Rooam's creation of a mobile application to open and close tabs at bars and restaurants has followed the modern mobile payment playbook: Develop a use case that will resonate with consumers and their smartphones, and pick up a partner that could potentially acquire your technology.

In narrowing down its application as one that makes it easier for consumers to pay for the time they spend consuming drinks at a bar or restaurant, Rooam made a common mobile payments play.

It is similar to Starbucks using mobile payments to make it easier for patrons to get a daily coffee fix, or a commuter to pay train fare or for a parking place, or for someone to flag down and pay for an Uber or Lyft ride through their smartphones.

Junaid Shams, co-founder and CEO of Rooam.
Junaid Shams, co-founder and CEO of Rooam.

And a key partnership with PayPal will allow the Washington, D.C.-based Rooam to move from local D.C. bars to taverns in potential new markets such as Chicago, Miami and Los Angeles.

"PayPal has been an amazing partner in processing the payments through Braintree," said Junaid Shams, co-founder and CEO of Rooam, which announced its formal rollout May 10. "They have helped us and guided us through technology advancements."

There is potential for Rooam to establish better processing rates from Braintree in the future through higher volume, Shams said, a move that could help the company generate shared revenue beyond the $1 fee it charges on the user side for each use regardless of tab size.

The bigger picture, however, includes the potential for Rooam technology to be under the hood of a larger provider. In that regard, Shams said it is "absolutely" possible that a large company like PayPal could target Rooam technology for acquisition in the future.

But that's not Rooam's call at the moment. The company has to first see if it can continue adoption momentum for an app it hopes will operate in more than 100 locations in D.C. over the next couple of months.

Rooam and companies like it continue to be logical targets for larger payment processors and technology companies, even though the acquisition of startups has cooled slightly from the early days of mobile payment and new fintech technology development, said Jeff Crawford, senior consultant with First Annapolis Consulting LLC.

"North America remains a big market, and payments remains a pretty good investment area for enabling retail payments, merchant acquiring solutions or payment gateways," Crawford added.

Mobile payments adoption is still in its early days, so there will likely be "fits and starts" for technology companies that can't advance too far beyond testing and first-phase rollouts, Crawford added.

"But those that develop an attractive use case and enough adoption can become an acquisition target for the larger players," Crawford said.

Rooam may fall into that category at some point, but the current mission is to get more bar/restaurant operations to understand the benefits of the mobile app, and get more consumers finding it to be the easiest way to pay without waiting to get a server's attention.

"For us it was a matter of understanding what is out there and building a product to match with the existing flow in the bar," Shams said. "It doesn't require any hardware and it integrates directly with the main system. One of the main reasons we have traction in D.C. is that it operates as a mobile plug-and-play environment."

Users of the Rooam app simply tell waiters or bartenders that they have opened a tab on the app, where they have linked a payment card when initially registering. It is a one-click process to open a tab and one-click to close it, operating in the same manner at any location accepting Rooam, Shams said.

"We are users of the product ourselves and we wanted to build something that would be easy to use," Shams added. "We want it to become a brand so much so that when you go to a bar or restaurant, it is a technology you are thinking about using."

If consumers find it to be a seamless payment process that also protects their cards, it is likely to catch on as a practical mobile payment use case, said Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.

"The Rooam app could really work well because people can get nervous about handing over a card, and they start wondering if the card was left by the point-of-sale register and someone could copy it," Arminio said. "If you can control that aspect of the equation in that setting and not worry about your card being compromised, that's a good thing."

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