Serving Up Bitcoin in the Restaurant Industry: An Interview With Shawn Owen, COO of Southern Concepts.
As Bitcoin’s future continues to take shape, stories regularly emerge on the next biggest innovation, million dollar capital raises, and alleged nefarious acts on the part of bad actors. What receives little media attention is the on-the-ground, day-to-day use of bitcoin for business and commerce.
Enter Southern Hospitality, a brand of restaurants located in New York and Colorado that is associated with Grammy Award winning singer/songwriter Justin Timberlake. The downtown Denver location has the distinction of being the first to offer bitcoin as a payment option to its customers.
Chief Operating Officer Shawn Owen is a rabid digital currency enthusiast and a strong advocate of its value in the business-to-consumer world. In this exclusive interview, Owen opens up about Southern Hospitality’s success in integrating bitcoin as a desired payment option, and why it is a game changer in terms of the future of retail.
Here are some highlights of his discussion with BTCMANAGER.
Owen has an interesting history, having been brought on by parent company Southern Concepts to help open Southern Hospitality, as well as two other restaurants in Colorado. That’s where he began to formulate the connection between bitcoin and commerce which led to the decision to accept it at Southern Hospitality. Says Owen, “As a business person and a capitalist it appeared to be a great opportunity to reduce fees by removing transaction costs. I became obsessed with seeing if there were others out there who were willing to spend this crazy currency. So that, in a nutshell, was what spurred this decision — my personal passion to see if it would work.”
Why Denver? Owen says that “the young demographics and explosive growth of downtown Denver made it kind of a no-brainer.”
On the Bitcoin Integration Experience
According to Owen, the acceptance of bitcoin for the full dining experience that Southern Hospitality offers really works well here. Because it’s a sit-down restaurant which allows an extended interaction with the server, it allows the checkout experience to work relatively smoothly. He notes, however, that they elected not to integrate it into Carve, their new, fast-casual restaurant..
“How it’s done in a full-service restaurant doesn’t really translate to fast-casual because with the latter, customers have to pay then and there. So we are waiting patiently for a company like BitPay or BitGo to create a fast terminal checkout experience that better serves this model,” says Owen.
He says that the restaurant community in Denver is very curious as to how this bold move is working at Southern Hospitality. “Actually, what I do get are tons of questions. People say, ‘So, your restaurant can accept bitcoin as a currency?’ Most are still very confused. But I’ve actually been able to help a few restaurants in their integration so that they could realize the benefits as well.”
In terms of the setup process for retailers, Owen says it’s not the big deal that businesses often make it out to be. “It’s really easy. I spent almost no time on training employees because it’s very obvious what’s supposed to happen and it’s not complicated. You are literally just choosing in most instances, this button versus that button and this receipt versus that receipt.”
Owen notes three major advantages to Southern Hospitality offering bitcoin as a payment option. One, the transaction fee is nonexistent or very, very small. This is significant for a business that is constantly reviewing profit-and-loss statements, trying to figure out how to retain more of its profits.
“It seems like everyone is trying to take a piece of your earnings, particularly in terms of those 2-3% credit card transaction fees. Depending on the type of business, that can add up to a lot of money, even into the millions.”
Second, it mitigates the risk associated with theft of consumer credit card information. “As a business, we always have this looming fear of being hacked and having all of the credit cards we’ve processed being stolen, leaving us potentially liable.”
Third, Owen says that bitcoin provides an efficient payment option for customers beyond credit cards and checks. He believes that a growing number of business owners and restaurant patrons will eventually agree that this is a good thing.
Regarding the logistics of the overall customer experience, Owens states: “Basically, the main difference is that the customer has to notify us that they want to pay with bitcoin. This is a shift away from what most people are accustomed to, namely, presenting a card and having it handled by the server. Instead of taking your cash or card payment, our servers bring a receipt that has a QR code on it. You scan the code with your phone or mobile device which allows us to spit out another receipt that says it’s paid. What nice here is that the customer will typically see the transaction in their bitcoin wallet very quickly. Simple and efficient.”
How tips are handled? He notes that the only difference here is that the end of the business day report show how much each server made off of cash, credit and now bitcoin. “Most of our servers still opt to accept their tips in cash because this is still the easiest option. But I do have situations where employees from time to time will opt to have the bitcoin sent directly to one of their wallets. Not a lot of them, but some of them do.”
Owen says that there have been surprisingly few problems with processing bitcoin payments.
“We haven’t had any major hiccups other than when the Wi-Fi was down once and caused a major delay. That obviously leads to one of the vulnerabilities, which is how to process transaction off chain in a way that you can trust in the event that something like this was to happen.”
Future Prospects for Bitcoin in the Restaurant Industry
Owen believes that growing numbers of restaurants and other retailers will follow Southern Hospitality’s lead as they begin to see the bottom line financial and security benefits of bitcoin as a payment option. A major factor he says that would boost business adoption includes partnerships with preexisting point-of-sale technologies like Square and Aloha that are recognizable and already have a track record. “As soon as there is software which creates a button to select bitcoin, thereby generating an immediate QR code, the ability to pay would occur seamlessly. In other words, touch enabled and ready to go,” says Owen.
On the consumer side, Owen thinks that bitcoin debit cards may ultimately be a big game changer. There has been a lot of forward momentum of late in this space. “I find that interesting because in a way these cards essentially lead us back to what we were trying to get away from in the first place But what’s nice about this is that people are already familiar with how Mastercard and VISA cards work which boosts their level of comfort.”
The biggest concern that he hears from businesses contemplating the use of bitcoin as a payment option is price volatility. Here is his response:
“If you are business that’s running on a shoestring budget then you can set up your processing system to where the bitcoins you take in are automatically converted to dollars. This means that you’ll get the full dollar amount; if you sell something for $15, you won’t receive $13.50 minus the transaction fee, It will be $15.00 that shows up in your bank account the next day.”
Owen says that because bitcoin is essentially digital cash, it makes the reconciliation of money at the end of the evening a breeze. “It’s certainly been a much faster way of accounting for these dollars than counting cash and walking it down to the bank. My staff and I love that.”
His final advice to retailers contemplating a similar move?
“Number one, don’t wait — just do it. You have nothing to lose. Because in truth, you’re not giving up anything by accepting bitcoin as another form of payment. There are nothing but advantages because there are plenty of services that make it so easy to set up. If you just want to get started, go to someone like Coinbase or BitPay — companies that have been well established, well documented and have a good reputation. Get set up on an account, dip your foot in and check it out. Believe me, you’re not risking anything. So why wait on the sidelines when you could be saving a ton of time of money. Because the last thing you want to be saying as a business owner or general manager of a retail operation when bitcoin really hits is ‘I wish we would have.’ ”