Can this new payment start-up be a success?

Circle Plus Payments provides a simpler technology that could appeal to retailers both big and small. The payments app allows anyone to accept any credit or debit card from around the world without the need for a POS hardware.

The app lets small businesses accept payments via a smartphone camera. But this would indeed require a user to use the traditional plastic card to enable the payment. Other services like Apple Pay are looking forward to eradicating the need of credit cards and push mobile payments into the mainstream. According to Forrester’s projections for U.S. region, mobile payment services would reach $90 billion in next three years. But it represents less than 1% of all consumer spending in the U.S.

So there is still a huge opportunity for services like Circle Payments Plus which would allow even street vendors to accept credit card payments through their phones and tablets. Circle is similar in nature to Square except that it won’t require a card reader to be jacked into smartphone or tablet. The company is looking forward to arrival of chip-and-pin cards. This would require merchants to upgrade to new hardware to accommodate chip-and-pins. But Circle will continue to work as it is.

The payments app allows merchants to easily set themselves up to accept payments. Merchants can simply add the service into their own bank account by simply scanning their own credit/debit cards. Although there are speculations regarding security and how well the service works but it can find a significant share in the world of plastic payment cards.

Services like Apple Pay would demand for more hardware upgradations like NFC based terminals. More to this, we see big time mobile wallet players tying up with branded retailers and merchants. But still small merchants do hold a significant market share and that’s where companies like Circle Plus Payments can make a mark.

But I doubt whether Circle Plus would be able to overcome certain challenges. A major hurdle that this payment technology feature will have is convincing customer of its reliability. The use of camera might make the customer sceptical regarding whether the merchant might take a snapshot of the card itself. Also there is the issue of multi-factor authentication which this service doesn’t highlight. With advanced options like biometrics available in other services, it can be an issue for Circle Plus.

Here is an illustration highlighting the service offered by Circle Plus Payments: