Dorado Trend Watch Q2 2012

TrendWatch 2.0
Q2 2012
Payments System Industry
Synopsis

Notice: Materials contained in this document are drawn from several media sources and Dorado Industries is not responsible for their accuracy. Opinions expressed
herein are presented without warranty. Brand names are the trademarks of their respective service offerors.

Random Thoughts
Settlement? What Settlement? Then again, if you fly a lot, watch out. Most of the airlines in
Anyone else find it curious that the cornerstones of electronic OZ-land charge from AU$8 to AU$25 per ticket when paying
payments – issuers and acquirers (or bankers and merchants if with a credit card. When it happens in the U.S., think of it as
you prefer) – would squander seven years of acrimony not to just another baggage fee or meal-for-purchase tariff.
mention millions in resources wasted on lawyers merely for So, while the standard-bearers for U.S. electronic payments
the sheer pleasure of announcing a settlement that everyone engage in courtroom fisticuffs and legislative legerdemain,
hates? others like PayPal, Apple, Intuit, and Google are nonchalantly
Then again, what’s to like? Seven million merchants get to taking big bites out of the payments space and generously
share $7.25 billion, almost as meaningless to them as it isn’t rewarding their shareholders.
painful to Visa, MasterCard and the FI plaintiffs. A ten basis Clearly, a rousing chorus of kumbaya isn’t going to get the job
point reduction in interchange for eight months might be done but perhaps some co-dependent thinking by some of the
equivalent to free Starbucks coffee for a week, if that. And best and brightest from each side of the payments tug-of-war
merchants win the right to negotiate collectively on might help avoid losing the payments flag to others
interchange. Anyone with experience in the retailer world altogether? Just a thought.
knows that merchants pretty much hate and fear each other
just as much as they diss bankers so this settlement bone
probably isn’t going anywhere soon.
Then there’s the icing on the cake: merchants will be able to
surcharge credit card transactions. Well sort of. Consumers in
California, New York, Texas, Florida and six other states –
generally places where people want to live won’t be impacted
because surcharges are illegal under state law. Other state
residents probably needn’t worry too much anyway. For
instance, in Australia, a case study in over-regulation
consequences, retailers have been permitted to surcharge since
2003. As of 2010, fewer than 20 percent of small merchants You can keep your stinkin’ $7 billion!
and 40 percent of large players have done so.
Dorado Industries (310) 544-1316
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Table of Contents

2012 Predictions 4
TrendWatch Scorecard/Summary 5
2012 Payments Industry Yields 6
Interesting Quarterly News That Got No Respect 7
Q1 M&A/Investor Activity 11
Useful Links for More Information 18
Back in the Day 19

3

2012 Predictions
• Four new payments schemes designed to maximize mobile phone functionality while eliminating the need for
retailer check out lanes will proliferate – two will be launched by merchants, two from third parties.
Mar: More entrants in the QSR, fine dining and tavern sector. Waiting on the big box guys. Late add: Intuit acquires AisleBuyer, one of
the check out lane disrupters paying between $80 and $100 million.
Jun: JC Penney announces plans to eliminate its fixed site POS installations in favor of tablet and smartphone equipped roving
checkout personnel.
• CFPB or DOJ will put the buy-here, pay-here segment for automobiles and accessories out of business.
Mar: Looks like CFPB is using the shotgun approach - 10,000 notices to companies have been issued in the first six months of its
existence! Annual report was issued March 31, 2012. Worth a quick read at:
http://files.consumerfinance.gov/f/201204_cfpb_ConsumerResponseAnnualReport.pdf
Jun: Perhaps payday lending is getting all the attention since there are more of these lenders than the others. Then again, maybe
CFPB’s cup runneth over with credit card complaints posted by consumers.
• At least one of the top ten FIs will be merged out.
Mar: Nothing yet but it’s still early.
Jun: Might want to fire up the popcorn popper, this one could take a while.
• Congress will turn its back on efforts to repeal Durbin and/or materially alter Dodd-Frank.
Mar: Looks like Congress won’t have to do anything despite certain GOP candidates claiming they intend to repeal Durbin.
Jun: Two words: “election year.” Might not happen until 2013, if then.
• American Express will prevail in its suit with DOJ.
Mar: The longer the suit continues, the better this prediction looks.
Jun: Then again, the July 13, 2012 settlement with Visa/MasterCard could put things in a cocked hat.
• By yearend, China UnionPay’s base of cardholders will be 120 percent of Visa’s.
Mar: Could happen. After all, who would have thought AMEX volume would have topped MasterCard’s in 2011?
Jun: WTO finds China out of compliance with reciprocity agreements, excluding other acquirers from operating there. Might change
things.
• Nokia’s partnership with Microsoft will save it from extinction.
Mar: Nokia’s still in the game and swinging for the fences. Microsoft is trying mightily to make the deal work.
Jun: Maybe not if Windows 8 flops. We should know soon after its release date in October. Yet, if the iPhone 5 comes out in
Dorado Industries September, all bets are off for Nokia.
(310) 544-1316
4

