In a time when cash can be counterfeit, credit cards can be stolen, ATMs can be skimmed and even alternative payment methods like Bitcoin remain extremely volatile and prone to mass account theft, Canadian consumers have few secure options.
But Vancouver-based PayWith claims it has developed a secure and simple alternative point-of-sale payment method. After securing $10 million in investment and a North American licensing agreement with MasterCard, the company has launched the mCard in Vancouver, a mobile iOS and Android app for in-store transactions.
"It's our feeling that the future of payments will eventually be mobile," said PayWith CEO David Strebinger. "What if somebody could actually walk in and pay with their phone at a merchant location using a voucher? We said we wanted to create the universal voucher that somebody could use to transact."
The mCard app, which is tied to a customer's credit card account, dynamically generates a card number for every transaction that merchants can then input into their point-of-sale terminals.
"Your card credentials and information is never displayed to the merchant and never used for the transaction," Strebinger said. "It's totally secure, and then on the back end, we give you all the rewards and credit your account with all of the incentives."
Strebinger's biggest challenge in developing the app was making it easy for merchants to adopt. Approximately 35.9 million merchants in North America already have a payment mechanism.
"Transitioning those 35 million merchants over to new forms of payment is a really difficult task for anyone. It doesn't matter if you're Google (Nasdaq:GOOG) or Apple (Nasdaq:AAPL), because it's not about throwing money at the problem, it's about education, it's about getting merchants comfortable with new processes and new systems."
To solve the adoption problem, PayWith ensured that the mCard works with all existing point-of-sale terminals and requires no additional software or hardware to use. It's all on the client's mobile app.
"Our goal when we built this company was to remove all barriers to entry for merchants," Strebinger said. "We removed all the financial barriers by making it the least expensive way to process a digital transaction."
The mCard also allows merchants to use the platform to offer discounts and rewards programs, and the cost to merchants is only as much as they are willing to spend on such incentives.
"Customers love it," said Brendan Ng, co-owner of Fresh Bowl, a Malaysian restaurant with locations in Gastown and Yaletown.
"We have stamp cards that we use, and we have customers come in saying, 'Hey, we're tired of carrying all these different stamp cards from these different places.' And I'm like, 'Oh, have you heard of this technology? It's a really cool app, you get instant rebates.' A lot of our customers have just been like, 'Why didn't you have this earlier?'"
PayWith's mCard launched this year with 30 merchants signed on at 100 individual locations. The company aims to have 5,000 merchants by the end of the year. With the company's North American distribution licence from MasterCard, mCard can appear across Canada and the United States.
"We're the first non-bank to actually be issuing what are essentially MasterCard vouchers on a platform that is not a bank," Strebinger said.
If the platform remains as secure as it's been in beta tests, then it also might not be the last. •
