Transparency in payments: Building trust through better tech

Our latest podcast episode explores the current state of hospitality payment technology while discussing how innovation, smooth integration and stellar support are all essential in giving full-service restaurants (FSR) and quick-service restaurants (QSR) the tools to scale. This talk, brought to you by Dojo and led by industry leaders, dives into the challenges of adopting new payment technologies and gives expert tips for a smooth, successful transition. 

Speakers:

• Chris Fletcher, Host, Tech on Toast Podcast
• Hans Arthur, Head of Enterprise Sales at Dojo 
• Andy Maynard, Director of IT at the Restaurant Group
• Nick Fryer, CTO at Dojo 
• Mitz Patel, Head of IT at Prezzo

Understanding transparent payments

Payment systems have undergone a steady evolution over the last few decades. From cash to more secure methods such as chip and PIN, and now contactless and digital payments. As businesses adopt these technologies, it’s essential to have smooth card processing that gives customers a frictionless payment experience. In the hospitality industry, payment transparency can be achieved through integrated payments. Reducing miskeying errors and, as a result, protecting hard-earned revenue makes integrated technology vital to the operational effectiveness of your tech stack.

Watch the full episode now:

Podcast synopsis:

1. The evolution of payment systems in the hospitality sector: Andy and Mitz highlight the shift from cash to contactless payments and the importance of seamless payment processing in enhancing the customer experience.
2. A deep dive into Dojo’s payment solutions: Nick delves into the technical aspects of our payment suite, explaining how modern software engineering techniques have been applied to create a fast, reliable, and secure payment system. He emphasises the importance of integrating payments with POS systems and the challenges that come with it.
3. The importance of flexibility and support in rolling out new payment systems: Hans details his experiences working with clients like Young's and Prezzo, highlighting how Dojo's approach to solving old problems with new technology has helped enterprise businesses scale. 
4. The operational challenges of implementing new payment systems: Andy and Mitz share real-life examples from the Restaurant Group and Prezzo. They emphasise the need for strong support and quick problem-solving to reduce operational disruptions.
5. The future of payments: Discussions around the potential of open banking and the importance of loyalty programs. Nick shares Dojo’s vision of creating frictionless payment systems and integrating loyalty rewards seamlessly into the customer payment journey.

Transcript: Upgrading the restaurant experience 

Introduction

Chris: The industry is taking on a lot of pressure at the moment. We surveyed our database, and there are three pain points that customers hate: Waiting to sit, waiting to order, and waiting to pay.  Payments are the one we're going to tackle today. 

The evolution of payment systems in the hospitality sector

Chris: In your long journey in hospitality tech, how have you seen payments evolve over the last five to 10 years? 

Andy: What excited me most was making it easy for our guests to pay. Nobody wants to put their hand up and wait 20 minutes for a bill. When I was at Young's, we worked with Barclaycard and did work around contactless. Everybody was saying that contactless is not going to be a thing, and we were one of the first enterprise customers to really drive that. 

We were looking at it through two lenses: from a customer perspective, to make it really easy for them to pay. Second, let's make the bank reconciliation process as straightforward as possible.

They were the two problems that we wanted to solve. Contactless and integration with POS. You then introduce e-commerce as another channel – it's about removing the friction. Nobody really cares about this stuff; they just want it to work, be reliable and have support when it breaks. 

Mitz: When I started seven years ago, I was paying cash. I'm the worst IT person because I'm adamant that I don't like change – having a new phone is a nightmare for me. So we (Prezzo) took cash. Over time, people around me started to take card payments, and I was like, “I don't know about that”. When we poll our customers, we do an NPS scoring, and one of the pinch points is absolutely the payment part. 

We spend a lot of time making sure you're welcomed into our restaurant. You might have really good food, great service, and then you wait, and wait, and wait. We at Dojo are probably one of the first to use Pocket to order and pay – all in one machine. It's absolutely revolutionised the way that we serve our customers and our NPS scores as well.