TrendWatch Scorecard/Summary – Q2 2012
Industry Players To Watch
V/MA: UBS downgrades both to “sell” because of global economic woes;
something’s bound to happen. Interlink volume down 54 percent in Q2.
Isis: Bad reaction to issuer pricing, AMEX tucked in for now, and pilots
getting ready to roll out in SLC and Austin; plus $100 million in new
Positive
capital.
CFPB: Looks like the favorite club in the bag is a Big Berth driver and not
Mixed
a putter– ask Capital One.
Negative Groupon: Twelve M&A transactions in a year; several moving toward e-
commerce.
High 1. New Payment Forms clearXchange, the new P2P Payments Leader: Even though consumers
need to be customers of Wells, Chase and BofA (good luck with that),
Low 2. ATM Restructuring there’s enough mass here to alter the marketplace for all of us.
Apple: iOS6 and Passbook could put a crimp in some folk’s initial
Med 3. POS Volume Trend thoughts about mobile and digital wallets.

High 4. Legal/Regulatory Issues Market & Industry Situation
1 – Payments with your Twitter handle? Check out Chirpify.
High 5. New Venture Growth 2 – Co-branding still moving ahead despite the spate of signage litigation.
Meanwhile BofA has reduced its ATM fleet by 9 percent citing
Med 6. Earnings Announcements profitability issues with off-site deployments.
3 – Mixed messages involving Interlink, other PIN debit networks.
High 7. Industry Investments 4 – CFPB tees off on Capital One for advertising practices. Good news:
House passes ATM signage reform law. Waiting on the Senate.
5 – Lots of new P2P players and social media houses moving into payments.
Some good, others not so much.
6 – Still barely chugging along. No big surprises (other than MSFT’s $6.0
billion write-off and V/MA settlement hits).
7 – 77 transactions totaling $3.4 billion invested in e-commerce startups and
other players during Q2.
5

2012 Payments Industry YTD Yields
While the DJI and S&P kicked in lackluster YTD returns of 5.4 and 8.4 percent respectively, our
basket of payments industry equities posted an average YTD yield of 16.6 percent. Not bad for
industry that no one knew or cared about a decade ago.

Industry Player 12/31/2011 6/29/2012 Price  Cap Value  YTD 2012 Yield

Alliance Data Systems $ 103.84 $ 135.00 $ 31.16 $ 1,854.0 30.0%
Cardtronics $ 27.06 $ 30.21 $ 3.15 $ 128.2 11.6%
Discover Financial Services $ 24.00 $ 34.58 $ 10.58 $ 5,087.9 44.1%
Euronet Worldwide $ 18.48 $ 17.07 $ (1.41) $ (71.1) -7.6%
Fidelity National Information Services $ 26.59 $ 34.08 $ 7.49 $ 1,429.1 28.2%
First Data (Future Use)
Fiserv Inc. $ 58.74 $ 72.22 $ 13.48 $ 2,101.5 22.9%
Global Cash Access Holdings $ 4.45 $ 7.21 $ 2.76 $ 212.8 62.0%
Green Dot $ 31.22 $ 22.12 $ (9.10) $ (370.8) -29.1%
Heartland Payment Systems $ 24.36 $ 30.08 $ 5.72 $ 213.9 23.5%
Jack Henry & Associates $ 33.61 $ 35.52 $ 1.91 $ 160.2 5.7%
MasterCard Worldwide $ 372.82 $ 430.11 $ 57.29 $ 7,413.3 15.4%
NetSpend $ 8.11 $ 9.19 $ 1.08 $ 94.8 13.3%
Online Resources $ 2.42 $ 2.43 $ 0.01 $ 0.3 0.4%
TNS $ 17.72 $ 17.94 $ 0.22 $ 5.5 1.2%
Total System Services $ 19.56 $ 23.93 $ 4.37 $ 862.6 22.3%
Visa $ 101.53 $ 123.63 $ 22.10 $ 18,694.4 21.8%

