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May 28, 2013
Mobile payments are becoming more and more popular around the world. As such, the startup Clip is getting in on that market, having raised startup money to create a mobile payment system for Mexico and other Spanish-speaking countries.
Clip is located in San Francisco and Mexico City, and aims to turn a mobile phone into payment card processing terminals for businesses and individuals, similar to Square and other such mobile payment tools. It recently raised $1.5 million from several investors, including Alta Ventures, ACCION, and the founder of PlaySpan (News - Alert), Karl Mehta.
In Mexico, there is not much in the way of credit card usage. Customers often have to wait in long ATM lines to pay in cash, even if they have cards available; only a small amount of merchants accept credit payments, due to the long and arduous process of getting a point-of-service terminal. Clip can cut out the middleman and let customers make purchases using their payment cards with ease, and merchants don’t have to go through multiple frustrating steps just to set it up.
“I worked at a large technology company before, and when they exported their technology, it was fixed, with not much opportunity to adapt it,” explains Adolfo Babatz, CEO and co-founder of Clip. “With our focus on security, we can give consumers confidence that they will be charged the right amount when they process the card.”
Of course, Clip does have some differences to help it stand out from its competitors. This system is designed with a focus on the Mexican market in mind, and is designed for their tastes and preferences. For example, many people there like to pay in installments, which Clip will account and allow for. It understands the payments ecosystem there, and will take advantage of it. There are plans to eventually expand Clip into the U.S., but that will come at a later time.
Security is always an issue with any payment system, but Clip offers an authentication method to help combat theft or fraud. It sends a four-digit text message code to the customers when they make a purchase, allowing them to confirm the sale and receive a receipt without fear of getting their data stolen or additional charges.
Given the growing popularity of mobile payments, and the difficulty merchants face when trying to set up payment card systems in Mexico, this is a great time to take advantage of a market waiting to be reached. Clip’s backers seem to agree with the sentiment, and it seems their money is well-placed, as Clip’s plan is very likely to bring a mobile payment system to a market that sorely needs it.
Edited by Alisen Downey