Loyalty startup Blackbird Labs is expanding into payments.
The company founded by Resy and Eater co-founder Ben Leventhal on Tuesday announced the launch of Blackbird Pay, a payments network designed to lower costs for restaurants and improve the experience for customers.
With Blackbird Pay, restaurants that are using Blackbird to track and reward members will also be able to use the software to accept credit and debit card payments as well as Blackbird’s proprietary digital currency, $FLY.
They will pay a flat fee of 2% per transaction, which is on the low end of what credit card companies typically charge.
Customers, meanwhile, will be able to pay their bill within the app at any point during their meal. They can also split the bill with the rest of their party.
Blackbird has taken a unique approach to restaurant loyalty with a single app that customers can use to earn points and rewards at dozens of local restaurants. On top of that, it has layered its own blockchain and currency, which are part of a long-term plan to create a “coalition loyalty platform” across multiple restaurants. Blackbird is currently available in New York City, Los Angeles, San Francisco, Atlanta, Chicago and Charleston, South Carolina.
When a customer arrives at a participating restaurant, they check in by tapping their phone to a Blackbird “puck” outfitted with a near-field communication chip. Check-ins earn perks such as free drinks, exclusive items and the ability to message the restaurant, as well as $FLY. For restaurants with Blackbird Pay, the phone tap also starts a check for that customer.
Behind the scenes, Blackbird allows the restaurant to view customer profiles that show a person’s expected lifetime value and dining history, which the operation can use to tailor rewards and generally provide them with a better experience.
The idea is to give restaurants tools to boost customer frequency and help their business.
Payments have always been part of the plan for Blackbird, Leventhal said in an interview. And while Blackbird Pay is not intended to compete with or replace the major payment networks, the company’s hope is that it will evolve over time to have a real impact on restaurants’ unit economics nonetheless.
“We strongly believe we can help restaurants process payments and funds in a more efficient and cost-effective way,” Leventhal said.
For now, keeping its fee low will mean Blackbird will lose money on some transactions. But long-term, the company likes what payments look like for the business. Expanded use of $FLY could be key to that equation. As a digital currency, it’s not subject to the same processing fees as credit cards.
“We certainly hope over time that consumers utilize $FLY more and more,” Leventhal said.
Blackbird has grown rapidly behind a $24 million investment last year led by high-profile firms Andreesen Horowitz and Amex Ventures. Since then, Blackbird’s restaurant population has increased tenfold, and app downloads have grown even faster, Leventhal said.
“We’ve made exciting progress,” he said. But, “as with any startup, we have a lot of work to do.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.