The race to find the mobile payments solution that works best for every type of business is on, and San Francisco-based Flint Mobile thinks it has the ideal offering for small businesses who operate mostly on the go. Flint’s new app for iPhone debuts today, enabling mobile transactions via a smartphone’s camera and a customer’s payment card, including both debit and credit options, requiring no extra hardware. Flint CEO Greg Goldfarb said in an interview that he thinks his company, which is also announcing a $3 million Series A round led by Storm Ventures and True Ventures, has a lot of room to grow in a space that Square seems to be moving further away from.
“From an overarching standpoint, I think they’re increasingly heading towards retail businesses, and more storefront businesses,” he said. “We are very, very focused on this on-the-go or truly mobile merchant, which happen to be predominantly more service-based businesses. From what we’re hearing from customers, our differentiation really will resonate with our core audience.”
Flint’s differentiation comes primarily from how it accepts payments, and from how it charges businesses for its services. The company provides the ability to accept mobile payments via a smartphone’s camera (though no image is collected or stored, and Goldfarb emphasized that it would be impossible for merchants to use the app to duplicate consumer cards, even if one wanted to try), and charges 1.95 percent per transaction, plus $0.20 for debit payments, or 2.95 percent plus $0.20 per credit card payment. Square charges a flat rate of 2.75 percent per transactions, by contrast, and Goldfarb thinks that the lower-cost debit option is actually a huge advantage when it comes to the actual buying habits of users.
“It turns out in the U.S. that debit cards actually account for the majority of plastic transactions,” he said. “In particular for local services, which is really where we’re focused.” The opportunity to accept payments via debit, and also save money doing so, is something Goldfarb thinks will hold special appeal to small volume independent merchants working beyond the confines of a fixed location.
There’s lots of competition among mobile payments providers, especially those who want to untether payments from computers and dedicated point-of-sale hardware. Still, Goldfarb points out that there’s also still plenty of untapped potential left in the space, leaving opportunity for many to succeed with competing business models.
“In terms of market development, it’s very early in the space,” he said. “Square is somewhere around or over a million people who have received the dongle, and we know that our target audience is in excess of 20-25 million businesses just in the U.S. alone.”
Traction for early players like Square is definitely being seen as a sign by others that the market’s ready for more options when it comes to the mobile payments space, and approaches like the one taken by Flint indicate we’ll see a lot more attempts at delineating the sweet spot for how transactions occur, and how they differ based on target market. Image capture of existing payment cards seems like a good bet in the near-term, because it requires no special hardware or significant changes in consumer behavior, something Jumio has also recognized with its technically similar Netswipe computer-based payment tech aimed more at web-based e-commerce sites. Going forward, it’ll be interesting to see how this type of model fares alongside and against hardware-based options, as well as device-to-device direct communication tech like NFC.