Union Software looks to solve the payment problems

history. Before we talk about what you guys are doing on the on the union side.

are doing. How are you guys trying to solve something that you were struggling with? In your world?

competitive set. But when you really looked at how high transactions locations evolved, they were all old server based solutions had multi many terminals around a an antiquated server based solution. And the rise of a lot of cloud based solutions just weren't we architected with the needs of high transaction volumes. And so as a result, we really focus on what was the best things about

server based systems. But the best things about cloud based systems in terms of how to architect a platform for really high transaction needs, where it's up all the time, and never goes down, offline modes always there. So the benefits of of a lot of the server based solutions, which really tried to architect to bring into a cloud based solution, so that you got the benefit of both.

sector. And I know that the longtime listeners listen, and you talked about kind of what I what I like to lovingly call the legacy POS providers that are out there that you know, and again, we're not going to throw up brand names, but talk to me a little bit about kind of, because they're really stable, they're really stable, and they were but they also are clunky, and they're hard to integrate with and they're hard to manage. And when they do go down, they

go down in a blaze of glory. And they're, you know, and I'm assuming based on your experience, you've had some of that in the past with some of the legacy systems that have been out there. Talk a little bit about kind of just even as a bar owner, what you've heard what you've seen from the operators that you work with, as it relates to that, because you do get those those, I'm just gonna only work on you know, let's use a brand name that's

publicly traded. Well, I'm gonna we're only work on Aloha, because I love Aloha. And, you know, don't try and mess with me. But to your point, as an owner, you can't do the things you needed to do it crashes, that, you know, you can't serve as many drinks. And again, I'm not picking on Aloha, per se. But let's talk a little bit about what is that architecture that you see for those that are less familiar with the inner workings of that, that might be listening to the show?

transaction counts. It's not a question of when your internet goes out, it's how often and how many TVs you got hanging on there and how many guests you have walking around using your public Wi Fi that really bogged down the network. And as a result, create a lot of latency between point of sale terminals in a big busy bar being able to communicate with one another. That's the benefit of legacy or

server based solutions. They provide that instantaneous speed, where tabs or checks replicate, amongst other point of sale terminals in a millisecond. A lot of the cloud based solutions don't do that, because they're so reliant again, on the internet connectivity speeds, and whether it's up or down.

everybody's on the network. And, you know, all of Austin, you know, the the city blows up, you know, you get another half a million people in the city for the week, I promise you that the pipes are getting clogged up. And so And because there's so many people, everybody wants to go out and have a drink, and go out and have some food. So talk to us a little bit about kind of

your experience. And as you've done your market research in that cloud base, you got five deep at the bar, you need to be able to ring up drinks as fast as you can. What did you guys experience in the cloud side?

kind of situation. So our architecture was really all about trying to have peer to peer replication on a local level. Still, all the benefits of cloud, always up to date, never gives them those type of things that are present in a local environment, but also the benefits of, you know, backups. You know, just not having the Reliance solely of you know, what happens when my ethernet jack goes out? Yep. That's where to put that.

That's I guess, unique and different that you might not find and either those server based or those cloud based solutions, because clearly, you were trying to scratch an itch. And that's one of my favorite types of shows, as those people are like, I have experienced this. And I'm smart enough and I have enough money, I'm gonna go figure it out. And it sounds like that's kind of exactly what you're doing.

in the power of my palm. They've worked the the early visions we had about our company, which is name union, which was really the marriage of consumers brands and the venues they enjoy, let's bring them all together and a great experience where the POS is always up and never goes down. You can have incredible guest experiences with consumers, using their phone, to

engage in commerce. And when you think about the US, in particular, and this is our original vision a long time ago, was that experience is going to take over, it'll be a slow adoption curve in the US. And for right reasons, a lot of times, it's like, Hey, I still, I still love the old. So we tried to build a platform, add the reliability old systems, as I mentioned, never relied on if the server goes down, but also the benefit of allowing guests to really drive their own

experiences. And we talked a lot and I talk a lot to the even the places that I that I'm involved with, about why do we want to continue to put a server in the middle of a guest transaction. On average, it takes about seven minutes in traditional hospitality for a server come up

and take your drink across. We are in 1000s of locations in 35 states on average is over seven minutes for our guests to a server to come over and and take a guess first order for me in terms of that experience not only as a consumer, but as an owner. You're like why do I want to without anybody wanting to order. And in fact, let's develop a platform and a solution for consumers to have a consumer or guests lead experience in hospitality.

