Seamless' strategy for its mobile wallet, SEQR, is simple and obvious: You can't scale internationally if you don't launch a product internationally.
In just one week in March, the Stockholm-based company launched its mobile payment product in Spain, Germany and the Netherlands. France came shortly thereafter, then Italy and a promise to launch in the U.K. and the U.S. next.
More than 318 million people live in the United States. This is about 35 times Sweden's population of 9.5 million. "For a Swedish company one thing's for sure you have to expand out of Sweden as quick as possible," said Peter Fredell, CEO of Seamless.
Today, 460,000 Swedish consumers actively use SEQR, which represents about 5% of the population, Fredell said. SEQR's growth in its home country has a lot to do with its partnership with Western Sweden's public transportation system provider, Vasttrafik. Consumers must use SEQR to purchase bus or train tickets from the system, which no longer accepts cash and cards, he said.
"It's very much about finding these consumer pockets; not all consumer acquisition is organic," said Fredell.
SEQR began as a QR code-based mobile payment system but has since added Near Field Communication (NFC) contactless capability. The system allows consumers to pay both offline and online, automatically redeems coupons stored in the wallet and offers a person-to-person payment mechanism.
The company plans to launch SEQR in the U.K. and the U.S. by June. It expects consumer acquisition in the U.S. to be comparable to that of Sweden.
"You don't get millions as soon as you launch, more like hundreds or maybe thousands of people that download per day and start using the app," Fredell said. But one thing is for sure, "you can't even acquire these consumers unless you're in that market."
After June, SEQR will be available in 12 countries, covering more than 600 million consumers, said Fredell. "That puts us way ahead of any global company."
But only in terms of footprint. Apple Pay is a tough competitor for SEQR in terms of mindshare and branding, Fredell said. But he insists Seamless has an advantage over Apple Pay for merchants because it routes its transactions over more cost-effective rails. In Europe, it handles transactions via the SEPA initiative for bank-to-bank transfers, in the U.K. Seamless will use the Faster Payments System and in the U.S. it'll use ACH.
But Apple Pay won't be SEQR's only competition in the U.S. The Merchant Customer Exchange (MCX), a consortium of merchants led by Walmart, is introducing its own mobile wallet system, CurrentC, later this year. But because MCX has waited so long to launch its product, Fredell says the idea is becoming stale.
From the beginning, Seamless has launched alongside major retail partners. The company works with McDonald's in both Sweden and Kuwait. In Finland, the Top-Sports sporting goods chain works with SEQR. In Denmark, Seamless expanded with the acquisition of Ingram Mobile Mobility's prepaid mobile operations in the country.
For the U.S., Seamless has already partnered with InComm to allow consumers to load prepaid cards into its mobile wallet. And it began a relationship with PCMS Group, a retail technology provider with a presence in both the U.S. and the U.K.
The land grab strategy is nothing new. Fredell has been touting the company's aggressive expansion since 2014.
In Europe, Seamless' expansion hasn't been that difficult. It has a money transfer license in Sweden which can be exported throughout the European Union through the Payments Services Directive 2.
Moving into the U.S. will be more of a challenge for Seamless. To ease this transition, Seamless partnered with Newtek Business Services in November last year. Newtek will connect Seamless to the U.S. automated clearing house (ACH) system and allow the company to work under its money transfer licenses, Fredell said.
But Seamless also went through the process of applying for money transmitter licenses in all of the U.S. states that require one. The process of applying state-by-state took Seamless about nine months and roughly a couple million dollars, Fredell said. The company is also registered as a money services business with the Financial Crimes Enforcement Network. It has yet to hear back from state regulators.