These days, paying for anything, whether it be a coffee in Cambridge or a frozen yogurt in Wayland, can be quite an experience. With so many “point of sale” options, such as LevelUp, Leaf, and even Square, it can be quite a challenge to figure out exactly HOW you want to pay for a product.
Take, for example, Voltage Coffee in Kendall Square. At the counter, they have a LevelUp reader as well as a Leaf mobile credit card terminal. For the coffee shop, allowing more than one option to accept its customer’s payments is a no brainer, especially with so many (local) technologies becoming major players in the mobile payment sector. However, giving its customers multiple payment options can create almost twice as much work at the end of the day when recording and processing the day’s sales. Not to mention the constant presence of the unsure consumer, standing with a credit card in one hand and his cell phone in another, trying to figure out which manner of payment to use.
Merchant Warehouse, the Boston company that has been in the credit card terminal game for fifteen years, has created a product aimed at simplifying mobile payments for both the consumer and the merchant.
By developing its Genius payment platform, Merchant Warehouse has found a way for businesses to accept all types of payments-mobile, credit card, and even loyalty reward and discount cards-all on one device. In making a pivot from a focus on providing traditional credit card payment processing for merchants to a what it calls a “Customer Engagement Platform", Merchant Warehouse is taking a strategic risk.
The company is taking a chance that their experience in processing credit cards will enable the Genius platform “to encourage the greater adoption of mobile payments,” as Henry Helgeson, CEO and co-founder of Merchant Warehouse, explained.
Helgeson further described the thinking that went into Merchant Warehouse’s recent focus on software. “We are moving from a strict credit card acquiring model to a technology provider," he said, “[we want to become] more of a facilitator to all these mobile payment services.” Helgeson added, “Our focus right now is completely around the value we can provide around the payment for the merchant.”
Bootstrapping the company right out of college fifteen years ago, Hegelson explained how his company's thinking has evolved. “We started by selling terminals online. Our first pivot was that we realized the [possibilities for] the point of sale systems and we became specialists in the POS industry for payments.” He continued, “We realize payment is important, but there is a much bigger value proposition and a much bigger story that the payment is just the final step in.”
Seeing a need for someone to act as a funnel for the wide range of mobile payments and rewards options, Merchant Warehouse created their new product. “Our Genius platform helps consumer and merchants engage and provides that last mile of connectivity to the point of sale between [mobile] wallet providers, credit card providers, and the merchant's POS system.”
The Genius platform integrates credit cards, rewards programs (cards, discounts, etc.) and various mobile payment applications, including LevelUp. Merchants can choose to download software through the platform for whichever payment services they want to provide their customers. As such, Merchant Warehouse’s platform allows its users to modify how they accept payments as trends in the payment market change.
Merchant Warehouse might be one of the more successful and potentially integral Boston companies that no one is talking about. With the numbers that Helgeson shared, “close to 10 billion in 2013 credit card volume processed and about 78,000 merchants using [Merchant Warehouse] terminals,” the company is poised to leverage its existing client pool to implement the Genius platform on a wide scale basis.
The company already has 300 workers in its Boston office as well as many workers in remote offices throughout the country. Additionally, they just opened an office in Belfast. The Ireland location is going to be for software development on the Genius platform; moreover, Merchant Warehouse is planning to hire roughly seventy employees in the Belfast area over the next couple of years.
Keeping its roots in Boston, however, has has been integral to Merchant Warehouse’s success. As Helgeson said, “There is a perfect balance for a startup in Boston.” “You need to be young, creative, and energetic,” he added, “there is a creativity in Boston that you don’t see anywhere else.”
Making the major transition from one business model to another is a risk that is already starting to pay off for Helgeson and Merchant Warehouse. Recently, the Genius Customer Engagement Platform was recognized at the MITX Innovation Awards as “Best Digital Innovation from a Large Enterprise.”
With a vision to harness all the possibilities of mobile payment in one place, Merchant Warehouse could be a major player in the tech/innovation community, in Boston and beyond, as mobile transactions become the standard method of payment for consumers in the years to come.
Dennis Keohane is a staff writer for VentureFizz. You can follow Dennis on Twitter (@DBKeohane) by clicking here.