Startup company called Clip has raised $1.5 million to implement Mexican smartphone transactions.
Clip, a mobile payments startup, has managed to raise $1.5 million in funding in order to create a smartphone based transaction system that will cater to consumers in Mexico, providing a service that has been compared to Square.
There are considerable differences, however, between what Clip and Square provide their customers.
The mobile payments service at Clip is focused primarily on the needs of specific local markets, such as that of the Spanish speaking world in Mexico. Co-founder and chief executive of the company, Adolfo Babatz, explained that the platform will allow a smartphone owner – whether business or individual – to use his or her device as a credit or debit card processing terminal in Mexico and other countries where Spanish is spoken.
The mobile payments company is based in San Francisco and Mexico City and has raised considerable startup funds.
They were able to bring in $1.5 million from a number of investors that include: ACCION, Alta Ventures, 500 Startups, and Karl Mehta. Among those, Karl Mehta is the former chief executive and founder of PlaySpan, a virtual payment and goods company that Visa acquired in 2011 for $190 million. Mehta is now a Menlo Ventures partner.
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Clip has already developed a credit card mobile payments reader that plugs into the device headphone jack of a smartphone or tablet based on the iOS or Android operating systems. In order to use it, the free Clip app must be opened, and the amount to be charged is entered. The card is then swiped in the encrypted reader, at which time the consumer enters his or her cell phone number. A 4-digit text message (SMS code) is sent to the customers smartphone and that number is entered by the customer into the Clip app. If the code is a match, the customer signs for the transaction and it is completed. At that time, a digital receipt is sent to the customer via email or SMS.
According to Babatz, in Mexico, there isn’t a considerable credit card infrastructure in place, which requires many consumers to have to wait in long lines to withdraw cash when they want to spend. This opens up a considerable opportunity for this mobile payments service.