Even in 2018, when mobile commerce and mobile point of sale are commonplace, fintechs are able to find plenty of niches stuck in the past.
For activity-based operators such as schools and sports leagues, there's still a 20th-century mindset for collections and communications that Venmo and other P-to-P companies are targeting, along with a new group of specialized startups.
"These markets have historically had primitive payment systems," said Dave DuPont, founder and CEO of TeamSnap, an online management portal for sports teams and league administrators.
TeamSnap, of Boulder, Colo., wants to do away with manual clipboards and sign-up sheets. It automates schedules, game statistics, rosters, photo sharing, assignments, team home pages, and sponsorships.
For many sports leagues, even if these activities have been digitized, they all use separate websites. By centralizing these activities and adding fee collection, TeamSnap hopes to meet a market niche that a more generalist payment or sports league site would not.
The company has partnered WePay to build TeamSnap Payments. TeamSnap, which also offers PayPal as an option, is using WePay to support invoices, installment payments, ACH payments and chargebacks. TeamSnap's fees are 1.99% plus $0.99 per transaction for direct bank transfers, 2.99% plus $0.99 for nonprofit credit card payments and 3.24% plus $0.99 for for-profit transactions.
"We realized that one of the major activities and pains for sports orgs is collecting money for participants, so the partnership with WePay is aimed at facilitating that," Dupont said.
TeamSnap views WePay, a unit of JPMorgan Chase, as a way to ease navigation for payments without requiring a redirect to PayPal to set up a payments page and support for refunds. TeamSnap did not answer other questions about its relationship with PayPal.
There are startups cropping up that serve payment needs for specific purposes as an alternative to general peer transfer apps such as PayPal or its Venmo subsidiary.
Bursari, a startup based in Cocoa Beach, Fla., uses a software development kit to accept school payments for dances, sports teams and other activities via mobile apps, websites and other digital options. Another startup, Script, serves a similar school demographic.
Sports leagues can also use payment startups such as Groundwork, which handles payments and league management needs via a mobile app.
The difference with school payments and sports leagues is the a longer list of payment needs that change quickly over time and can benefit from a centralized management portal, DuPont said. "With schools you have a finite set of things that you're paying for. But in our case there can be participation fees, uniforms, camps, training, trips — all sorts of things."
These specialist companies will face challenges in going up against the established payment companies, according to Ray Pucci, an associate director at Mercator Advisory Group.
"Opportunities for this market require some other need or feature besides a payment, such as in not-for-profit organizations and group or league activities," Pucci said. "The rapid expansion and the increasing adoption of the P-to-P platforms will continue to meet the needs of both basic and special purpose … meanwhile, the flexibility that PayPal offers for group payments provides another alternative. So I think that major players are nimble enough to handle special purpose needs."