Touchbistro recently struck a deal with Chase Bank that should help them grab a larger share of the North American restaurant market. To understand how this played out, we sat down with Alex Barrotti, Touchbistro’s founder and CEO.
“Chase counts 4.5 million SMB merchants in North America,” Barrotti says. “These are companies that are earning less than $20 million in annual revenue. Of those 4.5 million, Chase has around 40,000 of them that are restaurants. These are customers that Chase wants to more actively support with processing and business tools, so they were looking for a POS partner.”
Alex shared that he was only enlightened about Chase’s search later in the game. “Chase had been looking for a POS partner for a while and it just happened to come up in a conversation I was having at the time. That’s when I thought we should throw our hat in the ring.”
Touchbistro went up against Talech and Revel, who were also vying for a deal with the bank.
In our opinion Chase had to be thinking about the applicability of their potential POS partner. Talech is a lightweight solution that has primarily resonated with Level 4 merchants but is not top of mind when thinking of larger merchants. Plus they have a tight Elavon relationship, something that could rub Chase the wrong way given their Paymentech processing arm.
Revel has had a bit of a disastrous history and revolving door with their senior leadership. Their former CEO, Scott Betts, was never responsive. Their latest CEO never responded to our inquiries either. That’s not the type of culture we’d emphasize and we’ve seen evidence of this bad behavior manifesting itself in Revel’s product and sales teams.
If a merchant walked into a Chase branch and wanted to open a fine dining restaurant doing $4M in annual sales, it would be hard for Chase to stock a solution like Clover and feel good about pawning that off. Touchbistro gives Chase a solution that can cater to a Level 4 merchants but has the functionality to support larger merchants. Touchbistro represents12,000 merchants with over $6B in processing, though Alex says their average merchant does closer to a million in annual unit volume (AUV). Compare that toShopkeep whose merchants are 60% smaller.
The partnership doesn’t just benefit Chase, however.
“We’ve had our own customer onboarding challenges on the payments side,” Alex shares. “Traditionally we would sell Touchbistro to a merchant and it was the merchant’s responsibility to choose a payments provider. Far too often the payments provider created a black hole that was hard to see around.”
About a third of Touchbistro’s installations ran into delays because it was unclear if the merchant had chosen a payments provider, if the payments provider had shipped the proper hardware, or if the merchant had even been approved by the payments company.
The partnership with Chase changes this.
“Now a Touchbistro merchant coming from Chase gets everything shipped from one provider. Merchants are immediately onboarded onto Chase’s processing and funds aren’t even released to the merchant until Chase has approved the merchant. The whole process is much smoother,” says Alex.
This is a big distribution partnership for Touchbistro but it’s even more telling that Chase went with a POS company that could support larger merchants. We wonder if some of the payments companies are having trouble with the lighter weight POS solutions.
Is market data now coming in that shows higher churn with the lightweight POS solutions? Is that because larger merchants were inappropriately directed to underwhelming solutions? We’ll need to wait until we see the data ourselves but it’s not a terrible theory in the meantime.
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