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Pay for Drinks at SXSW Using Your iPhone

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Now here’s a killer app for the throngs of geeks about to descend on Austin later this week: TabbedOut. The iPhone (s AAPL) application allows users to order, review and pay for their tabs at local bars. It sounds like the perfect fix for those full-to-the-gills parties SXSW is known for. Unfortunately, TabbedOut is only available at a limited selection of venues for now — just 35 in Austin, including popular SXSW party stops The Blind Pig Club, Beerland and Mohawk.

“Having just launched in January, the integration hurdle is where we are now,” said Rick Orr, CEO of TabbedOut maker ATX Innovation, in a phone interview. But the company is trying to make the most out of an influx of its exact target audience of smartphone users at crowded bars by releasing an Android app on March 15 and handing out three free tabs to all users in Austin during SXSW.

The way TabbedOut works is you store your credit or debit card account on your phone, then file your order through the app. It pops up on the merchant’s point-of-sale system for them to fulfill your order and accept your payment (right now TabbedOut is integrated with Future POS and Jumpware). Users pay a convenience fee of 99 cents.

The concept is similar to one of my favorite iPhone apps, Taxi Magic, which lets me hail and pay for cabs without dealing with a phone dispatcher, cash or credit cards for a $1.50 fee.

Orr said that TabbedOut’s next core locations will be New York, New Jersey, LA and the San Francisco Bay Area. ATX has raised a Series A round from investors including Trellis Partners and Raven Capital Partners.

SXSW seems like an opportune time for other payments startups to have their own coming out parties. We contacted Square — the mobile transaction company founded by Jack Dorsey of previous SXSW breakout success Twitter — to ask about its SXSW plans but haven’t heard back yet.

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19 Responses to “Pay for Drinks at SXSW Using Your iPhone”

  1. Met these guys today and saw it firsthand. VERY slick. They have android coming Monday. Didn’t seem like you can order but why would you want to order at a bar anyway. I’m officially impressed…now want it to hurry up and get to Dallas.

  2. So the 2nd paragraph is misleading as it states that you use it to order drinks. You don’t- you use it only to open and close your tab. Also, this won’t be popular if it’s only available for the iPhone, as in Gowalla had to be made available on many phone OS’s to compete with Foursquare.

  3. SXSW Fan

    VodkaorGin: I live in AUS and have used this on West 6th St. The bartenders don’t have to do anything – they just verify that the user’s tab is open on the point of sale system screen and check the tab’s code on the screen against a code on the iPhone. At the end of the night the user just pays and leaves and the bartender doesn’t have to do anything. It makes life easier on the bartender since he/she doesn’t have to waste time closing people out. The fee doesn’t pull cash out of the bartender’s pocket (not sure where that came from).

    Jody: SMS? You are joking, right? Ever hear of Obopay? They received something like $100m for a mobile payments service which was heavily SMS based. After all that funding the product has received no traction. I’ve never seen anybody use it.

  4. Huh. Wouldn’t an SMS version actually be more useful and open to everyone?!

    Total waste of time to limit this to the 5% of mobile phone users who actually have an iPhone. Obviously they aren’t interested in making the real money, which is in open services based on SMS and MMS.

  5. VodkaorGin

    As someone who has tended bar in the past, No bartender at a busy SXSW bar is going to deal with this.

    They’re not going to wait for you to dick around with your iPhone and pay the tab, and the 99 cent fee takes money right out of the bartender’s pocket.

    Good idea, terrible place to execute it. Don’t use in a bar, or you’ll look like a d-bag.

  6. Jacob Varghese

    The 99c convenience fee will kill it. Paying a dollar for the convenience of paying my bill without a physical credit card is kinda ridiculous?

    Either charge me something reasonable like $0.25
    or make it free for the consumer.

    This is huge from the marketing angle. They’re building up a database with my consumer history. The restaurants and bars would be able to market to me for repeat business.