mint wireless to launch

Mint Wireless to launch local rival of US payments start-up Square

Listed mobile payments provider Mint Wireless is in talks with three of the four big banks to launch a smartphone accessory that allows small businesses to accept credit card payments, in a bid to locally emulate the success of US start-up Square.

The six-year-old company, which also makes white-label mobile commerce and payment apps for clients including Cadbury Schweppes, is in a concerted push to grow its share of the $US235 billion market after obtaining accreditation for a bank and card scheme through Bendigo Bank.

Its flagship product, a small card reader that plugs into a smartphone’s headphone jack and accepts credit cards, was launched last month for Bank of New Zealand customers and is now being used by more than 1000 customers.

Mint is believed to be readying a similar solution to be launched by MYOB next year, but is hoping to replicate the BNZ deal with a major Australian bank.

Chief executive Alex Teoh would not confirm which companies Mint was in negotiations with, but it is believed all bar Commonwealth Bank are interested in the product.

Commbank, Australia’s largest institution, is readying the launch of its own mobile payments hardware on Thursday.

Mr Teoh said Mint was looking to mimic the success of Square, a US company started by Twitter co-founder Jack Dorsey in 2009 which offers a similar dongle. It now claims to have four million users accounting for more than $US15 billion in annual payments.

Square’s success has piqued the interest of Australian financial institutions and telcos which are increasingly looking to technological solutions to attract new customers and retain existing ones.

But where Square has built its own user base by selling direct to businesses, Mr Teoh told The Australian Financial Review that Australia’s heavy regulations and existing market structure required them to work through the banks and telcos.

“Australia is probably in my opinion one of the toughest payment markets in the world to crack into,” Mr Teoh said. “That’s one of the reasons why Square hasn’t come here.”

Though Square has expanded to Japan and Canada, a key obstacle blocking further global expansion is the prevalent use of encrypted chips on credit cards, rather than traditional magnetic strips.

The chip, to be mandated in Australia from 2015, is a feature Square’s card readers currently do not support but one Mint now offers.

PayPal last year launched its own card reader in Australia, PayPal Here, but its success remains unknown. A spokeswoman for the company did not respond to questions.

Mr Teoh said he expected the BNZ and MYOB contracts, plus a burgeoning program for app developers, to grow the business over the next year with a potential maiden profit by 2015.

Mint posted a 217 per cent increase in revenues to $960,000 but a $3.4 million net loss in the 2013 financial year.

Tech analyst firm Gartner predicted global mobile payment transaction values would reach $US235.4?billion ($256?billion) in 2013, a 44?per cent increase from 2012 values of $US163.1?billion.

Link

http://www.afr.com/p/technology/mint_wireless_square_launch_local_8QUnTp4UFuvMtQ8IcGdNDJ