Another mobile payments service is hitting the market today, but unlike Square, Here from PayPal, or solutions from the likes of Isis, this one doesn’t require a dongle on the handset — or new technology like NFC — to work. Called Flint, the free app uses the camera on a handset to “scan” the account number from the front of a payment card, and uses that along with a customer signature to process the transaction.
And the company behind the app, Flint Mobile, today also announced that it has raised a Series A round of $3 million from two top-tier VCs, Storm Ventures and True Ventures, which it will use to further product development, hire more people and market the new app.
Flint, which is currently available only as an iPhone app, is one of the more simple-sounding payments apps. It basically works like this: a merchant — typically a small business owner — uses the iPhone’s camera to shoot a picture of the number on the front of a credit card; that picture then gets translated by the app into a digitized number; and a customer signs on the screen of the merchant’s device (using a finger is fine) to authenticate the number and approve the transaction.
The merchant can then use the app to send out a receipt, and also use the transaction as the basis of further “social marketing”, for example in the form of posting messages on a users’ Facebook page.
“Essentially, we are starting to turn credit card transaction fees into an investment in online customer engagement,” said Greg Goldfarb, co-founder and CEO of Flint Mobile, in a statement. (However, features like Facebook posts presumably will require opting in from the customer to work.)
Flint seems to realize that Square has made strong inroads already among small merchants using iPhones to make payments, and so not only is it trying to compete by making the app less hardware-dependent, but also on transaction fees: for people using debit cards the fees are 1.95 percent plus $0.20; those using credit cards pay 2.95 percent plus $0.20. That sort of splits the different with Square’s dongle pricing, which comes in at 2.75 percent per swipe. (Manually-entered cards cost 3.5 percent plus $0.15 with Square.)
The other area where Flint is perhaps more attractive is that it claims that funds are transferred right away, whereas Square’s processing is next-day.
For now you need to sign up to the beta via the company’s site here. The company says it will also be helping with “integration” — presumably helping customize receipts and the social media marketing aspect of the service — for a “select set” of distribution partners.