May 5, 2014
These days’ small business owners are taking the non-traditional approach and signing up with mobile POS providers to receive cashless payments. A recently published report, by a global Fintech focused research firm Knowledgefaber, on POS Penetration in US, Canada and UK reveals that in US, about 63.5% merchants have adopted POS, and have about 1.90 POS per merchant store.
Lot of small merchants, and even mid-sized ones are looking for mPOS systems because of the cost effectiveness, functionality, and easy implementation. While the conventional POS market is shrinking at a rate of -2.5%, mPOS is growing at a rate of 9.2% while contactless POS is growing at 81%. Some of the companies offering mPOS, Chip and Pin Solutions have been described here:
The total mPOS penetration in U.S is around 1.7 million+ devices (card readers) of which Square has sold more than 70%. As most of you know, Square is a San Francisco based company in the area of merchant services aggregation and mobile payments. It is backed by investors such as Marissa Mayer, Kevin Rose, Biz Stone, Dennis Crowley, Shawn Fanning, Ed Cramer, MC Hammer, and Esther Dyson.
The company has also raised several additional rounds of funding:
Series A funding from Khosla Ventures.
Series B funding from Sequoia Capital.
Series C funding from Kleiner Perkins Caufield & Byers.
Total Funding till date: $341 Mn.
On 19th March 2014, Payleven announced the launch of an NFC based mobile Chip & PIN card reader – to be deployed in the European market during the second half of 2014. Payleven is a provider of mobile card payments. Based on a ‘plug and pay’ principle, payleven merchants can provide their clients with chip & PIN debit and credit card payments via their smartphone or tablet devices.
In October 2013, Loop had announced the introduction of a new payment enabling technology. It tricks the POS card slot into believing somebody is actually swiping a card. Its called Magnetic Transmission Technology (MST). It consists of a smartphone app and a fob/chargecase that uses magnetic field technology to enable customers to make payments in-store. On 20th February, 2014 the company publicly launched its Loop Wallet iOS Application in the U.S.
Loop is led by Will Graylin (CEO) who had previously founded WAY Systems and ROAM Data, and George Wallner (Formerly, CEO of Hypercom). The company closed a $10-$12 Mn Series A funding from undisclosed investors in December 2013, which includes many high-powered CEOs, including people from the payment industry according to Graylin. Loop offers two products:
LifePay, considered the ‘Square’ of Russia, was founded in 2012 by Vyacheslav Semenchuk (CEO). The management team includes Andrey Pavlenko (CTO), Angelica Sheshunova (COO) and Irina Zayceva (CMO). The company has received a total funding of $2.6 Mn through Life.SREDA in 2012.
LifePay is a service that enables anyone to accept credit cards anywhere. LifePay offers an easy to use, free credit card reader that plugs into a IPhone. Their new app for Windows Phone lets users take their card reader to create an mPOS terminal anywhere they are, to accept credit cards.
JUSP is an emerging mPOS company with a proprietary all-in-one chip-and-pin card reader, which connects directly to smartphone and tablet audio jacks. The company is gaining momentum on many fronts. It has secured a $6 million equity round with two Italian venture capitalist firms, making the equity one of the biggest rounds in Italy in 2013.
Lets Talk Payments Interviewed Stefano Calderano, who heads JUSP as an investor and CEO. JUSP has come up with a Chip and Pin mobile card reader that connects to the audio jack of the phone. He has also worked with companies like BNP Paribas, McKinsey, Roland Berger Strategy Consultants, in retail and banking sectors.
ROAM Data, an mPoS company from Boston, MA provide end-to-end solutions, covering the entire spectrum of mobile payments requirements. ROAM was co-founded by Michael Arner and John Rodley. ROAM is currently headed by Ken Paul, CEO of ROAM.
ROAM launched its ROAMmcm 5 recently. It is one of the few enterprise-ready mobile point of sale (mPOS) solution and is EMV-ready, which enables businesses to quickly deploy and centrally manage global mPOS environments. ROAMmcm 5 was demonstrated for the first time in the U.S. at NRF in New York City earlier this month.
The high transaction fees charged by banks (over 2% per transaction) usually dissuades mid-size vendors from using credit card POS machines for their business. SumUp, a Berlin based mPOS startup, is targeting small and mid-sized vendors and businesses. SumUp is taking advantage of continued absence of competitors and incumbents to acquire small to mid-size merchants.
SumUp was Co-Founded in 2011 by Daniel Klein (CEO), Marc Christ (CSO), Petter Made (COO), Stefan Jeschonnek (CMO) and Jan Deepen (CCO). The company acquired funding of $20 Mn from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels in 2012.
Released in 2012, PayPal Here is a credit card reader and accompanying app that enables businesses and individuals to accept a wide range of payments on Android devices and iOS devices. Last month, the company announced a revamped version of the PayPal Here app, to work with chip and PIN cards.
Swipely, a Rhode Island company, was founded in 2009 by Angus Davis. They received $1 Mn, Angel funding in 2009. In 2010 Swipely acquired $7.5 Mn through investors such as Index Ventures, Greylock Partners, First Round Capital, Charles Moldow, Emil Michael, Angus Davis etc. (total 11 investors). In series A funding. The company further received $7.5 Mn from Shasta Ventures, Reid Hoffman, Danny Rimer and Josh Kopelman in series B funding in May, 2013 bringing their total up to $20.5 Mn. Swipely says that it is an easier way for local merchants to accept payments, understand customers and grow revenue with valuable analytics, loyalty and marketing tools. Swipely doesn’t install any new equipment. It integrates the existing POS at merchant site with internet to capture transactional data which is later used to give meaningful customer insights using analytics.