Salt Technology Inc. plans to take $2 million it has secured from private investors and parlay it into a cloud-based mobile payments rollout in the U.S. and Europe later this year.
The San Francisco-based company offers mobile network operators, banks and merchants various options for branded mobile wallets, contactless payments and mobile commerce loyalty programs.
"We are a complete mobile payments company for issuing, acquiring, online and offline transactions," says Brian Bogosian, Salt's chairman, CEO and president.
Salt Technology began operations in Toronto, where it still has an office, three years ago as a small, self-funded operation, Bogosian says. In the past year since he has been CEO, the company has gone after various partnerships and investors to help it develop an extensive mobile pay platform not relying on any one technology at its foundation, Bogosian says.
While Near Field Communication "has legs and a lot of money behind it," the contactless, two-way communication technology has not been adopted in the U.S. as quickly as in Europe, Bogosian says.
As such, Salt Technology's mobile platform can support NFC, peer-to-peer or mobile-browser-based payments, as well as cloud-based or remote quick-response (QR) code-based payments. Salt's Personal Payment Profile, which operates as the company's mobile wallet for consumers, initiates mobile payments for credit, debit and loyalty cards, and can hold tickets or transportation tokens.
"If you look at what's happening in the industry, all of the banks and carriers are investing in NFC," Bogosian says. "We think that NFC is a key technology for mobile payments, but it won't be the only one that consumers adopt."
Salt has to make itself stand out from a growing list of companies seeking to establish themselves in the mobile payments industry, says Jeffrey Green, director of emerging technologies and advisory services for Boston-based Mercator Advisory Group.
"Salt operates as a third-party provider, so for any telco or financial institution looking for assistance, they would be one of any number of companies willing to offer it," Green says.
Whether Salt will succeed when it launches its product will depend on how well the company can convince potential clients it can remain viable for the long haul and provide more services as needed, Green adds.
By offering various mobile payment options, Salt positions itself well in the evolving mobile payments environment, Green says.
"There is speculation now that the QR codes will serve as a bridge technology until NFC takes hold, which could take some time," Green says.
Salt will use a combination of direct sales and independent sales organizations to bring its software to market, Bogosian says.
Merchants who incorporate the Salt application interfaces for their branded wallets, credit cards or loyalty services will route transactions through Salt's payment gateway, Bogosian says.
"We built a payment gateway from the ground up because we wanted it to be full-functioning, able to handle any type of payment," Bogosian adds. "We were anticipating a world where there would have to be a variety of payments that come through our payment platform and wallet."
Salt uses the infrastructure that "Visa and MasterCard set up more than 30 years ago," Bogosian says. "We use the same authorization, settlement and chargeback processes."
Salt stores transaction history in the cloud or on the secure element of a phone handset so that no credit card data is exposed on a phone, he adds.
In the coming months, Salt plans to announce new partnerships with banks, processors and merchants. The mobile payments rollout is expected during the third quarter of 2013.
"Our message is resonating with some potential major partners," Bogosian says.