Moreover, on the on the back end, why do you ever want to put even worse than slowing down the ordering process which a lot of the menus that we still talk to him about I talked to him, I was like, Okay, if you really want to have that personal experience of like, Jeremy, it's great to see you today. Let me tell you about our specials. If you still want to hold on to that old mindset, that's fine. We'll allow you to have a platform that least guests can pay when

they're repeated. Yeah, many times, we all been sitting there where you're waiting 20 minutes to get your check. And by that time, you're just angry. Yeah. And the tips, the two biggest determinants of tips, how long does it take for somebody to come up and take my order? And how long does it take to get my check. And when you're causing a server, infused experience, in in the middle of what your consumer or your guests really want to do? For us? It was just

like, that's just maddening. So why don't we allow a platform that allows consumers to experience commerce the way they want to when they want to, and allow servers to really be an experience where like, I'm here to give you a great hospitality experience. Nothing really good happens that let me take your order, or when was the last time you're like, oh, man, that little smiley face on the check really made me bad. Like, that's

the part where so. So we tried to build again, a highly high reliability system for high transaction counts, but allowed venues and owners and servers to adopt technology at their pace.

have a really bad meal. And that you know, but oftentimes, even as a server, you can't control that you can't control how fast the cook is making it how fast the bartenders making the drink. But you can control how quickly you get to the table, and how quickly you make sure that they get out I had a very, I mean, I had an example yesterday I was I took a potential client out for lunch yesterday, had a fantastic meal server was awesome. Talking about the specials, he was

great. He even had a tablet in his hand to take the order. She took a table side. So it got into the kitchen, the appetizers got in fast. But then when we went to leave, I asked for the check. And it might have been 15 minutes, and it was this restaurant people. And they're like, and I was with restaurant people. And they're like I said, Well, unfortunately, and I happen to be at their brand and looking to sell them technologies. Well, unfortunately, last time I was at your brand, I had the same

exact same exact thing. And they're like No, tell me where tell me what date and I'm like, I'm not going there. But but in general to your point it can make or break a dining experience, especially if you have somewhere to be or something to do.

they want. And I describe it I described it to to one of my partners the other day, I said it's like you put something in your Amazon shopping cart. And then you have to wait seven minutes for somebody to come over and say okay, we'll process your order now. And that's literally what's happening when you have when you stick a server in the middle of a guest wanting

to order. The other side is the same thing on payment, which is what you just described, why would you ever slow down your guests actually wanting to give you the money at the end? That's the part that's just kind of mind boggling. That part of it. The other part I think that technology and owners out there should think about is the revenue associated with actually taking a card. And, and we we've

boiled it down pretty simply. If you think about just just think about I started tab at the bar, take your card, you dip it, they hand it back to you, you may come back later and sign it or they haven't put the 20% tip if you want to walk the tab. If you ever like time that if you time it and we have, it's about a minute to dip it. If they sign it, then enter the tip at the end of the night. It takes about

a minute. You go ask a bartender at a mixologist place how many drinks can you make an intimate? How many have perfect old fashions can you make in a minute? The average they'll say two. Okay, cool. You can make two drinks a minute takes you a minute to handle a card. Instead you could make two more drinks. Let's say your average drink is 10 bucks. 20 bucks a minute is being lost by you taking cards, putting a server or a bartender in the middle of taking money.

And it's not even the slowing down your guests satisfaction. It's actually the law revenue associated with, hey, every time I take a card has 20 bucks of lost revenue. If I did 20 bucks times every minute towards every bartender, think about the lost revenue. And nobody really talks about that. Yeah, I talked to our, you know, my interests and owners all the time about that's the real loss, do not say cards anymore. Let guests pay when they want and make 20 bucks for a minute,

was just 18%. That's it. That's huge, to your exact point, on the last revenue in the last guest expectations. What do you what do you say, Alex, to those that, that combat the front side of the transaction? So you'll have the the old time restaurant tours and say, No, it's not seven minutes? I've got better staff? I manage them better,

you're wrong. Yeah, you know, we need to be able to talk to him about the specials, we need to be able to coach them because we don't want them to put barbecue sauce, and regular spaghetti sauce on, you know, our marinara sauce on my pizza, because it's not going to taste the way that I want it to. What do you say to

those brands? Or you get the I was just talking to my neighbor, just yesterday, she she was talking about going out to a restaurant and she went to the bar and she had an interaction with the bartender, what should I drink? I kind of like these kinds of drinks. What do you say to those that would say that that part of the hospitality is experience is that there are people that are just going to eat McDonald's and kiosks to McDonald's and online order, it

makes sense. Because I know what I'm getting McDonald's, they probably aren't going to have something else Or else have seen it on some Facebook ad or Instagram ad that says the McRib is back. And I'm going there specifically for that. But almost every time I go to McDonald's, I get the same thing. Every time I go to Burger King, I get the same thing every time I get to talk, you know, and at the same time I'm discovering and how do you help with the discovery on a digital platform first?

like. But I think over time, if you really look at the consumer analytics here, there are certain hospitality locations, I want to go and experience that I you know, fine dining, I think is not a place I want to get in and out of, I'm there for the experience, I'm there to have that. When I'm going to a sports bar to watch the Longhorns play, I know what I'm ordering. I'm not I'm not necessarily going there to have this incredible in

depth experience. And when you think about least where, where I've invested and where we try to, we built our platform for it's really high transaction places, turns, we're 50 people deep in a bar, big sports bar, you're not necessarily there for for that guest experience. But our platform allows all of that if you want to have a server let experience and a guest payment experience awesome. One of our new products that we just introduced is basically putting our POS software on any iPhone.

