via the same app, provided they have first registered their bank account details. The beacon tells the waiter the table number so that s/he can take the food to the right table.
For the business owner no complex installation procedure is required. Downtown provides the beacons, which were designed in conjunction with Estimote, a startup specialising in developing this type of sensor, and has created the app, which enables staff to see in real time which orders are coming in from which table. The startup takes a commission of 3 - 5% on every purchase made via the app.
Mobile payments plus extra functionality for local business
Today there are seven businesses using the Downtown technology at Palo Alto, Menlo Park and Stanford. The first to install the system was Coupa Café at Palo Alto, a very popular meeting spot for ICT players in Silicon Valley. Phil Bückendorf explains that he is currently prioritising partnerships with small businesses in order to maintain good close relationships and obtain regular feedback on how the service is being used. “Solutions on offer today in the retail business which use beacons don’t really add value to the customer experience. Merchants offer coupons and promotions, but this doesn’t fundamentally change the purchasing experience,” argues the Downtown CEO. His company’s combination of beacon technology and mobile payments could prove to be vital functionality for local traders. After raising $300,000 in its seed funding round, Downtown took on four engineers to develop the solution and expand it to different types of businesses.