Today Santa Monica, CA-based Kuapay, a mobile payments startup that competes with Square Wallet, recently-launched wireless carrier-backed solution Isis, and Google Wallet, announced that is has launched its system in 14 KFC locations in southern California. The company’s apps for iPhone, Android and BlackBerry let shoppers pay at over 10,000 partner locations around the world, and let merchants accept payments in-store and online, and launch loyalty programs and deals.
Kuapay launched in 2010 and is active in New York City, California, Hong Kong, Chile, Spain, Panama, and Colombia. The company was already running a pilot program in one KFC location in California and founder Joaquin Ayuso de Paul said the larger rollout is due to the success of that initial test run.
“We both decided that it was time to roll out to the rest of the KFCs in this franchise, and it’s going really well,” he said, adding that they’re trying to bring merchants in close proximity to those locations on board so users will be more likely to open Kuapay and find participating KFC restaurants. “We provide an ecosystem around their stores to [allow] people to pay with their phone so they’re more motivated to keep using their mobile wallet rather than just one time to test it or a couple times because it was cool.”
The 14 locations are owned by one KFC franchisee, who owns over 70 KFC/Taco Bell locations in total in southern California, so the company plans to expand to other locations in cities like San Diego next year. They will also be testing out loyalty programs, both targeted coupons so users could bring in a friend to get a free meal, and ongoing programs so users could get an item free after purchasing a preset number of menu items.
There are a whole host of digital wallet apps that help consumers store their rewards cards and pay in-store, from Lemon to Google Wallet. To accept Kuapay, merchants integrate it into their point-of-sale (POS) system, with the company recently adding integrations with large POS providers like Micros, Positouch, and Dinerware. Or merchants can take their POS mobile by downloading a merchant app which lets them scan Kuapay’s QR codes and accept payments anywhere. Unlike competitors like PayPal Here or Square, merchants don’t have to install or use additional hardware (usually a mobile credit card reader that plugs into a smartphone or tablet’s headphone jack).
To pay via Kuapay, consumers download the app and link a credit or debit card. When they’re at the point-of-sale, for example at a KFC location, they would open the app (it requires a four-digit pin code to open) and select the card they want to use to pay. The app generates a unique QR code the merchant can scan, and the customer taps to approve the purchase in the app. The apps also have loyalty features, so merchants could send out one-time deals and coupons, or create ongoing loyalty programs.
The company also recently launched a “pay with Kuapay” feature for online retailers, letting users enter a unique code generated by the mobile app to pay online, a feature they beta tested this summer. The Kuapay app is free for consumers, and the company charges businesses 2 percent plus $0.23 per transaction, which dropped slightly since August, when it was 2.09 percent plus $0.30 per transaction. Right now the company works with restaurants, grocery stores, transportation companies and department stores, though de Paul said any online retailer could also leverage the solution.
No standard has emerged in the mobile payments market, with everyone from retailers (through the Merchant Customer Exchange initiative), to wireless carriers (via Isis), to companies like MasterCard and Visa trying to launch solutions that consumers will adopt readily. De Paul said he believes the company’s biggest differentiator is that they want to be a way for consumers to pay for any purchase anywhere with their mobile device, whether in store or online. ”We want to be the standard for all types of transactions,” he said, adding that he also thinks consumers are more comfortable with QR codes, since they can approve the payment on their smartphone rather than just tapping it against a terminal like they would with an NFC solution like Google Wallet.
With the mobile payments race heating up, Kuapay’s already-global presence and partnerships with high-profile merchants like KFC are helping it make a dent in the space. Like its competitors, the real measure of success will be mass merchant and consumer adoption. Until pulling out a smartphone to pay in-store is a common and natural method of payment for consumers, and until the wallet truly goes digital by letting consumers pay at any store anywhere using only their phone, Kuapay will likely have to sell both merchants and consumers on its solution, but it has a good head start.