The easiest way to explain cat-like mobile payments startup ZipPay is to say it’s similar to Square and Venmo had a baby, and this was the result. Like Square, the startup aims to residence the needs of people and tiny business owners who can’t means the high fees related with having their own businessman accounts by permitting them to agree to credit card payments using their phone. Meanwhile, similar to Venmo, the answer will moreover supply a way to perform person-to-person payments.
But there are a few key differences.For starters, different Square, ZipPay won’t use a dongle. It moreover promises rates descend than Square’s 2.75% per swipe.
How this will be done, however, is still unclear.
Instead of dongles that affix to the phone’s headphone jack, as is the box with Square, ZipPay will offer a mobile wallet answer that uses a few undisclosed patent-pending technology.
To bucket cards in to the wallet, ZipPay is leveraging Card.io , the new program growth pack (SDK) for mobile developers that uses a multiple of P.C. prophesy and appurtenance comprehension to “read” a card hold up to the mobile phone’s camera. This technology allows faster access of credit card data in to a mobile application, when compared with manually typing in figures on a tiny keyboard.
Unlike Square’s wallet-like Card Case , that provides digital “tabs” for local merchants, ZipPay’s wallet supports all leading credit cards, inclusive Visa, MasterCard, Discover and American Express. Store cards, bonus cards and membership cards will be upheld in the future.
The card data is stored right away on the device in an encrypted format, however, this is not an NFC-enabled mobile wallet system. There’s a compulsory 4-digit PIN ethics is to ZipPay app, but how the card data is sent between the patron and the businessman or two ZipPay users waste a mystery.
Company CEO Ryan Stevens says he isn’t ready to exhibit this segment of the network for aggressive reasons, but it’s probable that the app someway uses smartphone sensors to link up the two devices, any that must be run the ZipPay app. Perhaps something similar to Bump ?
On the merchant’s side, similar to Square, ZipPay will enable forexpedited sign-up, so new users can beginning accepting credit cards immediately. The firm runs a simple credentials examine on the spot, and if there aren’t any without doubt red flags, the account is approved. Merchants can assign up to $1,000 that initial day (the same as Square’s handbook entry/card not present limit). Later on, when the full credentials examine goes through, the confine is dropped.
ZipPay has a promissory note associate on the backend (unnamed for now) and payments are deposited in to merchant’s accounts inside of 1 to 3 days, implying an ACH network is involved.
The second segment of the ZipPay network is the underline that involves peer-to-peer payments, something really sufficient similar to the startup Venmo . In this case, both people would must be have the ZipPay app on their gadgets and then, once again using the undisclosed technology, payments may be now sent between the devices.
Because the firm is not ready to item its technology, it’s hard to compare what it’s gift with Square, PayPal, Google Wallet or others. We do know it’s not NFC and there’s no dongle, but that’s about it.We moreover know that it skeleton to take a portion of the estimate fees, similar to Square, and the app will moreover add “a tiny ad,” that may be how it skeleton to undercut Square.
Security is moreover a large subject here, deliberation that encrypted data stored on the device may still be exposed if the device is compromised by a pathogen or malware, for example. Also, in NFC’s case, any contactless card stored on the device generates a cryptogram to to one side pick out any transaction. No two cards share the same key and the key is never transmitted.
How will ZipPay’s network work? Is it storing full mag ribbon data on the device? What turn and sort of encryption is involved? What’s being completed to safeguard the data on both ends? During transmission?
The firm says it stores no credit card data on its own servers, usually the technology used to decrypt the data on your device. Using an online dashboard, mislaid or stolen phones may be immediately infirm from creation payments, but that does not pledge that the credit card data couldn’t someway be extracted from the device before you noticed that your phone is gone.
Until the network launches in to beta, many of these questions may sojourn unanswered. ZipPay will offer iPhone and Android apps, starting with the iOS version, rising in Q1 2012. It’s accepting beta sign-ups now .
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