Startups: Paydiant’s mobile payments platform
Taryn Plumb, Special to the Journal
W. Marc Bernsau
Although estimates indicate that there are more cell phones in use in
the U.S. than there are people, employing them as a viable payment
method in day-to-day transactions has been a challenge.
Those on both sides of the process — consumers as well as banks and retailers — worry about security and privacy, while the institutions have further concerns about infrastructure and implementation.
But even so, many see a well-earned spot for phones at the checkout counter.
Chris Gardner, co-founder of mobile payments platform provider Paydiant Inc., acknowledges that “it’s something that will take time.” The Wellesley-based company’s ultimate aim is to help usher in that shift, he said.
Founded in 2010, the company offers a cloud-based, white-label mobile payments platform. Working with smart phones and existing point-of-sale systems and payment terminals, it allows banks, retailers, and processors to accept “contactless” payments and cash access requests through their own branded apps — so consumers don’t ever see, or interact with, Paydiant.
Compared to some of its competitors who have “Visa envy,” Gardner said, “we’re creating a network, but we don’t want to be the sticker on the door.”
But beyond the draw of the white label, Gardner noted the versatility of the technology — it can do near field communication (NFC), and it also works with QR codes — as well as the high level of security applied to each transaction. The security aspect, he said, makes it particularly appealing to banks.
Paydiant has attracted some big-name customers and partners so far, including FIS Global, Capital One, Bank of America and Vantiv. The 50-person company is also backed by $24.3 million in funding — the most recent being a $16.7 million Series B round, announced in July. The round came from Stage 1 Ventures, North Bridge Venture Partners and General Catalyst Partners. Going forward, there appears to be substantial room for growth.
On a worldwide scale, research firm Gartner estimates that mobile payment transaction values will total more than $171.5 billion this year, a 61.9 percent increase over 2011, according to a press release. The firm expects the market to average 42 percent annual growth through 2016, when it forecasts it will be worth $617 billion.
Mobile payments could in fact become the payment method of choice in the future, according to Beth Robertson, director of payments research at Pleasanton, Calif.-based Javelin Strategy and Research. But ultimately, she said, “we have a significant way to go to get the infrastructure in place for both merchants and consumers, and to determine which models will be successful.”
Paydiant, of course, has big goals for its platform, and for mobile payment methods at-large. “We’d like to get our ecosystem and our acceptance method broadly deployed,” Gardner said.
Still, he’s realistic, saying that he expects a slow evolution. Also, he and others predict a progression beyond transaction fees, with more of a focus in the future on the data of transactions — what he called a “valuable asset.”
Ultimately, “changes in the payments industry take a while,” he said.
Original story link here.
Those on both sides of the process — consumers as well as banks and retailers — worry about security and privacy, while the institutions have further concerns about infrastructure and implementation.
But even so, many see a well-earned spot for phones at the checkout counter.
Chris Gardner, co-founder of mobile payments platform provider Paydiant Inc., acknowledges that “it’s something that will take time.” The Wellesley-based company’s ultimate aim is to help usher in that shift, he said.
Founded in 2010, the company offers a cloud-based, white-label mobile payments platform. Working with smart phones and existing point-of-sale systems and payment terminals, it allows banks, retailers, and processors to accept “contactless” payments and cash access requests through their own branded apps — so consumers don’t ever see, or interact with, Paydiant.
Compared to some of its competitors who have “Visa envy,” Gardner said, “we’re creating a network, but we don’t want to be the sticker on the door.”
But beyond the draw of the white label, Gardner noted the versatility of the technology — it can do near field communication (NFC), and it also works with QR codes — as well as the high level of security applied to each transaction. The security aspect, he said, makes it particularly appealing to banks.
Paydiant has attracted some big-name customers and partners so far, including FIS Global, Capital One, Bank of America and Vantiv. The 50-person company is also backed by $24.3 million in funding — the most recent being a $16.7 million Series B round, announced in July. The round came from Stage 1 Ventures, North Bridge Venture Partners and General Catalyst Partners. Going forward, there appears to be substantial room for growth.
On a worldwide scale, research firm Gartner estimates that mobile payment transaction values will total more than $171.5 billion this year, a 61.9 percent increase over 2011, according to a press release. The firm expects the market to average 42 percent annual growth through 2016, when it forecasts it will be worth $617 billion.
Mobile payments could in fact become the payment method of choice in the future, according to Beth Robertson, director of payments research at Pleasanton, Calif.-based Javelin Strategy and Research. But ultimately, she said, “we have a significant way to go to get the infrastructure in place for both merchants and consumers, and to determine which models will be successful.”
Paydiant, of course, has big goals for its platform, and for mobile payment methods at-large. “We’d like to get our ecosystem and our acceptance method broadly deployed,” Gardner said.
Still, he’s realistic, saying that he expects a slow evolution. Also, he and others predict a progression beyond transaction fees, with more of a focus in the future on the data of transactions — what he called a “valuable asset.”
Ultimately, “changes in the payments industry take a while,” he said.
Original story link here.
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