To Modernize The Checkbook, Zipmark Launches Developer Platform For Mobile Payments

Following its recent raise of $2 million in seed funding, the still invite-only mobile payments startup Zipmark is today announcing the launch of its developer program and API. The New York-based company, founded in 2010 by Citigroup alum Jay Bhattacharya and CTO Jake Howerton, leverages the existing check processing network to allow users to avoid credit card fees while also eliminating the risk of bounced checks.

The way Zipmark works is this:

Users connect their “real” checking account to the service, which they can then use to pay bills and invoices or send money to friends. Because the Zipmark works over the existing check processing infrastructure, Zipmark doesn’t need to hold onto the funds in the cloud for an extended period of time while the transactions are verified. Instead, the money clears a user’s account on the next business day. Merchants will also be able to offer Zipmark as a payment option by placing a QR code on their invoices, which customers can then scan and pay.

Because it uses the check processing network, Zipmark’s fees are low – just 1% of each transaction – and are capped at $5.00, regardless of the transaction amount. The system also uses secure, Check21 compliant digital checks, the goal being to “modernize the checkbook,” the company says.

With the new Zipmark Biller API, businesses and app developers will have access to a new payment system for both online and mobile transactions. At launch, several companies are also announcing their support for the system, including NY co-working space Sunshine Suites, bill payment solution provider Singular Payments, property management software company UnitConnect, and mobile invoicing provider InvoiceASAP.

In addition, Zipmark says it will also launch a consumer-facing iPhone app in time for SXSW, which will let users pay for items, fees and subscriptions directly from QR codes.

While the service competes with other mobile payment systems, like Dwolla or PayPal for example, Zipmark isn’t about building a new payment network, or even connecting you to credit card networks through a mobile interface. Instead, it’s about leveraging the existing check processing network in a new way – through your mobile phone.

Zipmark raised $2 million in December in a round led by Village Ventures and Contour Venture Partners, and supported by NYC Seed, High Peaks Venture Capital and the New York City Investment Fund.

Developers will be able to sign up starting tomorrow on the Zipmark homepage.