Google Ventures funded Corduro: Universal Mobile Payments

With the mobile payment industry expected to grow to $721 Bn by 2017 (according to Gartner estimates), there are many new startups coming up in this domain. The myriad mobile point-of-sale solutions offer merchants the ability to process transactions on mobile devices. Mobile wallet offers consumers a place to store their payment credentials for seamless purchasing across multiple channels. One company which claims to be growing distinctly ahead in this segment is Corduro, a Texas based startup.

Corduro was founded in 2010 by Robert Ziegler, debuting with an investment from Google Ventures and Heartland Capital. The firm so far has nearly $4 Mn in total funding from Google Ventures, First Round capital, Founder Collective and others. The company has Dignity Health, AYSO, Habitat, PBS, among others in its clientele. BY 2013, Corduro has registered a contracted volume of 2 billion according to

Corduro offers mobile payment solutions as Software as a Service by integrating its two offerings PayMobile and Corduro Register. Corduro integrates big data, social media, POS and mobile payment processing into a single enterprise platform. Corduro products and mobile applications allow consumers to pay anywhere, anytime via any device.When paired with Corduro Register, for enterprise customers, PayMobile gives store associates the ability to interact with customers based on their profile entered into the digital wallets, including connecting to social networks, and handle transactions anywhere in the store.

To begin, users download the app, sign up, set up their digital wallet, connect with organizations, and then start making and accepting payments. PayMobile conveniently catalogues all receipts and uses passwords coupled with hardware encryption to protect all sensitive information. PayMobile users can instantly pay individuals, merchants, and organizations just by being present and Enterprises can accept those payments without disruption to existing loyalty, payment or business systems and processes.

Additionally, Corduro can deliver its solution alongside existing infrastructure, including payment and back-office systems, so merchants can set it up without having to integrate those systems immediately.

Corduro competes with industry players such as Braintree, Stripe and CyberSource. More specifically, Corduro competes with companies like Square on the merchant services side, and Quicken on the high-end enterprise side. However the key differentiator of Corduro from competitors is its pricing strategy. Overall, Corduro charges merchants 2.65 percent per transaction (2.5 percent for charities), compared to 2.75 percent for Square and 2.7 percent for Intuit GoPayment. It is a flat fee. Hand-keyed transactions (without a credit-card swipe) are 3.25 percent, versus 3.5 percent plus 15 cents per transaction for Square.

Corduro supports not only mobile payments, but also online and traditional storefront point of sale systems. Businesses can even connect it to their existing merchant accounts instead of setting up a new account. Information available through the PayMobile wallet can also be fed into marketing efforts that merchants can use to target their customers, offering loyalty and discount programs. However, according to Ziegler information made available through the PayMobile wallet is controlled by consumers and consumers are very clear about what data is being shared.

With a continuous focus on enterprises rather than small shops, Corduro may be going in the right direction. But most of the mobile payment startup are struggling to survive as they need the widespread adoption of new hardware, such as a credit card reader, to support a sale at a store. Also with a whole lot of technical features, Corduro’s challenge will be to explain all the options it offers to merchants, and to win mindshare in the increasingly crowded mobile payments market because customer want ease of use. Another generic problem with mobile payment systems are the connectivity issue. These cannot work in areas having low signal strength.

LTP View: With established players like PayPal which has a big head start in this area, and start-ups like Square that are transforming the way merchants accept payments, there are still opportunities for Corduro to innovate here by aiming at specific areas or stepping back and building broader solutions. The challenge will be to get in front of consumers and merchants and explain the benefits of the system and win the trust of consumers.