Chris: Has it been reflected in your scores? 

Mitz: Absolutely. One of the great things for us is the flexibility. During the summer, when we know that our alfresco dining areas are going to be busier, we can flex up and temporarily get more units in, because we pay on a subscription model. Broadstairs has a massive outdoor area that backs right onto the beach. The general manager was saying, “If I can have another four Dojos (card machines), I can cover the back area completely.” It works for us, and we can just flex up and down whenever we need to.

Chris: What was the narrative about fixing this problem, and how has it been building the product to tackle this problem? 

Solving old payment problems with new thinking

Nick: Integrating payment to the POS shouldn't be difficult. For example, the POS needs to take £10, and the payment device needs to say the money has been taken. The problem is that the nature of old-school payment tech was beige boxes, serial cables, and bespoke software on the terminals, so it became difficult. 

Part of what we did with Dojo is to modernise. I spoke to people at Ingenico, and they said, “Look at WorldPay and Barclaycard, they're all the same, and ours was exactly the same.” There was an acceptance that online payments became really good. Stripe and Zettle made it easy to take online payments, but no one was taking on the bigger volumes and saying, “Surely we can make that integration easy.” That was the motivation to solve all those ridiculous problems that people assumed were just a given.

Challenging industry norms with a customer-first mindset

We (Dojo) hired a team of people who didn't really know anything about payments, including me. We hired good software engineers and said, “Here's a problem, go and solve this with modern software engineering techniques”. It was all public cloud, all microservers, all the things that anybody who starts something new would do. But our competition just didn't operate that way. So all we wanted to do was apply modern software engineering techniques to a fairly old problem and hire people who didn't know the old way. 

Typically, everything would be done on the terminal, which made it very slow and clunky. With Dojo, the guy lifted the card number off the card through NFC and chucked it at the backend with a proprietary protocol that's using JSON. That's the way you communicate these days. It's super thin, so you need no bandwidth, and it's super quick. Almost like a happy coincidence, our authorisations are around 12 seconds, from starting the process of thinking about taking a payment to getting it authorised. 

Our backend is almost always under one second. The actual process, once you initiate the payment, is very quick – it's because we use modern techniques. Even some of the good guys go through an old-school acquirer, so they hit the mainframe – but we don't. We go straight into the Visa EA servers – that's their entry point into their network. Same with Mastercard and American Express. It all fell into place.

Forging a modern, innovative approach to payments

Nick: We didn’t want to take any of the norms. PCI DSS is seen as a scourge, but it's actually quite a good thing. We should be careful with card numbers because bad things can happen when you're not. We made sure the solution had a proper PCI point-to-point for all of them by default, so no one actually sees card numbers. You can have the most insecure network in your restaurant – no one cares. 

We took that PCI. Most acquirers monetise it – they charge you a monthly fee and see it as a way to make a load of cash. We just wrote it off, so you have the most secure system using point-to-point. It's incredibly easy to set up, use and deploy new terminals with it, because we made it very easy to operate. It's just a standard feature with Dojo. 

We took on big pain points, like the 365-day settlements. At Dojo, we pay our customers long before we get paid, so we have to take loans to fund this, which costs us a lot of money. We took these accepted norms, challenged them and tried to do it through a very customer-first lens. We targeted SMEs initially, but bigger customers also valued it, which is why we added more stuff to cater to everyone.

Chris: Hans, you have to unpick the situation that Nick creates for you. Do you spend a lot of time untangling what's out there and what people have been using before? 

Hans A: I’ll go back to when Dojo was born, around 2020. It was SME-led, fixing the pain points that Nick mentioned. I spoke to Young’s – a big brewery with 240 sites – about how they needed integrated payments. Paymentsense had the API, so I knew we could do ‘pay at table’ and ‘pay at counter’, which was what Young’s needed. But we didn't have it yet because Dojo was just born. 

