FoodsUp Case Study | Restaurant Supply Platform Case Study

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Products

Payments

eLinx

Digital PAD

Business Process Automation

Rails

EFT

Use Case

Restaurant Supply Platform

Integration Time

4 weeks

Intro

FoodsUp, a leading online food service supply platform based in Toronto, has quickly become a go-to resource for over 8,500 medium and small restaurants across Ontario and Quebec. The company’s rapid rise, marked by a staggering 600% revenue growth over three years, is a testament to its compelling value proposition and operational excellence. A key factor in this success has been the strategic integration of VoPay’s Fintech-as-a-Service into FoodsUp’s core operations.

What sets this case study apart is how FoodsUp leverages VoPay’s financial technology to drive efficiency and innovation in the supply chain sector. In an online environment where speed and accuracy are crucial, having the right technology is not just an advantage—it's a critical necessity.

The Problem

1. Standing Out in a Competitive Market While Minimizing Operational Costs

In a traditional market dominated by conventional supply chain practices, FoodsUp set out to disrupt the status quo by operating online. While this approach offered a high-value alternative to established players, it also presented unique challenges. To gain a competitive edge, FoodsUp needed to identify efficiencies overlooked by competitors and implement scalable, online-specific solutions.

2. Costly Payment Solutions

Traditional payment methods were not aligned with FoodsUp's digital-first strategy and were expensive both in terms of direct costs and workforce time. Cash and cheques, which some customers still preferred, created disruptions in cash flow management and required manual processing, which was inefficient for an online platform. As a result, FoodsUp was primarily limited to credit cards as their sole online payment option.

3. High Transaction Costs

Credit card fees, often exceeding 2%, significantly impacted FoodsUp's profit margins. Unlike larger competitors such as Costco, which could reduce these fees through proprietary payment methods, FoodsUp had few options to manage these high costs, directly affecting their bottom line.

4. Limited Payment Flexibility

Relying solely on credit cards constrained FoodsUp and its merchants, offering them limited flexibility in payment options. This restriction not only affected operational efficiency but also hindered customer satisfaction by not accommodating diverse payment preferences.

5. Operational Strain and Inefficiency

Many FoodsUp customers continued to use cash or cheques upon delivery, which increased operational costs and reduced efficiency. Processing these payments manually took the finance team approximately three minutes per order. With over 900 orders daily, this led to nearly ten hours of low-value, labour-intensive work each day, diverting resources from more strategic activities.

The Solution

• EFT Bank Account Payments: Bank account payments layered with VoPay’s financial technology greatly surpass the features and functionality that banks can offer. This high-volume, high-limit payment method was the ideal credit card alternative FoodsUp needed. Through VoPay’s API, FoodsUp was able to provide merchants with a complete digital-first experience.

• Payment Automation: By integrating VoPay’s account-to-account payment technology, FoodsUp significantly automated its financial operations. The technology eliminated the need for manual intervention in critical tasks, such as invoice matching, payment tracking, and reconciliation, streamlining processes and reducing errors. This automation allowed FoodsUp to focus on more strategic activities, optimizing resource allocation and reducing operational costs.

• eLinx^™ and Pre-authorized Debit: With VoPay’s digital PAD and proprietary eLinx solutions, 32% of FoodsUp merchants were quickly and effortlessly onboarded. The pre-built eLinx experience allows merchants to connect their bank accounts through a straightforward, error-free workflow, reducing administrative workload and enhancing accuracy.

How PAD Payments Work for FoodsUp Customers
1. Authorization: Customers authorize a PAD agreement directly on the FoodsUp platform.
2. Bank Account Connection: Customers securely connect their bank accounts by entering their online banking information.
3. Tokenization and Recurring Payments: VoPay tokenizes the data and securely returns it to FoodsUp, enabling them to automate recurring payments seamlessly every time customers place an order.

• White-Label Payment Gateway: VoPay’s white-label payment gateway offers a customized iFrame embedded within FoodsUp’s platform, providing a seamless and branded payment experience from start to finish. This secure solution enhances customer trust and loyalty while maintaining brand consistency.

• VoPay Account Portal: VoPay’s client dashboard delivers real-time payment transparency and data insights, allowing for better cash flow management and overall operational effectiveness. This comprehensive view ensures that FoodsUp can make data-driven decisions.

The Results

• Cost Savings and Resource Optimization: VoPay’s financial technology has levelled the playing field, empowering FoodsUp with the tools needed to thrive in a fiercely competitive market. By integrating VoPay’s Fintech-as-a-Service into its operations, FoodsUp successfully reduced operational costs by 20% and enhanced resource optimization and productivity by an additional 15%.

"We are using VoPay’s financial technology to take that leap ahead. Competing with industry giants like Costco, especially when they have their own credit card solutions, requires a different approach. You need to differentiate yourself in terms of product, price, service, and offerings. For us, VoPay’s financial technology has been the key to gaining a competitive edge."

Charley Chen, CFO, FoodsUp

• 20% Cost Reduction: By reducing its dependence on credit card transactions, FoodsUp achieved significant savings in transaction fees, directly enhancing its profitability. Processing over $3.2 million through VoPay’s API has allowed FoodsUp to eliminate around $64,000 in fees. These ongoing savings will continue to make a substantial impact on their bottom line over time.

3.2 million dollars is processed using elinx and Pre-authorized debit bank account payments, eliminating $64,000 in transaction fees.

• 15% Increase in Operational Excellence: The automation provided by VoPay’s technology has allowed FoodsUp to reallocate 15% of its workforce from low-value tasks such as invoice matching, payment reconciliation, and payment processing to more strategic, value-driven activities. This shift has not only reduced operational strain but also improved overall efficiency and employee productivity.

• Scalability and Growth x 10: In less than a year, FoodsUp has increased its transaction volume tenfold using VoPay’s payment technology. By automating its financial operations, FoodsUp gained the scalability to manage a rapidly growing customer base and higher transaction volumes. This newfound scalability has allowed FoodsUp to expand its market presence and compete more effectively against larger industry players like Costco. VoPay’s solutions have given FoodsUp the agility to grow while preserving operational efficiency and cost-effectiveness.

"Because VoPay supports all kinds of APIs, we were able to do some amazing things."

Charley Chen, CFO, FoodsUp