The mobile payments market has been set for take-off without anyone releasing the killer piece of software or app – but British company Powa Technologies believes it has finally cracked it
For years the industry has been told that mobile will one day remove the need to take your wallet on a night out, ridding the need to carry a physical payment card, instead making your payments with the so-called digital wallet.
However, despite all the fuss, just £151 billion of the £2.57 trillion payments made in 2013 were made using a mobile. Even O2, the UK second-biggest network operator with 23.5 million customers, has panned its O2 Wallet services, as demand simply failed to take off.
The latest company to stake its claim, in a bid to change the world, is British technology company Powa Technologies, which says its e-commerce app PowaTag will be a gasme-changer in the way people view mobile payments.
So how does it work?
The Powatag app and business proposition essentially allows users to purchase products via a mobile device with just one click of a button via a registered debit or credit card. The app is available free from iOS, Android, Windows shortly, but no plans for BlackBerry.
Whilst the firm’s chief executive officer Dan Wagner admits there is nothing new in this, he says his company has brought a range of existing technologies together “elegantly”.
Wagner, an internet entrepreneur for some 30 years, explained if you’re watching a TV advertisement which includes a Powatag symbol, the app will automatically recognise the sound from the TV, and audio tags will automatically link your phone to the product and checkout online.
On print advertisements, billboards, or catalogues you can scan the QR code and it will take you to the checkout page. When a store is closed shoppers can use the QR code to purchase products in the window. The app shuns NFC in favour of allowing retailers to push targeted offers and information on products via bluetooth beacons which can interact with iOS and Android 4.3 and above devices.
“[It gives] The ability to convert customers in environments that aren’t traditionally associated with retail transactions,” Wagner told Mobile News. “All we are doing is making it easier – it’s actually a lot simpler on the surface than it is underneath.”
“From a technical standpoint it’s quite sophisticated but the reality is it just makes things easier for consumers and allows transactions to be effected easier in traditional transaction environments, such as online and your mobile phone, and extends it to areas where you can’t transact today. A closed shop window, watching TV, so from that perspective it’s transformational, but from a technology perspective it’s evolutionary.”
Powa Technologies’ $96.7 million (£58 million) seed funding round is the largest in tech history but this is a different kind of start-up to that which is normally seen in the tech industry.
Image is everything
The firm has some impressive surroundings, situated on the 34th and 35th floor of the Heron Tower, the largest building in the City of London occupying 20,000 sq ft. While there are some under-30s bashing away on laptops, this isn’t Silicon Valley. A giant goldfish bowl of a boardroom dominates the office and this is a company that has already scaled up its infrastructure ahead of taking its latest product to market.
First impressions can be everything and in Wagner, they’ve got a man who knows the value of image. He set up MAID (later known as Dialog), an online system selling research and market analysis electronically in 1985 and eventually sold it to Thomson after the dot com bubble burst. He appeared at a media photocall ahead of its IPO dressed in a Donald Duck waistcoat, an appearance that many believed knocked 10 pence off its share price. This is a mistake he appears keen not to make again.
Wagner is looking to capitalise on the knowledge that retailers are desperate for a solution that will allow them to Amazon-proof their business. A simple way to connect advertisements or products with fulfilment from the company will help that.
Universal Music was at the launch and a representative waxed lyrical about the potential for its use at concerts for merchandising. Why join a long queue if you can just ‘Tag” a scanner and have the product delivered to you?
The list of the 240 brand names already on board for Powatag – Reebok, BBC, Adidas, Laura Ashley, and many more luxury brands – is impressive and it is this backing that sets it apart from other platforms such as Znap, battling for control of the eco-system. It will also be offered as a free service to selected charities.
Luxury jeweller Monica Vinader was one of the brands wheeled out at its launch event in London last month and it believes that Powatag could become the standard for the industry.
“Every online check-out process is different and going one step beyond that, being able to integrate that online and offline experience, again no one is doing it that well unless you’ve got a lot of money,” online product manager Kunal Damani told Mobile News.
“I think what really appealed to me was, here is a way of standardising and levelling out the field for everybody. Having something that can work on print and in the shop window when the door is closed.”
Wagner believes merchants placing the Powatag symbol on advertising will lead to embryonic growth and that the battle is “already over, we’ve won”.
“Really the difference between us and other guys are we came at it from the merchants’ perspective and everybody else came at it from the consumer perspective,” he adds.
“The consumer perspective is obviously important but we were serving a need that the merchants have and we’re relying on the merchants to promote it to their customers.”
The level of seed funding that Powa Technologies has taken and the level of interest from brands has made the wider tech-world take note. Apple has long been rumoured to be working on a way to leverage the 600 million card details it holds to allow users to pay for physical goods. The iPhone manufacturer, Google and Facebook are engaging in their own Silicon Valley arms but has there been any interest?
“We’re speaking to those guys, of course we are,” Wagner continues. “There’s a huge amount of interest about what we’re doing. It’s obvious just like any British business that there’ll be an offer from an American firm to take us out.’
Has there been already? “There has been interest shown but I think the point is there are two things different about us as a start-up – I’m a veteran entrepreneur, I make money. I don’t have a desire to sell out for my lifestyle, I don’t have any venture capitalists in this business which means I don’t have a ticking clock that we have to go public or sell-out. We raised money but not from a VC.”
This year will be one of slow burn for the technology but it will live and die by how often consumers are confronted by PowaTag symbols from 2015 and beyond. If retailers are as serious as they say, “Tagging” could become a major part of the retail experience.