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 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 plans to target large variety of merchants and small businesses who currently do not have the facilities to take card payments. SumUp also plans to target business which are on the move e.g. mobile eateries, beech side shops and exhibition centres. SumUp charges 1.95% per transaction and no monthly fee for merchants.
SumUp has tied up with Revel Systems, an iPad-based tills provider. Revel Systems provide i-pad tills (digital menu cards) to more than 1,000 chain stores and restaurants throughout the U.S., Canada, Australia and Saudi Arabia. This collaboration came into existence as it plans to expand its operations in Europe. Similarly it has tied up with the domestic Taxi provider Taxi.de for processing card payments in the cabs using driver’s smartphone.
iZettle, Payleven, MPowa, JUSP, Square and PayPal are some of the major players in this space. iZettle charges 1.50 – 2.75%(depending on volume) per debit/credit card transaction whereas Payleven charges 2.75%. Neither of the companies charge a monthly fee for merchants. 4 UK startups to watch out for in the mobile payment space have been covered by Lets Talk Payments here.
SumUp recently partnered with Blueface, to launch a card reader that works by connecting to an iOS or Android device through an audio Jack and is controlled by a free app.
LTP View: SumUp has advantage over its competitors iZettle and Payleven in terms of pricing for merchants. This could see adoption from a segment of small and medium businesses. SumUp operates in 11 E.U. countries and has backing from major establishments such as American Express, Groupon and BBVA (Global financial services).