September 16, 2013
Between Paypal, Stripe, Dwolla, Braintree, Chargify and BitCoin, there's a lot of innovation going on in the payments industry and everyone is trying to do their best to gain merchant acceptance and get market share. Spreedly is a startup focusing on offering solutions to customers on a cloud based credit card vault, with multiple payment gateways and competes for market share with the likes of Chargify and Recurly.
Spreedly was founded by John Carlin in late 2007.They have partnered with over 200 companies such as Wiliam, Insiteful, The Webshowroom, Synapse Worldwide, ITZ Australia and KAPTiV Media among others. Initially they started off as a subscription management service. However in October 2011, Justin Benson joined the team as CEO and moved the business model away from subscriptions to allow for one time transactions. Spreedly got the initial seed funding of $300,000 in December 2012 via AngelList and were able to establish their core product as a secured multiple gateway credit card storage service. On 1st March 2013, Spreedly went live.
Spreedly is a cloud based credit card vault that stores information independent of payment gateways. Clients have access to multiple payment gateways such as Authorize.net, Braintree and Beanstream. Its vaulting data accounts for more than 100,000 credit cards. Spreedly’s internal architecture is based on the Ruby on Rail ActiveMerchant which already has built in support for a large number of payment service providers.
According to Justin Benson, CEO of Spreedly, the credit card vault gives the clients independence from a single gateway. The unique factor about their vault is that the card can be presented to different gateways over time. It would cost $50,000 to $100,000 launch a business after building a PCI compliant vault and integrating multiple gateways which is not feasible for most startups. Spreedly’s starting plan accommodates 5000 cards working with 5 different merchant accounts at $50 a month. It works with 53 gateways in 71 countries.Pricing Plans Freedom Transaction Scaling Enterprise Card Storage Limit 5000 25000 100000 500000 Each Transaction Costs 4 cents 3 cents 2 cents 2 cents Gateway Tokens 5 25 250 1000 Each Additional Token Costs $10 $3 $2 $1.5
Table: Pricing Plan - Spreedly
The pricing charged by Chargify is mostly targeted to small business users, they have a Small business plan $129/mo which allows you to manage 500 customers and a New Idea plan $65/mo which includes 20 customers.
When discussing the future of Spreedly with regards to the payments industry, Justin Benson stated We see two big trends - peer-to-peer payments and non-credit card payment types. There are some really exciting new ways to make payments and disburse payments. Just as we've aggregated payment gateways into a simple, single API, look to us to try and take that same approach with disbursements or newer payment types. So, a website that specializes in renting high-end vacation homes around the world can today use Spreedly to ensure they can work with any payment gateway in a country that they transact in. Tomorrow they'll be able to use Spreedly to pay out the home renter via PayPal, ACH, Dwolla, GoCardless, Bitcoins or whomever.
LTP View: The simplicity of Spreedly’s service may put them on par with other competitors like Chargify and Recurly. Spreedly focuses on offering clients the ability to work with multiple gateways. Spreedly also allows the merchant’s to support multiple card payment types like PayPal, Dwolla, GoCardless etc alongside the credit card processing which may prove to be an advantage over others.