When I first moved to Finland three years ago, I remember seeing a Coke machine at the university that accepted payments over the phone. All you had to do was call up the phone number, type in the machine's ID, and then the machine was credited and you'd find the slightly more expensive coke on your phone bill. I thought it was pretty cool and I mentioned it to my Finnish friend in passing, and the response I got was something like "Yeah, I think we've had that since the 90's."
It seems like Finland and the rest of the Nordic and Baltic countries are ahead of the curve when it comes to mobile payments being accepted in society, but there still is a long way to go before I can stop carrying my wallet around. There's a lot of companies to take a look at, so here are a few that have come up on our radar.
Accumulate out of Sweden, recently came out with several announcements worth noting. The company is building a mobile financial services platform, called Mobile Everywhere, and just announced a new mobile wallet service that will be available to 97% of all mobile phone users in Sweden. The mobile wallet venture, dubbed WyWallet, has been put together in conjunction with the four largest mobile network operators in Sweden, including Telia, Tele2, Telenor and 3.
The platform is technology agnostic, so any pairing technology used at a payment transaction is supported, like NFC built-in mobile, RFID, Accumulate OTT, QR- and bar codes, etc. Also, a mobile payment service based on the Accumulate platform support all payment situations and more; POS, online, person-to-person, man-to-machine (ex. vending, mParking), in-app purchase, remittance, and so on. The company points out that several Samsung phones offer NFC already, and the Nokia Windows 8 phones will also support the technology.
In December Accumulate ran a NFC beta test in Stockholm for Paypal at two retailers using passive NFC stickers, and their focus on NFC seems to support that they thing it's a good step forward. It is unclear what Accumulate's relationship is with Paypal at this day, considering they are building their own mobile wallet platform.
This mobile wallet system also plugs into Accumulate's mobile merchant app that requires no special hardware or additions, and can run on any Android, iPhone and iPad. Purchases through the system are made as a money transfer and are authenticated by Accumulate's One-Time-Tickets. The mobile merchant app is in their strategy to plug into all mobile payment solutions, from point of sale situations, online payments, and man-to-machine payments.
mCASH out of Norway is another mobile payments provider worth keeping an eye on. In June, their Facebook page gives this news:
mCASH is being made available in the Point Of Sale Software offered by Lindbak Retail Systems. Lindbak is one of the leading providers of POS solutions in Norway and Sweden. Lindbak is implementing the full range of mCASH technologies enabling their customers to tap into features such as mCASH Payments, electronic receipts, loyalty, business intelligence and more.
Thus mCASH is available to Merchants such as XXL Sport, G Sport, InterSport, Deli De Luca, Coop, Vinmonopolet. Just to mention a few.
Their iPhone app is currently in beta testing. We covered them last November, but I get the impression that they have cut down a number of their features to focus on their core product.
Here's another Norwegian company we gave some coverage to way back in 2009, but is still alive and kicking. MobileAxept was founded in 2003 and provides a SMS based payment solution for retail and donations. Users must first register with MobileAxept, either online or by text, and then further payments can be accepted by text message. The company takes a 3% cut of transactions.
Judging from their website, they seem to be getting most of their traction on the donation front, with a good couple churches in the United States using it as a method to accept offerings. I suppose now it's no longer in bad taste to pull out your phone during services.
In Estonia, ERPLY, the provider of a cloud-based POS system, has partnered with Paypal to integrate mobile payments into its system. Consumers wishing to use the payment method will need to download the PayPal iPhone app. The solution allows customers to simply "check in" to a store when entering, then pay with Paypal at the checkout counter.
The solution also gives the opportunity to run different services, like customized offers and loyalty programs. The checkout process only requires the cashier to match the name and photo of a customer, which will likely give a quick transaction at the register. Funds are then made instantly available in the retailer’s PayPal account.
This Lithuanian startup seems to have a pretty solid penetration in their home country already. Mokipay uses a sticker with a Near Field Communication (NFC) chip that attaches to the back of a smart or dumb phone, which can be read by a Mokipay reader. Payments can be accepted in 150 places in Vilnius, and 70 locations in Kaunas, with many more spread out across Lithuania.
For smartphones, Mokipay functions as a mobile wallet and a loyalty card for services of partners. They are also developing the app to act an access control card (to enter buildings using NFC), an e-ticket for public transport, a city guide, and a budget management tool. Their about page says the functionality of Mokipay service is being constantly expanded. Our past coverage goes into more detail about the service.
The Lithuanian social network targeted at feature phones is also experimenting with payments these days. Eskimi has seen the majority of its users come from Africa, mostly from Nigeria. The country is still experiencing rapid inflation, and the government has been seriously promoting alternative payment solutions to reduce the demand of printed money, which is difficult and costly to continuously reprint and update.
