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After leading EML Payments (ASX: EML) for a decade including a tumultuous period involving European regulators whose effects are still being felt today, entrepreneur Tom Cregan has bounced back in the fintech space with the launch of a cashless digital tipping solution for hospitality.
The release of OnTheMonee follows a Zeller study published in October last year that found the average Australian tip grew 12 per cent year-on-year to $17.93, while the volume of tips as a percentage of total transactions had grown 132 per cent since January 2022.
Melburnians were found to be the biggest tippers, and incidentally that's where Cregan's new company is based. Nine months after exiting Brisbane-based EML Payments in July 2022, he founded Valorem in March 2023 with a view to change the way casual employees are paid in Australia.
"One of the big issues with tips is that so few people pay with cash these days," he says.
"I was talking to a senior waiter in a venue that is launching with us in February, and he said, ‘the only cash I see in my life is tips, otherwise everything else is in my phone, so this is a no-brainer'.”
In a LinkedIn post three weeks ago, he said that since founding Valorem had completed two acquisitions worth a combined $3.5 million, and raised $4 million in a Series A to "built a great team, with a massive focus on product development".
"After a successful pilot, our first product launches today, OnTheMonee - a digital tip payment solution for casual employees in the hospitality industry," said Cregan, adding more products would be launched in the coming months while Valorem was also set to kick of its Series B funding round.
"There are 2.5 million casual employees in Australia and the clear trend is for that to continue, but payroll systems have not kept pace with this change, and that is what we set out to disrupt," he said.
"After 10 years running EML Payments, it's been refreshing to get back to my startup roots and build something again from the ground up with a fantastic team."
The board of Valorem also includes Chemist Warehouse co-founder Jack Gance, Edge Loyalty founder Nick Sims, another former EML exec Andrew Betts, and commercial lawyer and founder of Fupay, Michael Fredericks. Cregan himself was also the founder of e-pay Australia which was sold to Euronetworldwide Inc for US$77 million in 2003.
The company claims the OnTheMonee’s venue portal is simple and intuitive for both venues and employees, saving time with venues able to simply and efficiently administer tips and pay them to their employees in real-time.
The 2022 Consumer Payments Survey highlights the ongoing decline in cash use in Australia has accelerated since the COVID-19 pandemic. The decline in cash use was especially pronounced for smaller payments, with cash now used less than electronic methods for all transactions.
"With OnTheMonee none of that matters because tips are calculated by the system based on an employee’s shifts and deposited directly into their personal digital wallet," adds Cregan.
"Best of all, it’s fully automated, so you don’t have managers tied up going to the bank to withdraw cash and looking after what is a low-value task for the business."
Several hospitality venues in Melbourne and Brisbane partnered with OnTheMonee in its three-month pilot phase, led by Kickon Group which is behind such venues as Pincho Disco in Collingwood, the Terminus Hotel in Fitzroy North, Brisbane's Plough Inn, and The Dock in Mooloolaba.
"Thanks to OnTheMonee, paying tips has gotten much simpler to administer," says Kickon Group CEO Craig Shearer.
"Plus, it’s much quicker for the team to have the money they've earned transferred straight to their digital wallet, which can be used immediately, instead of having to wait to pick up their cash from work."
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