I knew Andy 15 years ago, worked at Young’s, and used to have a pub there. They trusted that I would deliver for Dojo. We worked with Young’s for nine months to build the integration, fix the features that worked for SMEs, and scale them for enterprise and did it in 9 months – which is incredible. We had the first site in the Boathouse. In early 2021, we started rolling out Young’s, which made us enterprise-ready. 

Working with Mitz last year, we relaunched the Dojo Pocket's “order and pay”, and the partnership has been vital. Dojo still acts like a startup, fixing problems that would work for an SME, but we can now scale it for large enterprise customers. That's why I love it. That's what makes us excited about signing bigger brands and working with people like Mitz and Young’s. 

Overcoming operational challenges 

Chris: Andy, you mentioned previously that Wagamama takes 50% of their payments online or via QR code at the table.

Andy: That's growing. It's our biggest single source of customer data. You provide us with your details, and we can now link your details with what you've bought and how often you’ve come to our restaurants. It's been brilliant for Wagamama. It stops friction and allows people to leave whenever they want. 

The biggest challenge comes back to integration. In a world where you've got a payment provider, an app and a POS, when somebody on an Oracle POS opens the checkup to see whether the guest has paid or not, it can't talk to the POS and settle the bill. We've taken the money from the guest. The staff potentially think that the guest has walked out without paying. So we've done a lot of work to see if these are genuine walk-outs or payments we've got in the bank.

Chris: You spoke about working with Wagamama. How is that going? 

Andy: It’s mostly operational training now. You've got old-school operations, with Ops Directors saying, “We've got about £200 worth of walkouts in Paddington this week, what are you doing about it?” You've got team members going, “I best check to make sure that the guest has paid”, and checking when they shouldn't be, when the guest is trying to pay, and rugby tackling them as they leave the restaurant. Well, they've paid, but they think they haven't.  That's a real-life challenge. 

There's been a lot of operational training that we've put in place, and some work with Oracle to enhance how they work the POS. We've made it really easy for the guest, but that integration piece has been a challenge for us and continues to be.

Modernising legacy systems with collaborative rollouts

Chris: Nick, why is the integration piece still such a challenge? 

Nick: Integrating with legacy tech gets complicated. When there are a lot of different players involved, you need multiple different integrations to work to get the overall business process to work, and that can be a problem.

There are always going to be multiple players in any kind of value chain. You could move to RESTful APIs, which are much easier, but a lot of tech doesn't support that because of the way they're deployed. As more moves to the Cloud, integration will improve. But while we're still having to talk Cloud to Beige Box, back to the Cloud for something else, you're always going to have a hard time.

Chris: Mitz and Hans, you mentioned you’ve been working together. How long did it take you to get from point A to point B? What's that journey like for an operator?

Mitz: We were with Mastercard, and they were closing off their gateway, and our POS provider was looking for an alternative. We were applying pressure because we knew that the deadline was coming and our POS provider was taking a little bit of time to find the right solution. Then we met Hans and Dojo. It was quicker for them to build the integration with our POS provider than it was for our POS provider to bring on another supplier. That shows how having proprietary technology and managing the point-to-point can be done very quickly in-house. The hardest part was trying to get them on board. After that, it was plain sailing. 

Hans: We met at one of the HRC events at the Excel in London and had a couple of meetings. Prezzo has nearly 100 locations all over the UK. We have a really good account management team and onboarding team, and planned out the rollouts. Dojo Pocket was new, the product manager was heavily involved in it, and it was a massive team effort.

We did the rollout, trained the team on how to use it and were driving all across the country. We did it all in less than 3 months across 100 sites. As the Pocket was new, we did it via an RDP app, but we had the Dojo Go as backup, which had the Comtrex integration. So you could “pay at table” and “pay at counter”, but we wanted the team on the floor to be able to take an order and payment in one seamless flow. 