Sources: Company releases, Morningstar.com, Bloomberg.com
2012 YTD yield excludes dividends; based on 12/30/11 and 6/29/12 closing prices
6

Interesting News This Quarter
Subject Source/Date Substance
Dwolla TechCrunch • Iowa native Dwolla launches FiSync, its real time money transfer system that circumvents the
June ACH system. Veridian Credit Union based in Waterloo, Iowa (naturally) is the first FI to enroll
in FiSync. Dwolla is also destined to become imbedded in a transportation app for smartphones.
NYC startup GetTaxi uses a smartphone app to enable commuters to seek out and hire taxis
across their wireless network. If it works out for Dwolla, the payment is likely to arrive before
the ride ends. Late update: Dwolla leaks to the American Banker that twelve FIs have enrolled in
FiSync. Not yet an avalanche but worth watching.
Facebook Finextra • Facebook sure seemed certain to be the first successful and sustainable creator of a digital
June currency for the mass market (sorry Bitcoin). Facebook Credits are available in prepaid card
form at Wal-Mart and other retailers and for digital purchases and game-playing on the social
media network, Credits were the only game in town. Now it appears that Facebook will reverse
its course and will allow developers and digital goods sellers to accept payments in local
currencies rather than maintain a market for Credits against those same currencies. Consumers
will now be able to convert their local funds into game currencies without having to execute a
double conversion. Of course, Facebook will continue to take 30 percent off the top of all sales.
mPowa American Banker • UK based entrepreneur Dan Wagner launches mPowa, a mobile phone app for payment
June acceptance in multiple currencies. mPowa claims to differentiate itself from Square by catering
to the chip and PIN crowd. No matter, Square has already put a Cease and Desist letter over
mPowa’s bow with respect to a promotional photograph claimed to be right off of Square’s
website. Pricing is ultra low-end at 25 b.p. for each debit and credit card payment. Seems a bit
light given today’s interchange and acquirer fees.
National Payment Card PaymentsSource • By all accounts, National Payment Card should have gone the way of the dodo and all the other
Association June decoupled debit offerors and become payments system road kill. Yet, at 15¢ per transaction, the
company’s decoupled debit solution does come in under the Durbin 24¢ cap and remains
appealing to those issuers willing to accept the risk attached to delayed ACH settlement. And
now the company offers open-loop cards that authorize across the Pulse EFT network.
Transaction volumes remain small at 800,000 per month; following the other mobile payments
lemmings, the company is moving forward with plans to become integrated with several digital
wallets and applications.

7

Interesting News This Quarter – Continued
Flint Mobile Finextra • Flint enters the mobile-device-as-POS-terminal fray and garners $3.0 million in VC funding from
May Storm Ventures and True Ventures. The Flint approach relies on use of the merchant phone’s on-board
camera to record a picture of the payment card’s 16 digit PAN. The image is augmented with user-
supplied PIN and ZIP for authorization and settlement purposes. Receipts are emailed and each
purchase can be posted on the merchant’s Facebook Fan page. Merchant services fees are modest at
1.95 percent plus $0.20 for debit and 2.95 percent plus $0.20 for credit.
LevelUp Mobile Payments • Invigorated with a fresh load of capital (next section), LevelUp draws a line in the acceptance pricing
Today sand and eliminates all transaction fees charged to merchants who accept its payment method. The
July “Interchange Zero” model only assess fees to merchants for customer acquisition and loyalty
campaigns. As to the latter, LevelUp charges 35¢ for every incremental dollar brought in by the
campaign. Looks like the risk-sharing ratio is about right; now if LevelUp could just scale up, we’d
really have something to talk about.
Kmart/Green Dot PaymentsSource • Kmart and Green Dot have inked a deal for distribution of the new Halogen Reloadable MasterCard
throughout the retailer’s 1,200 stores. The card is competitively priced versus Wal-Mart and offers free
withdrawals at MoneyPass ATM locations across the country. As with most GPR cards, fees can be
waived in exchange for monthly reloads and use of other services. Green Dot benefits through this
relationship by lessening its dependency on Wal-Mart, a matter of some concern with the stock
analysts. Curious side note: GDOT traded much higher when it was announced that Wal-Mart was
dropping its American Express “Bluebird” prepaid program than it did when the Kmart deal was
announced. Go figure.
Wipit PaymentsNews • Wipit delivers a pay-with-cash-everywhere option for those without deposit accounts but with a mobile
May phone. Consumers fund a virtual, regulated, account by depositing funds with participating merchants.
A mobile phone app keeps track of balances and spend. As an alternative, the Wipit virtual account
could be funded with a credit card. The virtual account can be used in person or on the web for
purchases and cash withdrawals. Ria Financial powers a bill payment function tied to the Wipit account
as well. The Wipit management team looks extremely strong with good industry experience. This
could be the one to watch in the short-run. Western Union has a pretty big head start however.

