Zipmark, a New York start-up I wrote about when it graduated from the FinTech Innovation Lab, has raised $2 million to build out an alternative payment system that enables mobile payments that ride on checking networks. The money was raised from Village Ventures and Contour Venture Partners with participation from NYC Seed, High Peaks Venture Capital and the New York City Investment Fund.
Zipmark leverages the existing check-processing infrastructure to create a payment system that is fast, simple and cheap for users. The startup charges 1 percent for each transaction and caps fees at $5 regardless of the total amount. It can receive payments from any bank, thrift or credit union checking account and can send payments to a the recipient’s bank account by the next day. For merchants who use Zipmark, it can be a low-cost alternative to credit and debit cards and can also reduce the risk of bounced checks.
Zipmark ran a pilot earlier this year and is planning a bigger rollout next year including an iPhone app launch in the first quarter. Users of the mobile app will be able to make payments for things like rent, fees or subscriptions by scanning QR codes from printed invoices.
“Our goal is to modernize the checkbook—to reduce the amount of time and money it takes to make a check payment, eliminate the possibility for bounced checks, and take all risk out of the equation for payer and payee alike,” said CEO and co-founder Jay Bhattacharya.