Hot new payments startups

A host of companies are desperate to crack the next wave of innovation which is likely to be pioneered by a startup company with a different take on how consumers want to pay in the future. Nic Fildes has our five hottest ones to watch

PAYLEVEN

WHAT THEY DO

Chip-and-PIN system for smartphones.

WHY THEY ARE ONE TO WATCH

This young company was developed in Berlin’s Rocket Internet incubator just as Square and iZettle started to catch the eye. The Payleven system, a terminal that connects to a smartphone via Bluetooth, targets the same customer segment as its rivals – the tens of thousands of small merchants that have been priced out of the market for chip-and-PIN readers. It does not support as many cards as iZettle, but has high hopes for a new terminal to be launched later this year that will bring contactless payments to small businesses and market traders by embedding near-field-communications technology.

TRANSFERWISE

WHAT THEY DO

International transfer service.

WHY THEY ARE ONE TO WATCH

Peter Thiel, the PayPal co-founder who also hit gold when he backed Facebook, put London’s TransferWise on the map when he invested in the then-obscure startup last year. It was set up by Skype’s first employee and it uses peer-to-peer networks to transfer money at a better rate than the banks. It has mounted an eye-catching marketing campaign on London bus stops to raise its profile, while also reaching out to other startups with free transfers. It has already processed £1 billion of funds and saved its customers £45 million in the process.

MONITISE

WHAT THEY DO

Software used by banks to enable mobile payments and accounts.

WHY THEY ARE ONE TO WATCH

Monitise is a genuine pioneer in mobile payments and has the pedigree – plus the backing of Visa and MasterCard – to see its vision through. The British company is no longer a startup, having been set up in 2003 by former rugby player Alastair Lukies, but it has maintained its small-company mentality and growth agenda despite brining major investors on board. It now has 350 banks on its books, a cash war chest of £100 million to pursue its global ambitions and has even won over risk-averse investors.

POWA TECHNOLOGIES

WHAT THEY DO

Smartphone payment processing and augmented reality.

WHY THEY ARE ONE TO WATCH

Flamboyant entrepreneur Dan Wagner failed to make it big during the first technology boom, but is determined that Powa will make its mark in payments. The mPowa mobile payment system, salvaged from the remnants of the notorious tech bubble casualty Boo.com, now includes software to allow users to buy goods simply by pointing a smartphone at them. A large US fund pumped $76 million into Powa last year which Mr Wagner believes will provide it with the muscle to expand rapidly around the world.

COIN

WHAT THEY DO

Plastic card that merges credit, debit and loyalty cards.

WHY THEY ARE ONE TO WATCH

Coin won’t launch until the summer, but the notion of “one card to rule them all” has caught the imagination in Silicon Valley. The Coin card replicates the data held on electronic strips on up to eight debit, credit or loyalty cards and allows users to switch between functions with the click of a button. Osama Bedier, the former head of Google Wallet, is an investor as is Square’s Jack Dorsey. Concerns over data security and whether a flat smartphone battery – it works via Bluetooth – could leave users without access to their cards, need to be overcome.