8


ZipZap Press Release • ZipZap competes against Wipit without being wedded to the mobile form factor. 700,000 sites in the U.S.
May can be used to replenish the CashCade aka Cash Payments account. ZipZap is another example of a early
stage player with good management, strong funding (Bloomberg and TriplePoint), and a reasonable approach
to payments. That said, there certainly are a lot of entrants in this underbanked sector. Wonder when the
weeding out process begins?
Bump Technologies Bank Technology • Strange how the world works, right? Three years ago, PayPal announced integration of Bump for its first
News foray into mobile payments. Empowered by the marquee endorsement, the Bump app has attracted 80 million
April users. Oops. PayPal launches PayPal Here and removes Bump leaving but one option for the technology
company – it is moving toward spinning out a separate entity to promote Bump Pay, a standalone app for P2P
payments. Bump Pay will still require that both parties have the app and linked PayPal accounts but there’s
no dongle or wedge to attach to the phone and, of course, no merchant services fees. A niche market in the
extreme but with 80 million adherents, there could be a good outcome for Bump.
BillMyParents Bank Technology • And then sometimes the air just comes out of the balloon altogether. BillMyParents started life as a digital
News online parent-billing scheme but the company experienced strong headwinds from retailers unwilling to
April modify their POS systems to accommodate yet another payment option. So BillMyParents has resurfaced as
SpendSmart, a MasterCard-branded prepaid card that parents can use to fund teen spending via real-time
notices and the ability to veto purchases. By taking this well-worn path BillMyParents is likely to experience
more headwinds; this time from well established competitors with years of experience in the teen card realm.
Despite our positive comments in Q1 for the simplicity of the BillMyParents model, we foresee tough
sledding ahead.
PowerPay LLC PaymentsSource • PowerPay puts a shot over Square’s bow by introducing a smartphone and tablet app (AppCharge) that
June transforms a merchant’s mobile device into a card acceptance terminal. The unique twist here is that
AppCharge will be distributed only through ISOs (Square doesn’t like them) and only to their existing or
future merchants. All of which means the merchants using AppCharge will have merchant accounts with a
sales agency which will be setting the discount rates and ancillary fees. In the beginning AppCharge will not
accommodate PIN debit transactions, contactless, or QR code transactions. Clearly, an attempt to protect ISO
merchants from Square, Intuit, and VeriFone’s new Sail offerings. Not yet a battle royal, but not a powder
puff derby either.
9


