Hard on the heels of yesterday’s announcement that CVC Capital Partners had bought a majority stake in Skrill, the payments platform, comes the news that Powa, an e-commerce company, has raised $76m from a single investor to fund the development of its m-commerce venture, aptly named mPowa. This is further evidence that the pace of change in the payments world is accelerating and of the disruptive potential of mobile.
Powa, run by Dan Wagner, previously the founder of Dialog, operates a SaaS e-commerce platform and serves 280 retailers, also offering them marketing consultancy and strategies to optimise interaction with Internet search engines. From this base, the move into mobile point-of-sale was an obvious next step in a bigger mobile commerce strategy. mPowa is now offering retailers a low-cost chip and PIN card reader, front-end apps, mPOS platform and fully compliant access to payment gateways.
The m-commerce market is already crowded with a bewildering array of new propositions from companies such as Square, Monitise, Sumup, iZettle and Paypal. Payments and m-commerce are volume businesses and success will be driven by scale. Consequently, the key battleground will be in the recruitment of banking and distribution partners. Success will depend on having a trusted brand and an effective distribution system – to secure a large volume of smaller retailers or to convince the larger retailers to commit to a particular system.
mPowa has already signed deals with the First National Bank of South Africa and Portugal Telecom and has significant retail experience and contacts through the track record of Powa. Nonetheless building a leading position in this competitive sector will be an uphill task.