Prizm Payments, a Sequoia Capital backed company, has is “on track to process $50 billion in transactions this year, up from $35 billion last year, reports TechCrunch, adding that it now has 30,000 point of sale processing devices and 10,000 ATMs in the country,” and is looking to launch a clone of the Jack Dorsey founded mobile payments facilitation service Square.
First up, processing $50 billion in transactions is a lot of money, but I’d be surprised is most of this isn’t primarily via Prizm’s ATM business, rather than the card based payment processing business. If it is mostly from the ATM business, then it is hardly remarkable. The withdrawal of cash should be seen separately from the merchant card processing business, and from what little we can see from Prizm’s website, their primary focus appears to be the ATM business.
The App Based Point of Sales Approach
Techcrunch says that Prizm will roll out a point of sales transaction device and dongle based service for merchants, to around 200 merchants, allowing them to accept card based payments either at a store, on on delivery. However, it’s not very clear whether the idea here is to enable commerce or to encourage withdrawals. Enabling commerce will mean that it would tie up with merchants to allow purchase of goods, while mobile ATM’s would be about partnering with banking correspondents to enable withdrawal of money at even retail storefronts. But business correspondents model is yet to blaze a trail.
Note that Prizm wouldn’t be the first company to get into the app and device based point of sales payment clone: recently MTS launched mPOS, a merchant focused service which uses a phone with an terminal that gets attached to the phone via the audio jack, which merchants can use for swiping cards. Paymate also launched PayPOS, a similar service.
The differentiation that Prizm will try and bring to this is that it will take a feature phone approach, instead of smartphones. This means that it will be available to a wider variety of merchants, and there may not be a need for merchants to buy a new handset or already have a smartphone to use the application and/or device.
We’ve asked Sequoia Capital to connect us with Prizm for more on their business. We’ll update with more in case we hear from Prizm