And now with the advent of great things like tap to pay, or you know, scan a QR code to start your tab using Apple Pay or Google page 40% of people would rather pay through Apple Pay or Google Pay than actually using a physical card. Great. We have a

platform that does that. But you know in one of our new releases, because I realized that maybe not buddies as advanced thinking as I am, which is like why would you want to put a server in the middle of any experience of person wanting to order buy your product and pay you for your product, but if you do okay, what are the least amount of friction points that we can put

in that and that experience. So we have just now released a POS on an iPhone, bring any iPhone, buy your own iPhone, go get one that's three years old Amazon refurbished, and the benefit now in most mostly in the handheld world. The products ours included were pretty poor. They rely on card readers. The batteries get eaten up most of

the time. Regardless of platform you want to use it as a Frisbee after a couple of hours because the thing gets too far away from the Wi Fi and whatever any of us that are in the restaurant business understand that

Pay. So we offer those the platform solutions as well. I'll copy out the whole thing saying I still think that's the horse and buggy whip business.

for themselves. And they came from a brand that guests were in a in a horse and buggy environment servers, they had some operational challenges related to the amount that

guests modified the product. And so now you're 50 deep at the bar, and you've got the old fashioned at the bar, you know was it poured with this kind of bourbon was poured with that kind of bourbon and, and all of the logistics management of modifying orders, they went from what used to be about 15% of the food orders got modified to 80 plus percent of the food quarters got modified, because the guests could go create their own experience, it creates a different operational challenge.

And I want to talk a little bit more about some other operational challenges that might also be there that we've experienced, but I'd love some help walking through how people need to evaluate it. Because for 100 years, we've been doing the horse and buggy. We're going to now allow guests to do this. How do you how do you allow the customizability? But you also need to manage it operationally to ensure you deliver the guest experience that you're looking for.

server about that. But if you really look at what most consumers vast majority 90, the high 90s. In terms of percentile, I want my old fashion this way, this way, this way. And there's probably three or four different models you put on it, our system was really built around kind of nested modifiers, knowing okay, if I order a vodka martini up, here's the natural mods that are going to be next to it. And so you don't have to go search and scroll pages and pages to for

guests to be able to do that. It just smartly starts knowing the mods that you have her, one of the things we did in our platform was once we saw you built your drink, the ability to order it again. And the next time you came in, if you had a digital experience, that's the first thing that shows up there. It's like are you gonna be Jeremy gonna be having the vodka martini up with your cocktail onions? Awesome. Yep. Yeah. And as

I was. And remember my payment, and the payment experience was infinitely better than it would have been had, I had to wait around for the server and give him my card and all of that I was like, you know, even for me in this space, I tried it the first time, quite frankly, to see if the damn thing worked. The second time, I tried it. And the third time I've tried it, it created a better guest

experience for me. So to do that, both the ordering customization no different than if you logged in to, you know, somebody else's Amazon account, I log in to my wife's Amazon account. I'm like, this is weird, because there's a whole bunch of crap on here that I'm not used to. And she logs into mine. It's the same way. But for whatever reason, when we log into an online ordering platform for a restaurant, it's not a customized experience, you get

the entire menu. So I love that you guys did that.

food item. You've got to figure out operationally because historically what would happen is the server was controlling the entire experience, good server, good experience, bad server, bad experience. Now you go digital and you take some of that control away. And I say some of the control away from the server to manage the speed and the pace and making sure the items getting out of the kitchen and bringing it to the table and

such. And so I guess I'd love for you to talk ALIX about how you guys have consulted with your restaurant and bar clients as it relates to considering whether it's runners to bring food runners to bring non alcoholic beverages. Historically, again, a lot of restaurants don't have a prep area for non alcoholic beverages, the server's get them themselves the server's get the sellers themselves. Now the guests is doing this digitally.

