Plastic-Free Payment

You wake up unsure of what room you’re in. All you can smell in your half-drunken stupor is old beer and the stale cigarette smoke in your hair. The worst part of your fraternizing – your credit card is MIA. Maybe you didn’t drink too much the night before; instead you just wanted to leave the club without waiting in a long line to close your tab.

Maybe you have siblings that love to use the family name to run up your tab, or maybe you’re a bartender who’s sick of getting stiffed by poor college kids.

Tabbedout addresses all of these problems. The locally-invented phone application makes mobile payment possible at restaurants and bars, requiring no actual exchange of your card in order to start or close a tab. The application is free for consumers and is available to merchants for a monthly fee that is, “no more than a cable bill,” according to Michele Fanning, marketing director at Tabbedout.

Fanning said the app is currently available at more than locations in 31 states.

If both customer and merchant use the software, the customer can open a tab on their iPhone or Android by giving the bartender or server their password. They can also monitor their bill while in the establishment and are able to split tabs at the end of the night using the app. The software is integrated into POS (point of sale) systems in restaurants and bars. The merchant can set a minimum tip rate safeguarding service industry workers from poor gratuity. It also benefits the establishment by raising visibility of their location to app users.

Long before the prevalence of smartphones, co-founder Rick Orr and friends waited over an hour to close a tab at a restaurant. This became the inspiration for what Fanning says is a truly one-of-a-kind business.

“We’re the only ones doing what we’re doing the way were doing it. You got to time it right, especially since we’re a startup, but I think we’re in the right place at the right time,” Fanning said.

Tabbedout could be used in correlation to other service industry-related apps, like the reservation app OpenTable.

“We’re very different from most of the other apps that are in the hospitality space right now, especially payment apps. We’re very complimentary to something like OpenTable,” Fanning said.

Some feel that kinks need to be worked out; a situation that could be expected with a new product or service, especially something as technical as a mobile payment solution. More so, the company needs more locations to really grow their customer usage.

“It’s kind of a chicken and egg scenario, because you have to have more locations before you can really push the consumer app usage,” Fanning said.

“We recently launched offers in Austin. We have a new feature where we’re offering discounts on your tab. That’s another way were getting more people to use the application,” Fanning said.

“For 2012, our big focus is on increasing our merchant base. We want to go from hundreds of locations to thousand of locations,” Fanning said.

Their long term goals are even more ambitious.

“The mobile payment industry is a really hot area. Our long term vision is to be a mobile payment solution – a platform that other technologies can plug and play in, so there’s a payment aspect, there’s a marketing aspect … there’s other aspects to it. There’s definitely a sense of urgency coming out with these features,” Fanning said.

As a start-up company with much potential, job seekers are keeping an eye on it as well, especially those interested in marketing and engineering, their quickest growing departments.

Founder Rick Orr spoke at South by Southwest about mobile payments transforming consumer marketing. For more information, check out the website, tabbedout.com.