Blackbird Labs, the restaurant loyalty platform founded by Resy and Eater co-founder Ben Leventhal, announced the launch of Blackbird Pay, a system that will allow participating restaurants to accept payment in cryptocurrency.
Blackbird, backed by American Express and Andreessen Horowitz (a16z), raised more than $24 million last year amid a wider mania around Web3. The initial pitch for the platform – available in New York, San Francisco and Charleston – was to provide diners with a way to earn rewards and exclusive perks from some of their favorite restaurants.
For the notoriously finicky restaurant business, the platform aimed to drive traffic and deliver new streams of revenue.
The new payments platform expands on Blackbird's mission by allowing consumers to pay for their meals using the $FLY cryptocurrency. The tokens can be earned as loyalty points for dining at participating restaurants or purchased in the Blackbird app using Coinbase's popular USDC stablecoin .
The restaurants may also have an incentive to participate, since they could avoid merchant card fees.
"Lower than typical credit card fees, which can be as high as 3.75%, restaurants on the Blackbird Pay network pay a flat fee of 2% per transaction, saving them money on every transaction," Blackbird Labs explained in a statement shared with CoinDesk. "At the same time, Blackbird Pay enhances diners’ end of meal experience by enabling them to skip the dreaded ‘Let’s get the check’ moment and enjoy the magic of paying their check in-app at any point; so, they can leave whenever they’re ready, just like having an old-school house account."
It's all powered by the new Blackbird Mainnet, a layer-3 blockchain based on top of Coinbase's Base chain . Base, a so-called layer-2 network , offers users a fast and cheap option for transacting on the popular Ethereum blockchain.
Blackbird's co-founder, Leventhal, has spent two decades in the restaurant industry and previously founded Resy, the reservation platform, and Eater, a major food-focused media outlet.
In an interview with CoinDesk, Leventhal described restaurants as a "humongous industry made up of tiny players." Unlike airlines and hotels, which are dominated by large players, restaurants "don't have leverage individually," said Leventhal, which is why they are so rarely profitable.
Read more: Blackbird, Crypto Restaurant App, Raises $24M in Funding Led by A16z
"For me, the best restaurants are not necessarily the ones with four stars, but the ones where you walk in and you just immediately understand you're in exactly the right place, and there's no place better for you to be at that moment," said Leventhal. "As good as they are at all that, they're just terrible in terms of managing profitably."
"It's impossible to predictably grow revenue, and they're paying a lot of fees for a lot of things on the technology side. In particular, the fees that they pay for processing are incredibly high," Leventhal continued. "That's where Blackbird comes in. We are endeavoring to build a platform in partnership with the restaurant industry that's focused on rewards and payments, and we think those are the levers to really creating massively improved operating margins and massively improved strategy."
