Spotlight Interview: Dickson Chu, CEO of Copper


Dickson Chu is the CEO of Copper, a new pay-at-the-table system. As the story goes, Copper’s founder and CTO, Tobias Schneider, was at lunch with a few coworkers a few years ago when the inspiration for Copper emerged. The group had finished their meal and had to get back to the office. After waiting nearly 10 minutes to flag down their server for their check and then waiting another 20 minutes to settle the payment (it was a very popular and busy restaurant), Tobi came away frustrated and late for his meeting. He was also inspired to develop a solution that would allow him to pay with his mobile phone at his own convenience. Originally from Germany he was always chagrined when trying to pay a bill at a U.S. restaurant because he was accustomed to the server bringing the check along with a wireless payment device. As he researched pay-at-table solutions to understand why it was not widely available in the U.S., he learned there are a number of structural issues perpetuated by habit plus many technology limitations. Tobi’s spouse had spent many years working as a server in restaurants both in Germany and in the U.S. so he had direct user feedback about his various ideas for delivering pay-at-table. Thus the idea for Copper was born.

Chu has 30 years of experience in payments technology, including at PayPal and Google Wallet. He has also been an investor, board director and active advisor to a number of emerging companies that are working to define the next generation of payments, commerce and services.

What are some of the biggest challenges restaurant operators face today, and how can technology help solve some of them?

There are several challenges facing restaurant operators today. Some are persistent and some are, hopefully, temporary. For example, cost control is a persistent problem in an inherently low net margin business. Food costs, labor costs and payment processing costs are the most acute today. Another challenge is finding and retaining good labor is a constant problem but has been made more visible during the pandemic. Finding new patrons/customers and encouraging returning customers is an ever-present challenge for every operator. There are a number of opportunities to use technology to mitigate some of these challenges.

Cost management is a challenge in any business but particularly important in a high cost, low net margin business like restaurants. Food costs will ebb and flow with normal market dynamics but currently made worse by supply chain issues caused by the pandemic.

While restaurant operators cannot control the “supply side” cost — other than shopping around for new vendors with better prices — smart operators can absolutely help control food costs by leveraging the data that is in their POS systems to better forecast and plan inventory by closely monitoring sales patterns, at the item level. Unfortunately, most of this planning is typically done manually, intuitively or simply by historical learned habits by the operators because of, well, learned behaviors.

The lack of “science” is further compounded by POS systems that are intentionally designed to limit easy access to the data in order to maximize cross-sell/up-sell revenue; it’s the operator’s own data but typically she has to pay extra to get access to it! This is a classic area where technology, if made available and easy to use, can make a big difference in controlling food inventory costs, reduce food waste, and even help to do better menu planning around what is selling and what is not.

Another opportunity area is to use technology to better manage payments costs. This area has some fairly obvious and low tech mitigations such as paying closer attention to what is in the monthly payment processing invoice to eliminate junk fees. The reason unscrupulous payment providers pack unnecessary fees into their customers’ monthly bill in order to pad their profits is simply because they know they can since most restaurant operators don’t know how to read their statements, are too busy to do the analysis, or just accept it as the cost of doing business. All the while tens or hundreds of dollars leak away each month from their already net-margin challenged business.

Can you tell us a bit more about these fees?

There are some truly insidious fees, usually expressed in “non-compliance” terms that require some workflow and/or technology changes to modify. One such example is the new Visa rate category labeled, “Non-Qualified,” that will hit nearly every restaurant. This fee inherently preys on the accustomed workflow built into every POS system.

The usual process for restaurants to close a check being paid by credit card involves a two step process: first, run the card for the initial authorization, then, secondly, adjust the authorization amount after the consumer has added the tip amount and signed the ticket. The post-authorization adjustment that accounts for the gratuity is pretty much built into every POS system and restaurant’s workflow. Most restaurants fall into the “best rates” in the interchange system, such as Visa’s Custom Payment Service (CPS). However, under the new rules for post-authorization adjustment the restaurant would fail to get the CPS rate and instead would fall into the new interchange rate or Non-Qualified of 2.95%. So what does this mean? One restaurant owner I know has an average ticket of $70 and his tips average $15 since most people tend to round off their tip amounts to 0’s or 5’s, hence $15 average versus $12 or $14. He says that the majority of his credit card transactions are falling into the 2.95% Non-Qualified rate when he normally would pay 1.9%. This means the merchant is being penalized for a structural process re-enforced by the way his POS system works, i.e., the two step process, or because his customers are being generous. It’s outrageous!

What else can be done to reduce these fees?

