Lunchbox takes on Olo with new payments tool

Open Payments gives restaurants more flexibility in choosing a processor for online orders. It’s Lunchbox’s latest effort to compete with the larger Olo.
Lunchbox offers online ordering for restaurants. / Photo courtesy of Lunchbox

Online ordering company Lunchbox this week unveiled a new feature designed to make payments more flexible for restaurants, taking a shot at a rival in the process.

Open Payments acts as a gateway that allows restaurants to use their POS system or payment processor of choice for online orders. That means they can consolidate in-store and online revenue, which unlocks economies of scale and operations benefits, said Lunchbox co-founder Hadi Rashid.

The new tool is a direct attack on Lunchbox’s larger competitor, Olo, which launched its own payments product, Olo Pay, last year. 

Lunchbox’s offering is designed to offer more flexibility than Olo’s, which uses Stripe to process payments. 

“Had I used an all-in-one gateway-processor solution, that means my [online ordering revenue] now lives outside of my in-store processing revenue because someone else is processing that revenue,” Rashid said.

Combining the two revenue streams can benefit restaurants in a couple of ways. It can help them negotiate better rates with their payment processors because their overall volume will be larger, Rashid said. And it can streamline some operational tasks. For instance, a customer who ordered a burger and fries online but forgot to add a drink can easily do that when they arrive to pick up their food, because online and in-store payments are connected.

Most restaurants today use different processors for in-store and online orders, Rashid said. He said Open Payments is the first gateway that allows them to connect to most major POS systems and processors. 

“There’s nothing that does everything from POS A to Z, and that’s the competitive value of working with Open Payments,” Rashid said.

That required Lunchbox to get certified with the various processors as well as prove its system could securely handle customers’ credit card information. 

“That’s a lot of responsibility for a company like us,” Rashi said. “It took years to build.” 

Pricing for Open Payments depends on a brand's unit count, volume and check size. 

It’s the latest effort by Lunchbox to compete with Olo, which powers online ordering and other services for more than 600 restaurant brands. Last year, Lunchbox began going after the bigger restaurant chains that are Olo’s bread and butter. It also added an order integration tool that is similar to Olo’s Rails product.

More than 5,000 restaurant locations use Lunchbox.

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