Point-of-sales systems are among the most basic automated payment tools a merchant needs. Unfortunately, many small Canadian businesses have to make do without them because of prohibitive costs of operation and complexity.
Lorne Lantz, who completed his computer engineering degree at the University of Manitoba, says Snappay, a mobile payment application is, probably the perfect low-cost solution to this problem. Since most merchants already have a smartphone, all they need to do is download the Snappay app and “they can begin accepting payments in minutes,” according to the Winnipeg native who now works from Snappay’s headquarters in Hamilton, Ont.
Lantz and his partner Jim Rudnick, a search engine optimization consultant, launched the product last month. Since then, the app has been downloaded by a number of small business operators both in Canada and the United States.
“Walk into any trade show in Canada and you’ll notice most merchants are selling $100-plus items but they’re accepting payments either in cash or the risky and slow hand-swipe credit card machines that have been around since the 1980s,” said Rudnick.
Lorne Lantz, who completed his computer engineering degree at the University of Manitoba, says Snappay, a mobile payment application is, probably the perfect low-cost solution to this problem. Since most merchants already have a smartphone, all they need to do is download the Snappay app and “they can begin accepting payments in minutes,” according to the Winnipeg native who now works from Snappay’s headquarters in Hamilton, Ont.
Lantz and his partner Jim Rudnick, a search engine optimization consultant, launched the product last month. Since then, the app has been downloaded by a number of small business operators both in Canada and the United States.
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“Walk into any trade show in Canada and you’ll notice most merchants are selling $100 plus- items but they’re accepting payments either in cash or the risky and slow hand-swipe credit card machines that have been around since the 1980s,” said Rudnick.
“Snappay let’s merchants of any size accept credit card payments easily and securely through the most convenient method possible, the smartphone which they already carry with them,” he said.
Snappay works on iPhones, iPads and Android phones. The application enables users to carryout credit card and PayPal payment transactions through their phones.
For now, Snappay makes money by charging merchants 3.9 per cent of the amount of transaction plus 30 cents for each transaction.
The company also has a $29/month plan for high-volume merchants.
Cutting through red tape
Many small merchants shy away from purchasing POS systems because they are too costly, said Lantz. “They often have to pay banks upwards of $50/month for use of the POS hardware. They could end up tied down to a three-year contract that cost as much as $2,000.”
Aside from that, Lantz said, POS applicants need to pass rigorous credit checks and fill up various documents. He said Snappay users are able to sidestep these requirements because the company’s app and service uses an e-commerce transaction model.
Snappay plans
In the U.S., he said, almost any company can set-up a mobile payment service easily. However, stricter Canadian banking rules requires a mobile payment company to partner with a bank, explained Lantz. By employing an e-commerce model, Snappay is able to operate by simply partnering with online payment firm PayPal.
How it works
In order to use Snappay people online need to download the app onto their smartphone. After filling in their information and agreeing to the service terms, within minutes, users can start accepting customer credit card or PayPal payments.
For example, when a customer makes a credit card payment for an item, the merchant uses the Snappay-enabled smartphone’s camera to scan the customer’s credit card (the camera only scans the credit card number).
Using the phone’s keyboard, the merchant can type in additional information such as purchased item, customer phone number and email address.
The payment is then forwarded to PayPal which instantly checks if the credit card numbers and account are valid. Once PayPal approves the transaction, the customer signs his signature on the phone’s screen and the payment goes through.
The merchant can send the customer a receipt via SMS.
“It’s really quick. I had a client in Indiana who downloaded the app at around 11 pm and was able to accept payment for $200 by 11:20 pm,” said Lantz.
As no credit card information is ever stored by our application, Snappay mobile POS system is fully PCI (Payment Card Industry) compliant and secure, Rudnick said. Here are some features of Snappay:
- Instant deposits to all merchant accounts
- Real-time payment processing through our secure gateway
- Full transaction log
- Digital signature and email receipts
- Ability to add tax and tip via user definable settings
- PCI-DSS (data security standards document) compliant
- No Hardware needed
- Available funds in U.S. dollars, Canadian dollars, British pound and Australia dollars
Canada’s growing smartphone adoption rate and relatively low number of company’s offering mobile payment services in the country conspire to make Lantz and Rudnick optimistic about Snappay’s future.
Vancouver-based Payfirma Corp. is among the few companies offering smartphone payment services here.
PayPal, also offers its Bump, Split Check and Collect Money, but because this requires both payee and collector to have the app on their phone, it is lease likely to be adopted by merchants. Although mobile payment is still in its infancy in Canada, some surveys predict that consumers will be spending about $119 billion by 2015 using their mobile phones.
Nestor Arellano is a Senior Writer at ITBusiness.ca. Follow him on Twitter, read his blog, and join the IT Business Facebook Page. 