Mitz and the Prezzo team previously had the Honeywell Devices and a different card machine – that's why they wanted an all-in-one solution. They had a scanner, so we did a workaround, and now have the scanner in the Pocket. Dojo has 150,000 customers, but we still have that startup feeling. We work with our enterprise clients to fix problems, and we can do that quickly.

Shaping the product through operator feedback

Chris: Nick, how much feedback are you gathering from operators like Andy and Mitz, who are helping you develop the product? And what kind of cycle are you working on? 

Nick: We try to spend as much time with operators and partner businesses as we can. It’s how we came up with Dojo in the first place. We had a load of feedback, but we couldn't do anything about it because it was somebody else's product. So if we stop listening to feedback, we stop being who we are.

Our system is made up of more than a thousand microservices that run over two or three public clouds in Kubernetes. We release them individually, so we have software engineers and product squads that work on certain groupings of these microservices. When they're ready, it just goes live. 

We’ve had customers say they want to test the environment and be told exactly when we’re going live, but we can’t provide that. That’s not how modern software is built – that’s how old-school quarterly or even half-yearly releases work, which a lot of businesses in payments still do. We release something every day, and it’s not necessarily something that will affect customers. If something comes along that is significant for a customer and we need to do some comms around it, then we do. But in terms of being released, there is no weekly or monthly release cycle. 

When it's ready, it gets pushed to production. People say, “You’ll break the payments”, but we've been doing it for four years and we haven't had a single outage in our authorisation. We've just used modern ways of building software and applied it to an industry that is pretty old-school.

The value of exceptional customer support 

Chris: How much do you prioritise support when you're looking to purchase something?

Andy: It's right up there. The one thing that we can guarantee is that at some point, the technology is going to break. When it does, as operators, we are concerned about how quickly we can get it back up and running. Consumer tech sets the bar. If I were to lose my phone today, I could go buy another phone, download everything that's backed up to the cloud, and get back up and running. It's taking that mindset. 

The difference between Dojo and anybody else in this sector, and it's genuinely not a sales pitch, is the mindset and attitude. It's taking those modern ways of working and product mindset that says, “Here is a problem that everybody else is just accepting – let's see how we can fix it.” Because Dojo isn’t tied to those old ways of working – it's so refreshing, and that's the difference.

Why do we make it difficult from a support perspective? If I take the Wagamama stack today, we take software from one player, it gets installed by somebody else, we have to do a piece of integration with Oracle, and then somebody else takes that device to a restaurant. When that breaks, you have to repeat that process. It takes two or three days for that to happen. At airports, it takes a week before you can get a replacement device if someone has dropped it.

Andy: The Restaurant Group run a number of different brands and businesses, but we've had sites that need 18 PDQs to run. They get to the end of a weekend, and they're down to six. Operationally speaking, that's going to have a massive impact on the guest experience. The team doesn’t want to turn up to work because they don’t have the right tools to do the job, and the knock-on is huge. 

During Wimbledon fortnight, the pubs in Wimbledon Village take ridiculous amounts of money. Hans just picks up the phone and says, “How many more do you need for a fortnight?” I have to commit with my existing provider for 12 months, and then they took three weeks to ship stuff to me. So it's about mindset. That's what I love about Dojo, because it's breaking the mould.

We did some prototyping around “order and pay” on one device, where you’ve got an order device and a PDQ. The integration with Oracle was done really quickly and had something in the lab within three or four weeks. We didn’t take it any further at the time, but it’s still on the back burner, and we’ll absolutely be doing something with it moving forward.

The ease and efficiency of being supported by Dojo 

Mitz: Support is really big for us, and one of the biggest things we look for when we onboard new suppliers. We have weekly calls with our Dojo account manager where we give them feedback on what we're seeing on the ground floor. I don't spend that amount of time with any other supplier. That's how quickly they adapt to what we need. 

