Ker-ching...Er, ZZZWIP: Square-alike mobile swipe type scores $96m
British Bluetooth gizmo startup pushes card-slurper for tiny biz
Sitting above what used to be Laskys in London's Tottenham Court Road is a British mobile money startup which has just raised almost $100m in its second round of funding.
Powa, together with its mobile products mPowa and Powatag, provides a system for retailers to both take payments and mine information about their customers.
If you put something into a basket with an online shop without completing the purchase and then walk into retail branch they will spot that you are the same customer and ask if you want to take those items then and there.
The mPowa Bluetooth gizmo essentially turns smartphones and tablets into cashless tills. Much like the product of swipe reader firm Square mPowa is touted as The Future Of Retailing. The gizmo attaches to the retailers phone via Bluetooth – although unlike Square it supports Chip & Pin as well as swipe, so making it useful outside of the US.
It’s perfectly possible for UK retailers to still take swipe payments but they become responsible for any fraudulent transactions whereas with Chip & PIN, stolen cards are the responsibility of the payment processing company.
The hardware, which shares the mPowa name with the associated service, has cost $20m to develop, much of that being down to the cost of testing and approvals.
The group is staffed by 50 people who all once worked at point-of-sale hardware manufacturer Verifone. Powa’s CEO Dan Wagner describes the Atlanta office as a “mini-Verifone”.
Unlike the Verifone devices the mPowa does not have a cellular connection, nor does it have a printer. Both of these functions are left to external devices, although Wagner expects that customers will ultimately prefer to get receipts by SMS or email.
The aim of the company is to take on the ecommerce and point-of-sale industries at the same time. The secret ingredient in all this is the integration of image recognition technology which will run in a smartphone app and allow customers to order directly from print advertisements without needing the advertiser to change the copy.
The transaction can be completed as either online or by going into a local retailer and collecting the goods. So if you saw an advert for a Nokia phone, Nokia might fulfil directly or send you to the local phone shop, which will have it waiting for you, with the payment having already been taken.
The Powatag part of the solution allows any retailer bought into the ecosystem to track your habits and preferences much like an online store: “Customers who bought nappies also bought baby wipes”, or “when you were online you looked at these products would you like to buy them now”.
The key to this is a proprietary technology – Powatag – which is not NFC and about which Wagner will not reveal any details, but which tells the retailer who you are as you approach the checkout. Wagner sees this as great customer service and not in any way spooky.
The company has 650 deployments of its ecommerce platform and distribution agreements with a number of major players but this is pretty small beer for the scale of investment.
The $96.7m came from Wellington management, a fund of $834bn which apparently does not often invest in private companies. It is the second investment Powa has received from the same fund.
The money will fund a "significant expansion programme", which means that in a few weeks the Powa gang will move out of the Tottenham Court Road offices to take up three floors of an office block in the City. ®