At CamboFlare, an Asian fusion restaurant in Big Lake, Minnesota, customers can pay with cash, by credit card, with major cryptocurrencies and soon with CamboCoin, a cryptocurrency created specifically for the restaurant.
Since the restaurant opened in November 2020, it has accepted bitcoin, bitcoin cash, Ethereum, and Dogecoin payments. It is now one of the only restaurants in Minnesota, according to owner Mike Nget, that is taking this step.
But at CamboFlare, so few people pay in crypto that the restaurant offers discounts of 10 to 50 percent to those who do. Even in a small town like Big Lake, with 10,000 residents, Nget said some people are catching up to cryptocurrency and realizing they can safely pay for fried rice with a small bitcoin payment.
"There aren't many restaurants that accept bitcoin to begin with, and I thought, let's break down the barriers," Nget said. "Let's be one of the first in Minnesota to start doing that and pave the way to shine a light on cryptocurrency"
Across the country, some restaurants have recently adopted cryptocurrencies as a payment method, along with cash and credit cards. Others are taking the cryptocurrency craze one step further.
The Flyfish Club, set to open early next year in New York City, is the first private dining club where members join by purchasing a non-fungible token (NFT), essentially a certificate of authenticity using a unique string. of characters connected to a chain of blocks. Memberships sell for 2.5 Ethereum (about $7,557 today) per Flyfish token, while the Omakase token (which gives members access to the club's 14-seat omakase room, which features tasting menus designed by a master sushi chef) sells for 4.25 Ethereum, or $12,847 today.
โBetween being a new innovation and turning a membership into an asset and all this hype around crypto in the world, as well as trying to find new ways to monetize, as well as an industry that was usually in need of some kind of innovation, which just created this ball of fire that made us very excited,โ said David Rodolitz, founder and CEO of the Flyfish Club.
Although few US restaurant chains accept cryptocurrency as a form of direct payment, some do accept cryptocurrency used as payment in restaurant apps. Starbucks customers can use digital assets like bitcoin as payment through Bakkt's integration into the Starbucks app, Nicholas Sampogna, a spokesman for Starbucks, wrote in an email.
future earnings
But crypto is precarious enough that independent restaurants that accept it often cap prices on purchases due to market volatility and focus more on their potential profits down the line.
Ocean Blue, a cashless restaurant and oyster bar in Utica, New York, only receives a few cryptocurrency transactions a month. Owner Francis Pezzolanella said accepting cryptocurrency has allowed the restaurant to reprioritize its time.
โIt's not as simple as me taking your cash. It's not as simple as taking your credit card,โ Pezzolanella said. "But what it has done is allow our staff to spend more time looking after our customers."
At Golden Steer Steakhouse in Las Vegas, few customers have purchased a meal in crypto since they began accepting it in December 2021, managing partner Nick McMillan said. He attributed this to the โbloodbath the crypto market experiencedโ in early 2022, as well as the decline in tourism in Las Vegas due to the omicron variant. However, he said that he reminds him of the optimism surrounding the advent of the Internet.
"I think we like that way of thinking," he said. "Not everything is going to work out, but we want to try to think creatively as much as we can."
growing hesitation
Restaurant owners also find it can be expensive to pay with cryptocurrencies. Because restaurants accept very small payments of just a few dollars per order, sometimes transaction fees called gas fees can cost more than the price of a meal when paid in Ethereum, according to Scott Kominers, associate professor of management. business at Harvard Business School. These fees compensate crypto miners for the energy needed to verify transactions, similar to Uber boost prices. He said that typical crypto wallets, where cryptocurrencies are safely stored, lack the โsecurity and accessibilityโ that many are used to at banks.
โA restaurant may find that the vast majority of their customers are not even ready to do crypto transactions, so there may not be as much value in adding that as a mode of payment,โ he said.
But Kominers said that over time these transactions will not be as expensive or cumbersome. While he sees stablecoins, which are cryptocurrencies pegged to a foreign asset like the US dollar, as becoming a "great complement" to other payment methods, high volatility deters mainstream crypto transactions.
"There's a lot of risk in accepting payments on an extremely volatile asset because those payments could end up being worth a lot less tomorrow or the day you need to pay your staff," Kominers said. โUnless you start doing your crypto remittance as well, that means you could pay more or less than you expected.โ
Potential Associations
To encourage diners to pay with bitcoin, payment service provider BitPay has partnered with dozens of larger restaurant chains, including Ruth's Chris Steakhouse and Red Lobster, and smaller places like Formento's and The Bristol in Chicago.
Merrick Theobald, vice president of marketing at BitPay, said more restaurants have adopted crypto payments because they are typically quick with next-business-day settlement and cost little in fees, opening up more potential sales for businesses. People who pay with cryptocurrency are also more amenable to tips, he said.
But high turnover and constant training of employees to accept cryptocurrency payments may deter some restaurants, Theobold said. That's because employees often don't understand how crypto works. Also, because BitPay is not integrated into point-of-sale systems, allowing businesses to accept payments and track sales, some restaurants find crypto payment systems too confusing. Restaurant owners who are willing to take these risks tend to be younger owners who see crypto as part of the physical world, not just online.
โThey don't expect 50 percent of their sales to be in crypto,โ Theobald said. "But if they could get the 1 percent, 3 percent, 5 percent or even one big event for the whole year, it would be worth it."
Go further
Some restaurants have embraced cryptocurrencies beyond simple payment to publicize their capabilities. Ricardo Varona opened Crypto Street Restaurant in Clearwater Beach, Florida, decorated with cryptocurrency-inspired art and serving Latin-inspired dishes like Crypto Cuban and Shiba Shrimp Cocktail. Since he opened the restaurant, a few dozen people have paid with cryptocurrencies, including some in Dogecoin. However, Varona has helped people sign up for platforms like Coinbase or find courses to get more involved in the world of cryptocurrencies.
โEspecially for people who invest in cryptocurrencies, what we are doing is helping promote cryptocurrencies and helping people who don't know much,โ Varona said. "We can talk to people on a simpler, more basic level."
Varona stated that in a perfect world, the restaurant would operate solely on crypto payments. The restaurant will soon have an ATM where diners can buy cryptocurrencies in cash.
For Priscilla Sotelo Klisch, owner of Le Petit Jardin French bistro in Los Angeles, taking crypto has a deeper meaning. The restaurant began accepting crypto payments in 2014, perhaps one of the first restaurants in California to do so, because her mother was passionate about technology. The restaurant stopped accepting crypto payments for a few years while her mother was ill, and after her death, Sotelo Klisch reinstated crypto payments.
The restaurant still accepts crypto as an โexperimentโ due to its volatility and transaction flaws, and has instituted price caps on larger bills paid with crypto. While remaining conservative in her approach to minimizing potential risks, Sotelo Klisch believes more restaurants will embrace crypto once they understand its safety and usefulness.
โI think hopefully when the economy starts to pick up a little bit, it might be something where small businesses start to become more open to creative and risky ideas,โ Sotelo Klisch said.