Universal Business PaymentsSource • Older TrendWatch readers will recognize the name Bipin Shah. Bipin was one of the founders of the MAC
Payment Solutions July network and went on to become CEO of GenPass. Along the way, Mr. Shah left his fingerprints on several
Acquisitions Corp. industry milestones including surcharge-free ATMs and prepaid cards. He withdrew from the industry several
years ago as the result of a family conflict. Universal Business Payment Solutions Acquisitions Corp.
(now there’s a mouthful) is the brainchild of Mr. Shah and Peter Davidson, another payments industry
veteran. UBPSAC has raised $75 million in capital and bought three companies – Electronic Merchant
Systems, an ISO; JetPay LLC, a processor; and AD Computer Corp, a payroll processor and tax filing outfit.
Bipin’s latest tactic focuses on the full scope of business needs for small merchants and his PacMan strategy
is heading in that direction. Nice to have one of the veterans back at it.
Bank of America American Banker • Bank of America once again vouches for the veracity of the old adage “it’s harder to manage technology
July than manage technology vendors” as it reverses its 2006 decision to insource processing for its consumer
credit card portfolio. The bank will return its processing requirements to TSYS for at least six years after
which it could do another about-face and exercise a new option to license TS2 software. A spokesperson
cited “aging technology” and “regulatory enhancements” as the primary causes for the reversal. About right.
Chirpify American Banker • Chirpify is another startup that blurs the distinction between social media and payments. The web payment
July gateway enables Twitter users to link their social media handles to their PayPal accounts and make P2P
payments, donate to charity, purchase or sell digital and tangible goods, and contribute to political campaigns
(perish the thought). Chirpify raised $1.3 million in Series A financing led by Voyager Capital earlier this
year and claims to have tens of thousands of users already signed up for the service. Discussions with several
banks are under way in an effort to enable Tweeting amongst users with debit and credit cards.
Groupon VentureBeat • Apparently Groupon isn’t satisfied with being merely an online couponing service and has quietly entered
May the payments industry through acquisition of Breadcrumb for an undisclosed amount. Breadcrumb operates a
mobile merchant POS system with iOS (iPhone/iPad) applications. Not solely a payments system,
Breadcrumb also manages shift schedules, payroll, and employee time clocking. Groupon continues to be
acquisitive as it shapes its ultimate space in the daily deals frontier; other tuck-in purchases include a travel
site, a place and deal data aggregator, and Adku, an e-commerce data firm.

10

M&A/Alliance Activity
Buyer/Investor Target Payments Emphasis Possible Strategy
Intuit AisleBuyer Mobile commerce enabler Intuit pays “between $80 and $100 million” to straddle the
gap between consumers and retailers in mobile shopping
and payments. AisleBuyer’s mShop and mDine apps
provide consumers with online shopping and purchasing
tools while mClerk allows retailers to use mobile devices
for payment acceptance. Both app suites eliminate the
need for checkout lanes (not unlike what JC Penney is
trying to do.) Whether the price is on the high or low end
of the range doesn’t matter. AisleBuyer’s earlier funding
amounts to less that $8.0 million; a nice payday for Old
Willow Partners and the founders.
Ignition Partners WePay Online merchant services Calling itself the “anti-PayPal” option for online
Highland Capital merchants must have attracted some attention. The new
Partners and returning investors injected another $10 million for
August Capital expansion purposes – twice previous levels. The WePay
approach for merchant services avoids the need for
retailers to have a separate services account in much the
same way Square and PayPal operate.

Capital One BankOns Mobile couponing Capital One pays an undisclosed amount for BankOns
(think “bank + coupons”) , a one-year old startup.
BankOns bills itself as the “anti-Groupon,” by asserting
that it enables banks to deliver geo-centric and spending-
history enhanced deals to consumers leading to a greater
level of coupon up-take. Looks like Capital One
continues to be enthralled with mobile commerce.

11

M&A/Alliance Activity - Continued
Mercury Payments Sundrop Mobile Mobile payments and loyalty There may be no less-sticky a relationship than that between a
Systems retailer and its merchant services provider – relationships come
and go in nanoseconds. So it’s not surprising that Mercury
Payments Systems would purchase Sundrop to improve its
point-of-sale offerings for small and mid-tier retailers and to
retain existing and future merchants. We’re likely to see more of
these value-add tuck-in acquisitions as Durbin and the new
credit card settlement inch merchant acquirers closer to the
commodity closet. Terms of the deal were not disclosed.
Wright Express CorporatePay Private label/cobranded prepaid Wright has been forcing itself to diversify its U.S. based
cards transportation-centric payment offerings for a half-decade. This
relatively small ($27.5 million) transaction puts Wright in the
European payroll card business. CorporatePay cards took on
$400 million in loads in 2011.
Citi Ventures Jumio Mobile commerce Citi Ventures takes a lead position in Series B funding for
Jumio, the inventive folks that use smartphone on-board cameras
to validate that a payment card is legitimate (“Netverify” )and
accept the card for mobile payments (“Netswipe”). To date,
Jumio has raised $35 million from some pretty heavy hitters –
Facebook cofounder Eduardo Saverin and VC firm Andreessen
Horowitz, for example.
Visa SecureKey Authentication solutions The four payments schemes and others plunk down another $30
MasterCard million in expansion capital to keep SecureKey, the de facto
American Express winner of the m- and e-commerce authentication race, in full
Discover expansion mode. Not content with dealing exclusively in
Others payments, SecureKey is now going after government
information access portals; recently winning the race for Canada.
12

