Austin is a pretty tech-savvy city, so Malauzai cofounder Robb Gaynor knew he was on to something when found that even this place had a dearth of small-business mobile technology.
"We looked at small and midsized businesses in Austin.and found that 8% had an app," said Gaynor, who is also Malauzai's chief product officer. "And none had mobile payments."
That, and a query from one of Malauzai's bank software clients, Redding Bank of Commerce in California, sparked an idea to create a wallet app that's geared toward small businesses that may not have a brick and mortar physical point of sale, but have also not yet made the leap to mobile commerce.
Rather than require consumers to sign up for a proprietary mobile wallet, Malauzai's Mox Pay uses remote deposit capture technology to take images of checks, credit and debit cards to enable mobile payments.
"There is untapped potential out there because small businesses are too small for commercial mobile apps," said Ed O'Brien, director of the banking channels advisory group at Mercator.
Malauzai built Mox Pay as an extension of its retail banking software, which integrates transactions with accounting software to synchronize transactions with invoices.
"The context is the old model of biller direct," Gaynor said. "Some people go directly to the biller and we want to get apps out to the biller."
Malauzai is targeting a niche that Gaynor said is underserved by most mobile app publishing technology--the businesses that take occasional or recurring payments for services but do not have a steady flow of customers.
The software company envisions its adopters will include homeowners associations, rental collection or church groups. While Malauzai retains the card image option, the payments are typically the kind that still involve a high volume of paper checks, which remain a substantial payment method despite the focus on digitizing transactions. The images trigger electronic transactions that run on the ACH rails.
Mox Pay focuses on homeowners assocation and similar businesses that collect dues or recurring payments by check, so the app would not have universal appeal, Gaynor said, adding that Starbucks' successful mobile app suggests businesses of all sizes and models can have a successful branded mobile app that can accept payments.
"Because the [third party wallets] are delayed and business apps are taking off, we think these businesses can look at Starbucks and say 'why wait for Apple Pay?'," Gaynor said.
Banks are also seeking to offer their own branded mobile wallets as an alternative to Apple Pay, but consumers are also warming to the idea of having a separate app for each merchant they frequent, Gaynor said.
"Does it make sense to have 40 payment apps?" Gaynor said. "I already have business apps open and it would be convenient to pay on those apps."
Malauzai plans to offer the service to merchants through their banks. The first adopter, Redding Bank of Commerce, which initially asked Malauzai to build a small business payment app, is using Mox Pay to enable its homeowners association clients to accept payments for dues and other fees.
"We needed a solution that would not only enable our customer's clients to make payments in the traditional manner, but also write checks," said Blake Pelletier, senior vice president and CIO of Redding Bank of Commerce, in an email.
Mox Pay will reside in a market that includes Square, PayPal and other mobile point of sale and account transfer companies that offer invoicing as a merchant service. And other payment companies such as Flint utilize the smartphone's camera to execute transactions.
And it's not necessarily a barrier to adoption for lots of individual businesses to have branded mobile payment apps, according to Joe Walent, a senior analyst with the Emerging Technologies Advisory Service at Mercator.
"There are different schools of thought on that. One is people are usually only active on one to three apps, which is a lot of the reason behind have universal mobile payment applications," Walent said. "But on the flip side is the mobile payment apps that have been the most successful have been merchant specific."