Eskimi has now partnered with Mobile Money operators in Nigeria by helping them with user acquisition. It will be interesting to see how they expand on this front, as social networks can easily provide the user base and platform for payments. In our last Unfair Advantage episode, we talked to CEO Vytas Paukštys of Eskimi about this in more detail.
It appears two Finnish inventors, Janne Aaltonen and Sami Saru of Turku Finland, have sold their mobile wallet patent to Apple recently. The system allows for both payment and issuance of coupons, vouchers, or credits. This well written Quora post is worth taking a look at if you're interested getting some insight to what Apple may be working on.
Mobile payments seem to incur higher transaction costs through these startups, but retailers get the benefit of taking on promotions and better tracking and insight on their customers. Ultimately, for consumers these mobile payment systems have to prove themselves to be faster and easier than credit cards and cash, otherwise what's the real benefit aside from the occasional coupon or discount?
Everyone likes carrying a credit card around because now you can walk around without cash, but I think these mobile wallets will have a hard time replacing cards and cash until battery life is severely increased on smartphones. My iPhone lasts well under a day with moderate use, and currently I get anxious enough as is when my battery life drops below 30%. I can't imagine relying on my phone for buying food when my wallet can just turn itself off.
That being said, it's inevitable some sort of mobile payment solution will eventually become standard, and perhaps we're seeing it in its infancy right now in the Nordics and Baltics.
Top image by whiteafrican on Flickr
New startup solutions are becoming a big part of offline retail, providing real world impact in how we shop and make money offline. Take for example this recent news that we missed while it was fresh, but still is noteworthy: Estonian provider of business software, Erply, and Paypal have partnered to bring a seamless mobile payment solution to stores under Erply's LikePOS. The solution allows customers to simply "check in" to a store when entering, then pay with Paypal at the checkout counter. It's an innovation that's quick and easy for consumers, and it provides retailers more insight into their customers and their shopping experiences.
Erply, one of the most promising start-ups from Estonia, provide software for small and medium-sized retailers who have physical stores. We have not covered the company for almost a year and meanwhile it has been quitely growing. From 2,000 business customers in March 2010, the company grew to 20,000 retailers who daily process over $2.5 million in transactions, according to the Wall Street Journal. Today Erply announced the launch of a magnetic credit card reader that is also NFC-enabled and is fully integrated with its existing cloud-based software. The device is priced at $50 and Erply will also charge 1.9% transaction fee, which is smaller than what its biggest competitor in the US, Square, charge their customers (2.75% per swipe).
Seedcamp, the European seed investment program that originated in London has opened its Nordic Mini Seedcamp for applications. This year the Mini Seedcamp takes place in Copenhagen, Denmark 27th May 2010.
Mini Seedcamp Copenhagen is a one day event aiming to connect the 20 best web-tech, mobile and software startups with some of the leading entrepreneurs, developers, and experts from the European tech ecosystem.
Last year Seedcamp's Nordic event took place in Helsingborg, Sweden and attracted a decent line-up of startups. That said, there is definitely room for more quality applicants, not least from Finland. You can see our coverage from last year here.
Erply has come up with an innovative way to harness the mobility of the iPad. Erply is an Estonian company, who just last month raised 2 million dollars in funding and is trying to create an appealing solution to the sales, inventory and CRM challenges of retail SMEs.
Some time ago, Erply announced iPOS, which is essentially the ERPLY solution running on the iPad. They have a demo landing page up for the service, but it is enough to intrigue me into writing a story about it. I think this is one of the best B2B solutions/ideas out there for iPad.
Erply, an Estonian startup specialising in providing a wide range of core business services to companies, has received a whopping $2 million in funding from Redpoint, Index Ventures, Marten Mickos, Zack Urlocker, Kenny van Zant, Aydin Senkut, David McClure and the Accelerator Group. The one year old company (founded 2009) has more than 2000 business customers and 8000 users. It is currently profitable with approximately 20% growth each month, according to TechCrunch.
Erply has been one of my favorite companies in the Nordic and Baltic region lately. We've covered them before on their Seedcamp tour, first when they were nominated and second when they were announced one of the winners. Erply is an Estonian company that has created a Saas-based offering which enable retail shop keepers run their business. Erply enables companies to sell online, keep track of their inventory as well as billing, manage your sales pipeline, a Point-of-sales application and a lot more. I received access to their software and decided to take it out for a little test ride and see how well it performs.
Erply, one of the winners of Seedcamp, a company we covered a few weeks ago had a good experience visiting the competition. I talked to Kristjan Randma again, after they got back from London on what was the biggest take on the experience itself that others could learn from. It seems that this year, a lot of focus was being put on monetisation an business models.
Erply, an Estonian web startup, is the only company to make it to Seedcamp from the Nordics and Baltics. But what a great idea that Erply has, despite being a tiny company with only 4 employees. The company is actually working to create a single solution for small retailers and service companies to handle all their daily operations. Daily operations include everything from handling your inventory, having a digital cash register, billing and accounting software.