Innovation Endeavors Tango Card Prepaid/Mobile payments Seattle-based Tango Card, the engine behind Bing
Western Technology Rewards, FedEx, Extole, and Shutterfly, lands another $1.8
Investment
million from new investors in its already fat $40 million
Series A round of funding. The company’s emphasis
includes incorporating digital goods into corporate client
rewards and gifting programs.
Continental Investors SCVNGR Mobile game and payments SCVNGR’s mobile payments app, LevelUp, receives a $12
Transmedia Capital operator million injection of new capital from returning and new
Highland Capital
Partners investors. LevelUp is now available for use at 3,000
Google Ventures merchant partner sites including Johnny Rockets and Ben
Balderton Capital & Jerry’s. The app entails credit and debit card linkages
plus the standard fare of loyalty-promoting services. Funds
will be used to financing further U.S. roll-outs.
Maveron Lemon Mobile wallet provider App provider Lemon receives $8.0 million in Series A
Lightspeed Venture funding from a host of investors and launches its “smarter
Partners
CampVentures wallet” approach. The app relies on the user’s smartphone
Others camera to record an image of each credit, debit, and loyalty
card which is saved in the wallet. A four-digit PIN is used
to access the payment cards in either physical or online
shopping experiences.
Chexar Networks Clear Payments Check conversion technology Chexar Networks focuses on check cashing, bill payment,
money transfer and related services delivered to the U.S.
underbanked population. Clear Payments owns proprietary
technology the enables conversion of checks to a good-
funds model in addition to offering payment processing
services in the e-commerce space. Terms were not
disclosed.
13

Verizon Isis Mobile payments Now we’re talking some real money! Verizon and T-Mobile
T-Mobile consortium raise their collective investment positions in Isis, the mobile
payments consortium , by $100 million. No one said that
launching a new payments platform was going to be cheap but
we wonder if Google, Visa, and the other mobile wallet
peddlers are going to stay in the game with these stakes?
Terry Semel Openbucks Gift card network Openbucks enables online shopping without a major debit or
Greycroft Partners credit card by allowing consumers holding Subway, CVS,
BV Capital Burger King, Shell Oil, and Circle-K closed loop gift cards to
Clearstone Ventures use them to purchase digital and durable goods. Seems like a
Others good way to get rid of nuisance balances on old gift cards or to
make purchases anonymously. Investors shelled out $4.8
million in Series A funding to grow the network of card issuers
and acceptors.
PayPal Card.io Mobile technology provider PayPal swoops in to capture another innovator in the
smartphone technology field and adds yet another feature to its
burgeoning play in mobile payments. It isn’t clear how the
card.io app (which is also used by the Lemon and SCVNGR
LevelUp offerings) will differentiate PayPal but it’s a safe bet
that the human capital netted in the deal will help build a better
mousetrap. These card.io guys are really sharp!
Carmel Ventures Tapingo Mobile commerce platform Tapingo, with offices in San Francisco and a data center in Tel
Aviv, targets university students with a mobile application that
supports goods and services purchases at merchants in physical
locations adjacent to college campuses. Carmel Ventures is
making a $3.5 million bet that Tapingo will remain on students’
devices once they matriculate.
14


