TORONTO—The flags hang from the ceiling in the developers room at the Digital Media Zone (DMZ) at Ryerson University like pennants, only instead of sports teams they bear the names of nascent technology companies—The Shop Society, Sensibill, Shop Gage, the Ping Pong Story and OnTab—that  hope to someday be as successful and famous as Square or LevelUp.

"What's unique about this is all of the other creative technology developers that you meet here, you pick up a lot of ideas and you can't help but be inspired," says Behzad Malek, the founder of OnTab, a new cloud-based payments startup that works out of the DMZ.

On this day, Malek is describing OnTab's payments technology to a group of visitors who sit on beanbags and benches in a repurposed loft off of Toronto's Dundas Square, sort of a mix of Tribeca and Times Square. Malek demonstrates his technology on a tablet while other developers pound away at workstations building their own companies in the open space.

"We want to make it easier for companies to accept payments, whether it's NFC, barcode, etc." Malek says.

OnTab is hoping to gain traction in the fiercely competitive mobile point of sale market—dominated by companies like Square, PayPal, Intuit, Roam and dozens of others. OnTab, which plans to formally launch shortly, enables consumers to use a variety of methods, such as digital wallets or even virtual currencies, to make mobile payments.

"OnTab adds a mobile option to an existing payments terminal," Malek says.  Consumers download OnTab to their mobile device, and link payment accounts. At the point of sale, the consumer shows his or her tab ID to a merchant. The merchant enters the tab ID into the payment terminal, and OnTab processes and confirms the payment.   

Ryerson University's DMZ supplies a low-rent (about $400 per month) work space, networking, collaboration, education and opportunities for burgeoning technology companies to meet potential investors. The DMZ was founded three years ago and occupies about 40,000 square feet.

Developers, working in teams of one to about 17 people, include students and entrepreneurs. They are all required to have developed a concept for a technology startup with social or business value. While most of the companies focus on transportation, entertainment and gaming, there has been a recent increase in the number of financial services and payments startups, says Valerie Fox, DMZ's executive director.

Sensibill, a DMZ tenant that formed in May, has developed a mobile app that allows consumers to access and store payment receipts. The company's technology is designed to embed with mobile wallets to provide proof or purchase or records of a payment for consumers or merchants. Returns can also be recorded.

"If you are a consumer, you don't have to store receipts or worry about losing them. We store them in a secure cloud, where they can be accessed for a merchandise return," says Cory Gross, one of the founders of Sensibill. The company is pitching its technology to mobile wallet developers and mobile point of sale vendors.

"We want people to win here no matter what happens, either their company works or they land a job through their work here," Fox says. Thirty-five companies have raised enough capital from investors to leave the DMZ and move into their own offices, and 889 people who have worked in the DMZ have found employment at their own or other technology companies, she says.

"We bring in potential investors and clients for the startups to pitch ideas, and there is a learning process. We want people who are coachable and who are willing to collaborate," Fox says.

Ryerson has established Ryerson Futures, which invests up to $50,000 in certain startups, and plans to start a Series A funding arm, she says. Other universities such as Stanford have also launched funding arms for technology startups.

DMZ is part of a number of venues for payments and financial technology developers. Yodlee has operated an incubator for about a year, and payment companies such as Elavon and MasterCard operate their own development labs.

MasterCard is also hosting a contest for developers, and PayPal and Microsoft have hosted similar events. 

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