In a regular credit card transaction, middlemen takes away 2% to 5 % from every transaction. ArgoPay, a startup claims to have developed a system to forego the need for these middlemen by acting as a virtual wallet and a mobile payment network.
ArgoPay claims to be a "credit card" that is completely virtual while creating a mobile payment network. The company says it eliminates all of the credit card processing fees and is easy, fast, and completely secure. ArgoPay claims to collapse the payment stack and provide an all-in-one experience by having ties with Visa, CapitalOne, FirstData, SquareWallet, VeriFone & Authorize.net.
ArgoPay claims to be disrupting the payment system, eliminating intermediaries when you use ArgoCredit:
A virtual credit card is issued to the user when he downloads ArgoPay application.
There is no need for any additional dongles or hardware.
Resulting in 0% transaction fees for merchants.
Merchants are also provided with access to a loyalty program for their best and recurring customers.
They are enabled to send offers to prospective customers who could become a loyal consumer.
Consumers earn rewards with each ArgoPay purchase.
The closed beta is currently opened for consumers and merchants on the argopay website.
ArgoPay’s rewards program, ‘Argo Rewards’ allows merchants to create and manage customized customer loyalty and offers program. The company collects a 30% fee of redemption value when a customer redeems a loyalty reward or incentive offer.
The company stated that starting October 16, 2013 the next 1000 merchants to sign up for ArgoPay account would receive the ArgoRewards platform benefits with no charge for the first year. The next 10,000 customers to register would also acquire 5% cash back during the first year for everything they buy through ArgoCredit.
Igor Ostrovsky, CEO, ArgoPay said "We are excited to launch this private beta. Having owned small businesses I know how expensive credit card processing fees can be to a merchant. And because we don't have to share our network with other intermediaries we are able to deliver greater rewards to consumers." The company said that the first rollout would be in Boston. It would also be released by late Q1 on 2014 in other areas.
LTP View: This new innovation seeks to replace the traditional credit cards which are widely used by U.S citizens. No fee for transactions could see a wide acceptance among merchants who are hampered by large fees from credit card companies. Combining loyalty program along with their offering may have added uniqueness to ArgoPay.