There are several areas that operators can consider when trying to optimize POS costs and avoid “hidden” fees. I put quotes around “hidden” because there are cost savings that are usually not obvious and perpetuated by the POS dealer or the POS manufacturer. Some examples: proprietary equipment, custom configurations (which aren’t generally actually custom!), unnecessary software add-ons. One example of proprietary equipment is the private label receipt printer where one very large POS manufacturer insists that you must buy your receipt printers from them since they are the only ones certified to work with their POS. In reality this printer is just a private label version of printers that are generally available at half the cost from Office Max. Custom configurations can take many forms with one subtle example perpetuated by some POS dealers, aka value-added resellers (VARs) who add value by making the hardware configuration obtusely custom from the pin-out on the serial printer cable to the baud rates set in the receipt printer thereby ensuring than the operator is dependent on that particular dealer for on-going service.

Can you explain how your company’s platform improves the “pay at the table” experience?

Copper’s patented technology enables restaurant servers to check out at the table in two ways: First, self-service contactless method using a QR code automatically printed on the bottom of the final check that is presented to the customer. The customer then scans the QR code with their mobile phone similarly to when they scanned the tableside QR to see the menu. They see their check details, add a tip and then pay, all from the convenience of their own device; Copper supports all cards plus ApplePay, GooglePay, PayPal and a few other mobile wallets.

Alternatively, the server can present the customer with their bill via a Copper enabled wireless payment terminal where their details are present, tip is added by the customer and then a card tap, dip or swipe closes the transaction. All of this can be delivered by Copper with a simple 10- minute installation of the Copper smart Cord without the need to make any changes to the existing POS system and the workflow remains largely the same so little to no retraining of staff is required.

Who are your ideal customers and who is most likely to benefit from using Copper?

While Copper can be used by merchants of all types and sizes, our current focus is to serve the small and medium sized restaurant operator, from single location to regional chains with 5-50 locations. Large chains have the budgets to hire technology and business analysts team members. SMBs have many of the same needs but don’t have the budgets to “rip and replace” their POS systems to take advantage of cost saving and customer enhancing technologies such as fast and easy “pay at the table” or real time analytics and reporting to help plan and control costs. Copper is the low cost, fast and easy “smart upgrade” that delivers powerful features without the need to spend thousands more dollars to upgrade or change POS systems. The annual cost for the Copper services can be paid back through cost savings in payments and increased table turns in 10 weeks or less.

Do you have data yet that shows how your platform can save operators money?

Actual data cannot be shared since it is proprietary to Copper and the merchants we serve. However, the avoidance of EMV non-compliance penalties and Non-Qualified penalties are easy to calculate and immediately apparent to the operator when they review their next month’s payment statement.

What do you hear from your early adopters about your technology?

We are fortunate to receive both kudos and valuable feedback about feature improvements. Some kudos are: “paying at the table saves me so much time”; “the easy tip feature is a life saver because I’m making more money than before”; “I can easily see the savings in the monthly payments statements”; “I’m not sure I’m actually turning tables faster but my customers are thrilled with the convenience and ease of being able to pay at the table.”

Copper is a nimble enough company that we’re also able to respond to feature requests pretty quickly which makes our users very happy. For example, we’ve been able to add a “store and forward” capability which means lack of WiFi connectivity doesn’t interrupt service. We can also split a check into as many multiples as a table needs. We are also working on a “split by item” feature since that’s a frequent request.

You have an extensive background in the payments technology space — how has your experience helped you lead Copper?

The payments industry is intentionally and unnecessarily obtuse and still operates on “tribal knowledge” gained over years. My understanding of the various persistent issues that plague merchants, payments resellers and POS companies – some obvious and some intentionally hidden – have allowed me to guide our product roadmap and service offerings to address real problems in the market.

What kinds of challenges do you see ahead for restaurant operators?

Persistent challenges in managing costs, attracting and keeping customers and avoiding the next shiny technology (usually with hidden costs and exclusivity clauses) will continue to plague the industry. Running a restaurant, particularly for the small and medium sized operator, is a lifelong dream so it’s incumbent upon all of us to help them live that dream and avoid some of the potential nightmares.

Where do you think they should focus their efforts?

Let the baker bake and let the chef cook up fabulous meals. Do the work to understand technologies that can help save time, save money and deliver a great guest experience. There are many “order at the table and pay at the table” offerings in the market today that explicitly sell the value of eliminating labor. By pushing the work to the guest and eliminating the knowledgeable and engaging server then you diminish the restaurant experience; so, you might as well just run a cafeteria… I don’t know many restaurant operators that dream of running an efficient self-service cafeteria.