Just this week Square, the mobile payments giant backed by Twitter’s Jack Dorsey, was knocked down another notch when it officially closed its three-year-old mobile wallet app. Facebook, on the other hand, is reportedly looking to partner with London startups to get into the e-money game.
There’s no doubt that the mobile payment world is crowded and the players are constantly (and quickly) changing - here’s three nimble companies here in LA that are poised to dramatically change the way the world buys stuff:
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What they do: Pasadena-based Wallaby develops apps for consumers to optimize credit card usage based on individual preferences.
Investors: MuckerLab, Karlin Ventures, Quotidian, Founders Fund, SLP and others participated in a $1.4 million round in 2012.
Why they do what they do: “At its heart Wallaby is a data-driven startup working to use technology to save people money and help financial institutions better understand and meet the needs of their consumers,” CEO Matthew Goldman said. “We believe that our software is the core value of what we do and will be a huge benefit across many different experiences or form factors.”
What’s new: “We're about to announce a huge partnership in the software side where by we'll be powering an experience for one of the largest credit card marketing sites out there,” Goldman said. “Beyond that, we're making really great behind-the-scenes progress on the Wallaby Card and payment processing and we are looking forward to bringing that to users later this year.”
FinTech fanatics at heart: “I've always been really interested in payments,” Goldman said. “it's the plumbing of commerce. When I had the opportunity to work for Green Dot (LA's most unsung $1billion IPO), I jumped at the chance to be a part of a Sequoia-backed startup and learn about payments. I learned a ton during my three years there and have been a student of the space ever since.”
Apps they’re excited about: “We're really excited about paying for things via apps on your phone for services in real-life,” Goldman said. “Examples of this are Washio, Uber, Homejoy, etc. Everyone envisioned mobile payments as tapping or scanning at a retail store, but order-ahead and delivery services are where it makes the most sense and really improves the experience.”
Advice to new mobile payment companies: “There are a lot of regulatory hurdles and you have to look and be a bit more buttoned-down than your usual consumer internet play,” Goldman said. “I think you need to look for a solid problem, proof that you are not as risky as a startup really is, and an experience that actually improves on credit card swiping. Swiping is fast and easy and mobile payments have really struggled because no one's proven there is anything better yet.”
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Who they are: an international digital currency payments platform. As an open API system, GoCoin is currency-agnostic, accepting Bitcoin, Litecoin, Dogecoin and others.
Their team: includes founder and CEO Steve Beauregard, co-founder and chairman Brock Pierce (the most active angel investor in the Bitcoin space), founding board member William Quigley (who was the initial VC for PayPal) and lead investor Owen Van Natta (COO/CRO for Facebook and seven-year Amazon executive).
Why their tech is innovative: “Our proprietary back-end trading system instantly converts the coins into cash and payments can be settled daily into the operator's bank account in most countries and major currencies.The platform is very feature rich and includes a double entry accounting system for order and settlement reconciliation.
”What they’re up to now: “We’re working on global expansion into emerging markets with key focus on verticals that will likely use coins as payment,” Beauregard said.
Why Bitcoin: “I always keep a close eye on emerging technologies and I have a knack for spotting them (i.e. Satellite TV (DirecTV), mobile email (BlackBerry), mobile apps (BlackBerry, iPhone, Android), e-commerce (Magento, WooCommerce, etc),” Beauregard said. “To me Bitcoin is the holy grail of e-commerce and I was not going to miss the opportunity.”
The Bitcoin market: “It is still quite early, but the space is quickly getting crowded due to the amount of investment,” Beauregard said.
Mobile payment trends they’re excited about: “We are building better checkout experiences than the QR Code which has become the standard in Bitcoin transactions,” Beauregard said. “I believe the innovations will come via SMS and other methods.”
Why LA: “LA has one of the strongest Bitcoin communities in the world,” Beauregard said. “When it comes to Bitcoin, LA is NOT in the shadow of Silicon Valley.”
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What they do: provide a universal mobile wallet that can store all magnetic stripe and EMV-based credit, debit, gift, loyalty cards, as well as RFID-based cards, such as digital keys and bus passes, onto one card.
Funding: $2 million from Abdullah Al-Dhowayan, who manages the Al-Dhowayan Group.
Why they do it: “We feel that we've taken the most prudent and considered approach in building our hardware, and while the LA community may have heard more from our competitors in the press lately, we feel strongly that our approach will ensure that with Omne, consumers are getting the most advanced, secure, and reliable mobile wallet solution out there,” Business Development Director Oliver Allnatt said. “We wanted to build something that major financial entities, banks and networks would feel comfortable putting their brand on and getting behind, and we feel our card delivers that level of reliability and security.”
The crowded mobile payment space: “We expect the mobile payment space to evolve immensely over the next five to seven years,” Allnatt said. “A multitude of players in the space are experimenting with different ways of executing and delivering mobile payment solutions. You've got contactless phone based mediums out there like NFC, QR, IBeacon etc. You also have companies like Omne introducing hardware solutions in the form of an all-in-one smart card, or NXT Id's take on the mobile wallet, The Wocket, another all-in-one hardware solution. Looking ahead several years, we might see seamless payment methods used in-store that eliminate the checkout terminal altogether (Imagine Uber's frictionless payment system supporting B&M shopping).”
Usability and security: “Whoever can deliver a functional and secure mobile wallet/mobile payment solution will win out, and you've got a slew of startups and large tech/financial entities working on that right now,” Allnatt said. “I think it's a volatile space, ripe for constant disruption and innovation.”
Mobile payment trends to look out for: “Not to call our own number here, but we’re really excited to see what happens with a few companies that are taking a hardware-based approach in defining the mobile wallet, which includes companies like Omne, Coin, NXT ID and others,” Allnatt said. “We obviously think this approach is the most sensible right now, and expect technologies like Omne's to bridge the gap to mobile payments by making the mobile wallet accessible on the current POS terminal infrastructure that merchants operate on now.”
