Aussie hospitality startup Mr Yum is taking the meaning of a split bill to the next level, partnering with buy-now pay-later behemoth Afterpay to offer deferred payments for food and beverage purchases.
The pilot program will see Afterpay accepted as a payment method in venues using Mr Yum throughout Australia, with plans to expand the service as the startup grows overseas.
It represents the first time Afterpay will be offered in a hospitality setting.
Founded in 2018, Mr Yum started out offering QR codes, digitised menus and remote ordering for dining at restaurants.
The onset of the COVID-19 pandemic in Australia in early-2020 led the fledgling startup to pivot, building its pickup and delivery option within a few days.
That led to a period of exponential growth, with the dollar value of all transactions going through the app increasing 27-fold between December 2019 and December 2020.
In April 2021, Mr Yum secured $11 million in funding to take its product global, starting by building out its existing teams in the UK and the US.
The pilot program in partnership with Afterpay follows a successful three-month trial with Australian venues including Vapiano and more than 100 Australian Venue Company pubs.
Speaking to SmartCompany from Los Angeles, Mr Yum co-founder and chief Kim Teo says the move was a natural one for the growing business.
“It’s really about giving customers what they want.”
Mr Yum itself is payment agnostic, she notes, and strives to give customers as many options as possible. The idea is to be frictionless.
“BNPL as an option for payment has become massively successful,” she explains.
Food and beverage purchases may not necessarily be the biggest for consumers, but Teo says they’re increasingly falling under the ‘experience’ category, rather than essential purchases.
Going out to enjoy a meal with friends and family isn’t really so different to buying a gift or a holiday.
Mr Yum offers online payments. People buy gifts, experiences, products and even travel online using Afterpay, so it stands to reason they may want to use the tool to pay for their dining experience online, too, Teo says.
“We think it’s going to naturally happen … it’s only really an evolution of what they will expect to see in food and bev.”
This is particularly true among younger consumers who are less likely to have a credit card — something you wouldn’t think twice about using to pay for your dinner.
Afterpay and other BNPL options don’t allow for the same kind of debt spiral that credit cards do, Teo argues.
“Credit cards are becoming less and less trendy.”
And it’s another Aussie business that is leading the charge. While it isn’t without its issues, ASX-listed Afterpay is also growing its business in the US and the UK, and making moves into banking and small business lending.
Its share price also skyrocketed during the COVID-19 pandemic. Currently, Afterpay has a market cap of over $35 billion.
The BNPL category is only on the up, Teo says. And as a growing Aussie startup, she’s excited to partner with another local success story.
The two have even chosen the same markets to start their global expansion, she notes.
“That’s really fun and exciting and aligned,” she says.
“We get to partner with a company that we really look up to, who have built an amazing consumer brand in a very short space of time.”
Being the first in the world to offer Afterpay for a dining experience is “pretty special”, she adds.