Talk to me a little bit about how you guys have overcome this from a technological perspective. Because I think it's something most people will okay, I'm all onboard. I got it. Alex, I had a horse and buggy is gone. I'm going to the new tech and then they go oh, crap, I guess you're having a bad experience. Because there's so does have been sitting out there and somebody brought their Vodka Tonic from the bar, and now their sodas are sitting in the non alcoholic beverage area, or

they didn't go get it. So talk to me a little bit about how you guys have dealt with that.

our customers. Fully staff, and this is a they serve food and they serve alcohol, fully staff giant patio bar Sports Bar, they touch about 15,000 consumers a month go through this location. So super high volume, tapped out, they were about doing they were doing about $350,000 in monthly revenue, Max, a full staff full everything. They're doing over a million bucks a month now. Wow. Embraced guests

let experience. And so as our platform, and I'm sure others do as well, when you hit the NFC or the QR code at the table, obviously it has that table number embedded in it. I ordered my whatever my wings in Tito's, and there's literally somebody at the drink stand, printer comes up or bar display system shows up. That's Alex's vodka soda at table 42. And they're just having runners. And it's taking them from 350 grand to a million bucks a month, because they've adopted this service

model. And so we also hear from a lot of folks saying, Well, my servers, you know, they're not gonna like this, wait a second. Let's say your average chips 20%. If your sales go up, 70% your tips are gonna go up 70%. And that's the math of like, oh, yeah, that's, that's right. And in this same location, this owner, annualized, his barback. And what he's making per year, he's making $125,000 a year as a

barback. Wow. And because they've adopted the service model, now, they have a waitlist for staff to get in there. Because the staff is making so much money, all driven by Ken gaslit experiences, I order when I want I pay when I want my table turns when I want. And that's the story. I tell lots of fellow owners like myself, like, that's what's possible. And if I guess if somebody says, Well, I just don't want more sales. There's not a lot I want to like, okay, you know,

such. And so I think a lot of owners don't think that way, because they've, as you so lovingly put it are stuck in the horse and buggy age. So, talk to me a little bit about some about the idea of, of chargebacks, I guess. So a lot of people come back to me, and this is getting a little bit into the weeds as the technology. But we all recognize that, that that chargebacks are an issue in the restaurant and bar business.

People, you know, people's I wasn't there, and they call their credit card and say I wasn't there. And now you're now you're stuck. How have you guys dealt with any of the chargeback situations because I'm paying on a digital wallet, I'm paying on an online transaction and such, you know, maybe it doesn't matter because I went from 3000 a month to a million a month. And so if I if I got another $10,000 With chargebacks this month, that doesn't matter, because I got just that much

more gross volume. But But I guess I'd love to hear what happens here. Because that's what I get from people. I want to be able to see the physical card, I want to see Alex's card and then, you know, I mean, I remember I'm old enough, you're probably old enough when they used to ask for your ID every time you handed them a credit card, or even wrote a check. They'd ask you for your ID. Like that never happens anymore. Nobody looks at the back of the card to see that you haven't

signed it. But I've got customers that have said no, no, we don't want to do any of this stuff. We want to see the physical card before we do that, because we don't want the chargeback issue. How have you how have you addressed that technologically and even operationally?

worried about chargebacks. I would love to show them just the raw data, here's average charge, but we process hundreds of millions of dollars a month across our portfolio. Here's the chargeback rate on cards. Here's the chargeback rate on Apple Pay and Google Pay. Oh, by the way, you can do incremental loss. You don't have to worry about declines, you're gonna know it declines before they ordered that next one. How many times there's been a walk tab, because the guests knew was going to decline?

benefit as well. But using those payment methodologies across our platform, chargebacks are over half what they are in cards. It's

Alex has had to say. But I just I'm in a two year contract with with this company, or I've got, you know, all these payroll providers and back office providers that he doesn't support, and I need to have this stuff. Talk to me a little bit about what you guys are doing to combat that?

counter. But one of the things that we really did is we said to really have a truly amazing guest experience to do the things of integrated loyalty When it walks in. And Jeremy, great to see you again, your chips and salsa are on us today. Those kinds of levitation consumer experiences only occur through a consumer led

experience with the phone. But also when you control everything from the from the point of sale the B system all the way to see, like, Why does Uber work so well, they got a point of sale in the car on app on the other side, you have to control that whole thing. So we don't integrate with other POS systems, because we want to drive you know, reputational guest experiences every single time. Now the cost of getting into our platform is I mentioned earlier, bring your own device.

Go get your you probably have an iPhone laying there, why don't you try it and run it alongside if all you need is kitchen printer or bar display system or kitchen display system. And if you have them already, we can integrate into those I would need as a jack on your network

and trial. I mean, we are big believers and try and if it's if it's a fit great we can talk about then when do we take over the balance of your infrastructure needs, but run this as a mobile solution alongside of whatever you have and give it a whirl. I love it. You're next to nothing to get in. And if you hate us, you got a couple of great iPhones.

episode for the month. Alex, thank you so much for your time and to our listeners. Make it a great day.