Intel Capital CashStar Digital prepaid system CashStar, based in Portland Maine, raises its fourth tranche of
Passport Ventures funding, this one totaling $5.0 million. The company delivers
FTV Capital customized gift and loyalty programs to Home Depot, The
Others Gap, Pottery Barn and dozens of other well known retailers.
Funds are targeted to help buffer CashStar from the
headwinds likely to be blowing as mobile wallet providers
start carving out new merchant relationships and their own
loyalty schemes.
Sequoia Stripe Merchant service provider Three of PayPal’s five co-founders have made investments in
Peter Thiel Stripe, a direct competitor on the acquiring side. This $20
Elad Gil million round comes on top of a similar funding tranche one
year ago. Stripe offers the opportunity to take nationally
branded payment types without having a merchant account or
gateway. Pricing is 2.9 percent plus $0.30 per transaction,
similar to both PayPal and Square. Stripe hasn’t gone
mainstream yet but the number of online merchants is
growing exponentially. Stripe’s secret sauce is its ability to
be integrated with virtually any online storefront in minutes.
Degicel M-Via Mobile SMS remittances M-Via was getting to be a bit long in the tooth so it changed
RRE Venture its name to Boom and reeled in new and returning investors
Matt.org for another $17 million. Boom claims presence in 31 markets
including the Caribbean, Central America , and South
America with “thousands of merchants” and 100,000 Boom
ATMs. Boom provides SMS-based remittance services for
the unbanked and immigrant population in the U.S.

15


Trellis Investors TabbedOut Restaurant/bar payments app Long a TrendWatch darling (for the innovation shone),
New Enterprise TabbedOut raises another $3.5 million + in addition to the
Associates $6.5 million raised earlier. TabbedOut concentrates on
restaurants and bars as clients and its application eliminates
the need for servers to be involved in settling up the dinner or
drink tab. Patrons can close out their tab at anytime and if
they forget, TabbedOut settles after the fact.
North Bridge Ventures Paydiant Mobile payments platform If you’ve been following the evolution of mobile payments at
Partners all, you’ve likely run into Paydiant, considered one of the
General Catalyst front-runners in white labeled mobile payments applications.
Returning investors have shelled out another $12 million to
finance expansion in both the bank and merchant verticals.
Competition in the space is going to be fierce with the likes of
MFoundry, Square, Isis, Google and PayPal all vying for a
chunk.
Cielo SA Merchant e- Merchant acquiring services Cielo SA is a Brazilian payments services provider
Solutions purchasing Redwood City, California –based Merchant e-
Solutions for $670 million. MeS was founded twelve years
ago by a couple of ex-BAMS senior executives and processes
about $14 billion in transaction s each year. Nice little
liquidity event for a couple of old payments war horses.
Good to see that happen from time to time.
Brightwell Payments Directo Payment card operator This acquisition links two old-line players. Brightwell’s
claim to fame is its OceanPay maritime paycard while Directo
has been serving the Hispanic market from its Atlanta
headquarters since 1998. Terms were not disclosed.
16


Private Investor Kuapay Mobile payments platform There’s another mobile wallet in town. Kuapay expands
beyond its roots in Chile and Spain to the U.S. with new
offices in Santa Monica. A private investor is footing the bill
with $4.0 million in new funding while southern California
KFC franchisees have stepped up to pilot the service in 100
locations. Kuapay’s wallet model is QR code based and
integrates with merchant POS systems or a Kuapay-provided
iPod Touch.
Earlybird Traxpay B2B online payments Traxpay, currently Euro-centric but heading for the U.S.,
offers real time B2B payments with its service which has
been developed in partnership with Accenture, SAP, and NTT
Docomo. Funds circumvent standard payments rails required
in other e-invoicing services. Earlybird is a dominant VC
player in Europe and has dropped $4.0 million into Traxpay
to kick start its entry into the United States.

17

Useful Links for More Information
We threw a lot of new names out again this quarter. Here’s a list of links for you to
learn more.

Company Role Link
Chirpify Twitter enabled payments www.chirpify.com

Traxpay B2B invoicing www.traxpay.com

BankOns Daily deal couponing for FIs www.bankons.com

Jumio Smartphone payments acceptance www.jumio.com

Tango Card High flying loyalty payments www.tangocard.com

Openbucks Closed-to-open loop card payments www.openbucks.com

Tapingo College-based mobile payments www.tapingo.com

Stripe Mobile merchant services www.stripe.com

18

Back in the day!

Most of us owe our careers in EFT to
the 389-page document depicted
here. Published in October, 1977,
the Final Report of the National
Commission on Electronic Fund
Transfers set the stage for the EFT
Act and put electronic payments on
the map in the United States. Sure,
it never made it to the top of the New
York Times Best Sellers list but it has
quite a plot, one which continues to
entertain and evolve today.

19

Dorado Trend Watch Q2 2012

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