Our restaurants are incredibly resilient. You could turn the gas off in a restaurant, and they'll still find a way to trade. You could turn the lights off, and they'll put candles out, and trade. They do worry about card payments, and going cashless has made that more important. The support you get from other providers isn't always great, and you wait a long time for replacements. We can get additional units into a site within a day or two – that's how quickly they can turn it over. 

We're not Wagamama or Nando's, we're the kind of restaurant where you want to sit down and take your time. You want to get your money's worth, and if you're coming for a special occasion, you're going to spend some time there, enjoy the atmosphere, music, the food, and the service. We've tried things like “pay at table” and struggle to get customers to use it. Maybe our clientele is slightly different, and people want to spend a bit more time in the restaurants. Being able to flex and support the people in these restaurants is still key for us.

The future of open banking

Chris: What is Dojo planning to do with open banking?

Nick: We trialled and built open banking on our Dojo Go, but never productionised it or put it into the market because we weren’t sure if anybody wanted it. People do want account information service – that's where you can pull information from someone's current account for things like credit scoring. Then there's payment initiation – doing an account-to-account payment. For big-ticket items, customers may want to do this to avoid credit card fees, and we're already piloting this. 

With our payment links, you can now do an open banking account-to-account payment. We can put that on the card machine because we have a single system – it’s all our own code. We’ve long had the capability to do this, but we just never saw the customer need. Now we are, so we’re doing it. But it’s generally a big-ticket item.

Hans: Think about 10 pubs. If they're buying beer and paying the rent, how do they pay it? That affects the main operator. A lot of those payments are made by credit or debit card, and they’re paying those fees. That’s where the conversation around open banking has taken off. As Nick said, it’s been scoped, and we’re hoping it goes live pretty soon.

Nick: Rather than doing it from the customer's account into a Wagamama account, we do it into a Dojo account, and it's all lumped together with your single settlement overnight.

That means you get the money slightly later, but it means reconciliation is easy. Ideally, we want to take any payments our customers do. We don't want to be a Visa and MasterCard machine; we just want to take payments. Cash is always going to be one step too far, but we want to facilitate anything other than cash, and have a single payment that matches exactly what your takings were the day before. Just keep it mega simple.

Toast and Lightspeed Payments are direct competitors that are POS-first and have bundled payments. Toast has always bundled payments and never allowed you to use anyone else's, and Lightspeed does the same now, making a lot of money there. They are a competitor for that reason. We used to have some Lightspeed customers who had been forcibly moved to Lightspeed payments, so I wouldn't say they're a direct competitor. 

I was explaining to Andy some of the more boring aspects of payment facilitator models. It’s very common in the US, and there’s not much time to go into what that means — but essentially, it allows the ISV (independent software vendor) to make a lot of money from payments. That doesn’t apply under EU or UK regulations, though there’s a bit of that model happening around the edges. It tends to work commercially only for smaller businesses, where they can charge higher rates. If you want competitive rates, it doesn’t really work — that’s just my opinion. But they’re good businesses for certain use cases where the model fits.

Getting started with Dojo Pocket

Chris: How does Dojo Pocket work with Swipe and Chip and PIN? 

Nick: Swipe is dead. It's against scheme rules in the UK now, and our Dojo devices have never accepted Swipe payments. Signature is no longer an accepted form of authentication, while Chip and PIN is. The Pocket is contactless-only and runs on a regular Android device. It's not certified by PCI DSS or EMVCO – only Google has any form of certification, and it's a standard Google product. 

We built software that’s still allowable by the payment industry to run on a non-certified device, and we were one of the first to do it. But it does mean you have to do contactless. In most markets, other than the UK, this is not a problem because you can use an online PIN. You can tap it, and it will prompt you for a PIN without inserting the card for purchases over £100. 

In the UK, we are old-fashioned – you have to check the card itself, hence the insertion. Most cards still have an online PIN in the UK. We now have a workaround for those, too, so we don't need a card slot. There may be some consumer behaviour challenges – people might wonder, “Well, why do I have to insert my card? Why can I just enter my PIN?” But I think that’ll fade over time. 

