Contactless Intelligence dropped by Mobile POS company payleven’s Berlin offices last week to find out a little more about life in the Mobile POS industry.
Rocket Internet, the incubator/investment vehicle from the Samwer brothers is the infrastructure behind the German/UK based Mobile POS company. With a strong financial backing of double digit million euro from New Enterprise Associates, Holtzbrinck Ventures and RuNet, the company employs around 70 people in Germany, the UK and other international markets. Payleven is the latest company to enter the growing Mobile POS market; one that involves a plug and pay solution through a mobile phone or tablet (iOS or Android) with a free payleven app and a free payleven device – targeted at smaller retailers or mobile traders wishing to take card payment for their goods or services.
Perhaps more surprisingly, the first market payleven is looking to excel in is Germany, a country not known for changing it’s purchasing habits and adopting new payment forms easily. But then again, it is still early days for the company. Technically, payleven has only been around since March 2012 with beta testing amongst selected merchants taking place a few months later in June. Not only that but payleven – using the Rocket Internet infrastructure – is already expanding to other countries.
In August, Co-Founder and Managing Director Dr. Alexander Zumdieck was quoted as saying, “The first six weeks have been very successful for payleven. We are rapidly approaching round 1,000 partner merchants in our Berlin test market. Now we are expanding this success on a national and international scale. We see an impressive demand for our mobile card payment solution with 3 million potential users in Germany alone. Furthermore, we are now entering additional international markets very fast, starting with the Netherlands and Great Britain.” Since then, payleven has also announced entry into Poland, Italy and Brazil. They remain tightlipped about any numbers corresponding to these launches saying that it is too early to release any statistics. “Perhaps in a few weeks”, Zumdieck told Contactless Intelligence.
When asked about their entry into Brazil, Zumdieck admitted that may seem unusual after initially focussing on European countries but qualified the decision by saying, “By being in Brazil early we learn a lot about operating in the South American market. With the 2014 World Cup and 2016 Olympic Games on the horizon, Brazil was the top candidate outside of Europe”.
Currently, payleven works with Mastercard and local bank cards in the Netherlands and Germany using mag-card swipe technology. Accepting VISA and American Express credit cards will be possible with the launch of Chip & PIN devices say payleven, although they remain careful when it comes to forecasting when exactly that will be. Perhaps they are learning from competitor iZettle’s current problems? When asked on the subject by CI, Zumdieck merely stated, “a Chip and PIN solution remains the focus of the company”.
Payleven’s pitch is that their solution is tailored to the needs of small and independent businesses, offering fair and transparent terms and conditions. Billing is solely transaction based, so the merchant only pays when using payleven – there is no minimum turnover or fixed fee. A Mastercard transaction in Europe costs 2.95% plus 9 cents. The company says that no payment amount is too small – all card payments can be accepted starting with 1 euro. When asked about the 9 cents, Zumdieck told CI that it was to cover administration-type charges, especially when the 2.95% could be charged on very low transaction values. “This is a business that works by volume”, says Zumdieck, “that’s why our focus is to grow the market by getting as many merchants to use the payleven solution as possible”. Although Zumdieck did let slip that initial feedback shows the average transaction value to be higher than they originally anticipated – currently it is between 20 to 30 Euro.
Volume seems to be the key to success in this market; volume by number of transactions and volume by number of merchants accepting specific Mobile POS solutions. Payleven say that they spend a lot of time on making sure their documentation and field sales training is done well so that the merchant user can have a smooth and hassle free introduction to their payment solution. Says Zumdieck in summary, “We will win this through a great customer experience. That’s where payleven’s energy goes”.