Mobile point of sale provider Appetize is targeting entertainment venues and music festivals, a niche that's often a testing ground for payments technology.
Appetize's founders built the platform after attending a Los Angeles Lakers basketball game, where they argued about who would have to walk to the concession stand to get drinks and miss part of the game.
"We had to get out of our seats, wait in a line or wait for a hawker to reach us," says Kevin Anderson, co-founder and director of business development at Appetize. "We then realized we were a perfect match for the team with one of us in technology, one in operations and one in sales."
The three co-foundersAnderson; Max Roper, CEO and technology guru; and Jason Pratts, director of operationslaunched a mobile app in April 2012. The app allowed consumers to choose their section row and seat at entertainment venues, add items, send the order to the kitchen, add a tip and pay all from the comfort of their seats. Consumers could pick-up items or have them delivered.
"We're stretching the point of sale out from just the [terminal] all the way to fan's pockets," Anderson says.
After about a year of beta testing in "friends of friends' clubs and theaters where [Appetize] could fail in a safe environment," the company built technology for iPads so waiters could carry the point of sale terminal while serving consumers, says Anderson.
After the tests, Appetize was approached by Spectrum Catering and Concessions to build a point of sale system for its entertainment venues and outdoor events.
In late 2013, Appetize Activate, the point of sale system, was deployed for outdoor festivals at three concession stands at the Free Press Summer Festival in Houston, Texas which is put on by Spectrum.
This year, the festival, which took place May 31 through June 1, deployed about 150 Appetize units, which accepted 90% to 95% of the transactions on site, says Anderson. "Spectrum is now transacting pretty close to every dollar at these events with Appetize," he says.
Spectrum used Appetize's iPad-based system during four PGA tournaments and four major music festivals, also including Bonnaroo, March Madness Music Festival and Governor's Ball, says Derek Mills, chief financial officer at Spectrum.
"Financially, Activate has allowed Spectrum to accept credit cards at all locations, including those with a network connection and those without," Mills wrote in an email to Appetize. "The average ticket sizes are considerably larger between credit and cash transactions."
During this year's Governor's Ball music festival on Randall's Island in New York, the average cash transaction was $12.78 compared to the $17.88 average card transaction accepted on an Appetize terminal, says Mills.
The point of sale system also includes enterprise-level analytics, product mix reports, and push notification offers.
During the Governor's Ball, the company launched a Bluetooth integration, which allows users to pay via Bluetooth in online or offline mode. When a consumer with the app gets within range of the point of sale terminal, a user profile appears on the terminal for the cashier to select and start the payment with a linked credit card within the app. The cashier then turns the point of sale screen towards the consumer so they can sign with their finger.
The technology has been used elsewhere with mixed results. Square Inc. built a similar point of sale system called Square Wallet which disappeared from the app stores in May. Square Wallet did not resonate with consumers, the company told Re/code.
DoubleBeam, a mobile commerce solutions provider, is working with SK Planet Inc. on a similar system, allowing merchants to pull up consumer profiles on their GoPago point of sale system if the consumer is using the Slyde shopping app.
Another Appetize feature that has been helpful for music festivals is the training module that's installed within the point of sale app. The module runs through the key navigational points of the system for users logging in for the first time.
"At these music festivals and outdoor events, they're using a lot of volunteers and part time workers and they don't have time to train these people on the system," Anderson says.
Appetize has additionally white-labeled its solution for Madison Square Garden, opening up mobile ordering and payment to about 18,000 people per event. The company's software development kit (SDK) plugs into any branded event venue or team app.
The company is currently plugging in to the New York Knicks basketball team app and is working with a couple of National Football League (NFL) and National Hockey League (NHL) teams, which are expected to launch next month, says Anderson.
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Corrected July 23, 2014 at 12:56PM: An earlier version of this story misidentified the basketball team Appetize works with. It's the New York Knicks.