Hans: There are a couple of ways we do this with our onboarding team. We can get some of our onboarding team on-site to do the installs and training, or we can do it remotely. Once the agreement is signed, the machines arrive the next day, and we can set up the onboarding team to dial in support for the setup, getting them live. It's a six-digit activation code, and away you go. We've also just launched a new activation method where you can scan it from your phone, and it will go live. 

Finding a single source of tech truth 

Chris: When you're buying in any kind of tech, do you have one point of truth for who manages that project? 

Andy: We are known as “Tech and Change” as a function, so we have an established change capability. Wagamama is genuinely the best operating model I've ever come across.

When I first met the person in charge, he said, “You don’t do anything in any of my restaurants without talking to me. As long as you do that, we’ll get on like a house on fire.” And it works – everything in that business goes through him. We run the projects as you’d expect, but we also work very closely with the ops team to make sure everything lands well and they’re fully bought in. That’s just the way they operate.

Chris: Mitz, how does it work for you guys? 

Mitz: It’s challenging. It’s always Ops versus IT. The Ops make sure they deliver service while we’re focused on trying to make it easier for them. There's always a to and fro for a bit. Like with any change, it's about good communication – making sure you tell the people what you're doing and why you're doing it. Hans touched on how Dojo roll out. We could’ve done it remotely, but we chose to have someone at every site for the personal touch – and Dojo provided a team who visited each one of our restaurants, one by one, and launched the devices. 

It just means that right from the start, the bedding-in process is completely different. Having somebody on-site for the first couple of hours of trading to answer any questions, offer reassurances to customers and staff is absolutely vital. 

Looking ahead to loyalty programs

Mitz: We don't have a loyalty program at Prezzo. We've been trying to decide what to do and how to do it for ages. Looking at other chains, you download an app, store it on your phone, which takes up real estate on your phone. You download it when you want to use it, then delete it, which is what I tend to do. 

We take a lot of information from our customers – booking details, baskets – we have all kinds of information. What we can’t do, and hoping you can (Dojo), is the payment link to the basket. Then we can create the surprise-and-delight moment. We don't want people to have to download anything or jump through hoops to get loyalty. You should just get rewarded because you've come to our restaurant and chosen us over somebody else. It should be straightforward. You make a payment and – “You’ve been here X times, here you go”.

Chris: Andy, have you got a comment on loyalty?

Andy: I can do a sales pitch because we're launching a loyalty app in Wagamama. If Dojo can deliver, without it being creepy and feeling as though somebody's spying, and can link it to make it frictionless, no one else has been able to do that. People have been talking about it for years, but I think it might be a game-changer in our sector.

Nick: It's removing the friction, but also offering people a choice. Some people just want to pay with a card machine; they don't want to be part of loyalty. We don't want to take that away and just make it super easy for them to do what they want. Not only super easy for the consumer, but also for the people working in the restaurant. 

We talked a bit about invisible payments – the longer-term goal. It’s not just about making QR payments more slick and less clunky, but also registering cards in a wallet that could be part of the new Wagamama app. For example, an auto-pay, so you can just walk out. Your walkouts don't cost you money, and restaurants get paid. We've already piloted some payments through the app to automate. It could tick your creepy box, but it's just making payments not be so in your face. We just need to make it as invisible as possible.

Chris: It’s been a really interesting conversation. Thanks for joining us today. 

The importance of innovation, integration, and support

That’s a wrap on your business guide to payment solutions in restaurants. A reliable payment system is key when scaling an enterprise, particularly when improving business efficiency. However, as businesses expand, tech stacks can often fracture, leaving them with legacy systems that can slow down operations. Episode 2 of the Tech on Toast Podcast gives insights from Chris Jolliffe, our Head of Enterprise Sales, into how seamless integrations can help manage this challenge.