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.
- The company’s valuation in September 2012 was $3.25 Bn. Square has processed over $100 Mn in credit card payments through its m-commerce platform.
- The new Square reader is 45 percent thinner than the previous version of the reader and more accurate than similar credit card readers in the market.
- It is a Point of Sale accessory which works with the Square register application.
- A custom magnetic readhead and spring which is thinner and more accurate than the alternatives.
- Custom electronics in a single chip, the reader is powered by the phone to which it is plugged eliminating the need for a bulky battery.
- Improved communications protocol and custom audio plug, which makes the Square reader compatible with other devices.
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 2013, Payleven became the first company to bring the Chip & PIN card reader to Europe, enabling customers to accept card payments on the go.
- The new card reader combines mobile CHIP & PIN technology for debit and credit card payments with NFC.
- It enables payleven users to accept contactless payments wherever they are.
- It will be offered for a much lower price (around €100) than other NFC card readers (around €400 – €700) present in the market currently.
- As with the existing payleven chip & PIN card reader, the NFC version is set to have no fixed costs, no minimum monthly payments and no fixed contract.
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:
- This is similar to Square’s device except that it can also be detached and used to make payments.
- It consists of a small audio jack device with a built in card reader to store the user’s cards encrypted into a secure memory module.
- A microprocessor and magnetic induction loop within the Fob is said to enable the user to transmit user’s card data to any merchant card reader.
- iOS and Android devices are compatible with the Loop Fob.
- The company says that Fob can transmit a user’s card data while attached to his phone.
- The device can also be used at bars or restaurants in detached mode.
- As a mode of payment, NFC has been having a hard time.
- Loop however makes use of magnetic induction to transmit data to a card reader.
- The ChargeCase boasts to be a protective case that delivers up to 60% more battery power for users than the iPhone 5s. An audio jack mag stripe reader is equipped with the ChargeCase.
- This enables the user to swipe all his magnetic stripe cards into the loop device.
- The ChargeCase works with 90% of the credit card readers according to company but not at ATMs or gasoline pumps.
- We saw some of the prototypes of the future ChargeCases that are going to be launched by Loop and they are much thinner and lighter.
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.
- Their system is simple and accessible i.e it only needs a special reader, replacing outdated and cumbersome POS-terminal.
- Users can download their free iOS or Android app and receive a free card-reader, which will enable them to securely transfer money directly from bank cards to his or her mobile phone.
- It connects to the users phone on iOS or Android via an audio port on the smartphone.
- According to the app description, it meets the PCI DSS requirements and the rules of both MasterCard as well as Visa.
- When users make a transaction using their Windows Phone and the card reader, the payee will then sign their signature on the touchscreen. After that they can choose to receive a receipt via SMS or email.
- The app lets small retailers and service providers such as taxis and coffee stands accept cards instead of just cash. It supports MasterCard and Visa, and also signature capture.
- LifePay’s set of mobile applications include mini-CRM system, enabling users with quality statistics and related analysis of all payments received.
- It also helps to predict the possible risks, which is extremely important for small and micro businesses.
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.
- Roam merchant self service management portal will help malls, restaurants, cafes, & small business owners to easily manage their business from one centralized location.
- Roamcm5 supports EMV-Europay, Mastercard and Visa at POS terminals for authenticating credit and debit card transactions, which will provide flexibility to merchants and business to look beyond the business geography and expands abroad.
- This easy-to-use portal provides merchants with the ability to board sub- merchants, customize receipts, issue refunds, export and analyze transaction data, and more.
- With this solution merchantshave the more control they need to successfully run their day-to-day business.
- ROAM can capitalise onIngenico reach outside USA which will help them in successfully deploying the ROAMmcm 5 outside the US.
- In 2009 Ingenico created Ingenico Ventures to invest in the mobile payment chain through the acquisition of minority interests (strategic investments in Roam Data).
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.
- SumUp’s model includes a free dongle that attaches to any Android or iOS enabled smartphone or tablet.
- It can then be used by an installed application to facilitate card payments and transfer money.
- The company targets a large variety of merchants and small businesses who currently do not have the facilities to take card payments.
- SumUp also focuses on business which are on the move e.g. mobile eateries, beech side shops and exhibition centres.
- It charges 1.95% per transaction and no monthly fee for merchants.
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.
- The costs associated with using PayPal Here's credit app and reader are reasonable, according the a number of customers.
- It's free to sign up for the service, and includes no monthly fees or contracts.
- Users will receive receive a free card reader in the mail within seven working days, if they sign up for PayPal Here directly via PayPal.
- The cost of using the card processing service is 2.7% with no additional transaction fees.
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.