Startup mPayy Takes on PayPal with Mobile Payments
The Chicago-based startup hopes to become an alternative to PayPal and credit and debit cards by focusing on the mobile space and charging merchants lower transaction fees.
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Just as eBay is the 800-pound gorilla of online auction sites, PayPal is the 800-pound gorilla of payment services. But Conrad Sheehan, founder of mPayy, a Chicago-based mobile payment startup, isn't all that worried about having to step out from under PayPal's extensive shadow. Instead, he is taking a different approach to payments, betting that a combination of convenience and lower fees will bring both consumers and businesses into the mPayy fold. "mPayy emerged from the need to provide a more secure and lower-cost alternative to credit and debit cards," Sheehan says.
Any business that accepts credit cards or PayPal knows that they come with a price -- namely, transaction fees. In tight economic times with even tighter margins, those fees can add up fast. mPayy claims it can shave up to 50 percent off the cost of accepting payments compared to standard credit-card and PayPal fees -- transactions with mPayy run $0.20 plus 2 percent of each sale. "mPayy is completely independent of the legacy Visa/MasterCard networks," Sheehan says. Many payment services, in one way or another, basically resell credit and debit cards. mPayy users connect their bank account or a stored value account directly with their mPayy accounts. No plastic gets in between. Thus the lower fees.
Mobile Commerce Gets a Nudge
The mobile technology realm is hot, and it's not cooling off anytime soon. Sheehan's startup specializes in mobile payments -- a boost to the cell phone-as-wallet concept. mPayy accounts are linked to a mobile number, and that number and a password are all it takes to make a payment. Sheehan sees this mobile focus as key to his company's success. "If a new company can offer a better proposition to consumers and merchants, and leverage the mobile device, it can succeed on a massive scale," he says. "Mobile numbers are also globally unique and portable, making them a nice identifier."
Mobile may be key to mPayy's existence, but the company is also paying attention to all the different ways businesses need to accept payments. The merchant toolbox includes e-mail invoices, SMS invoices, Facebook widgets, iPhone and Android applications, special micropayment pricing and the ability to accept recurring or subscription payments.
Up Next: The World
Getting the mPayy name out in a market that already has dominant forces is a challenge, but it's one Sheehan feels confident about conquering. He sees a perfect storm brewing, with a growth in global e-commerce, the emergence of mobile technologies and "everyone's desire for a better deal."
Once upon a time, PayPal was a small startup, too. "I see the future of mPayy as a global payment service seamlessly and securely working across multiple channels, providing new convenience for consumers and significant savings for merchants," Sheehan says. If enough businesses and consumers are attracted to mPayy's lower fees and focus on mobile commerce, it just may become the next payment services star.