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Summary:

Swipely, a startup launched by former Tellme co-founder Angus Davis, has been through a couple of business models but it is now finding a sweet spot with its combination of card processing, data analytics and marketing and loyalty.

Credit Cards

Swipely began life as a way for consumers to share their credit card purchases, similar to Blippy and Facebook’s controversial Beacon feature. Then, Swipely switched it up and worked to help deliver deals and loyalty points to consumers. Now, the Providence, RI company started by former TellMe founder Angus Davis is finding its groove as a merchant-facing service that processes card payments and delivers data analytics and marketing tools.

The company for the last six months has competed against big payment processors and merchants acquirers like Bank of America, First Data and Chase Paymentech. But instead of trying to compete on lower fees, it supplies data analytics, marketing and loyalty services that are built off credit card swipe transactions. This gives merchants valuable tools to break down sales trends, better identify their best customers and reach out to loyal or lapsed customers through email marketing and retention tools.

In the six months since Swipely moved to this model of combining payments, analytics and marketing, it has processed $250 million in payment volume. That’s a drop in the bucket compared to big competitors. But the solid growth shows that Swipely may be on to a business model that works. And now the company is expanding its offering for its merchants to help them get even more insights and forge a better relationship with their customers.

Swipely

With Swipely Winter ’13 update, Swipely is now able to provide spending data on individual users, so a merchant can see what its top users are doing in real-time and cater to their needs. Previously, Swipely offered trend and aggregate spending data, but now it can provide a CRM tool complete with customer profiles for merchants.

Swipely is also offering next-day settlement through a partnership with American Express. Merchants can use Swipely’s newly tablet-optimized dashboard to receive more detailed sales data, such as hourly sales trends, multiple location information and daily sales reports that include social media interactions. And Swipely is opening up its service to 20 more point of sale systems.

Davis said Swipely is now where it needs to be, competing in the massive $70 billion payments market. He said the landscape for pure loyalty startups is bleak, something Google also seemed to acknowledge with the recent closure of Punchd. By bundling in payments, Swipely can displace an existing cost for merchants and replace it with free marketing and analytics tools for businesses. He said most businesses are not getting any real data insights from their payment processor.

“We give merchants the ability to understand their sales data. You can now understand your customers in ways you couldn’t before,” said Swipely. “We’re bringing analytics to Main Street.”

SwipelyWhat makes Swipely attractive is that the company matches whatever fees that a previous payment processor offered so there’s no added cost to try it out. And it works with most existing hardware so it doesn’t require any new point of sale upgrades.

Davis said the company only has a few hundred customers, who are doing an average of $1 million in annual card transactions. But he expects his customer base to skyrocket in 2013 as merchants learn about the service and he’s quadrupling his sales team to handle the demand.

I think Swipely made a smart move in finding the right fit for its card swiping technology. Many merchants are still struggling to better understand their customers and could use the tools Swipely offers. Some mobile payment services like Square offer simple analytics, but they don’t always appeal to bigger merchants who have sunk a lot of money into existing hardware.

Swipely, which has raised $8.5 million to date, also works with some mobile point-of-sale applications like Lavu POS. The product shows that the credit card is still valuable to merchants and consumers even with the rise of mobile payments. Despite a bunch of iterations, Swipely may have finally found an approach that sticks.

  1. Sounds like United MileagePlus Dining, only instead of miles for airline trips, people get discounts for items they’ve already decided to buy, and are at the cash register to purchase.

    Anyways, I don’t know. Asking for information about my customers from a credit card processor is like going to my business banker and asking him the same thing. He’ll tell me how much money I have in the accounts, maybe the checks that cleared instead.

    I guess an additional unintended discount at a store I go to frequently is ok. I’ll never turn it down.

    Also, what happens if I don’t like my MasterCard or have several credit card accounts? Seems pretty scary.

    The issue is that Swipely only tells you how much they’ve spent, and not how much profit you’ve made or if that customer is limiting themselves to buying loss-leaders in your store.

    I know people who go to BestBuy every week to get the new video releases. They’ve spent tens of thousands of dollars on videos, are BestBuy Rewards Members, and BestBuy always looses money when they walk in the door. They buy their electronics from Amazon.

    They used to buy actual products at BestBuy, and joke that they were keeping BestBuy in Business. Well, then they found Amazon, and now they have money left over to buy two copies of the new-release videos.

    I guess the point is this- the customer already committed to buy it. They know what your charging their card, and if the credit card processor is setup to apply a discount, it better make sure the transaction is still turning a profit. Otherwise, saying “Hey Wait, Visa says you get a discount” is probably how this system works, and the customer then appreciates Visa.

    I guess the point is that 200 sales of a $10 item with a 50¢ profit is a $100 profit over the customer lifetime.

    One sale of a $500 item with a $300 profit is a more valuable customer, but you can’t figure that out based on gross receipts, and if you forget to get the customer’s email address you can’t get them back into the store.

    Also, what exactly do I tell a customer when he’s standing there to get a picture of him similar to the mockup? I think saying “Swipely, my credit card company, wants your picture” is a little creepy. I really doubt they’d return.

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  2. Most of the information that swipely is giving the retailer should be coming from the POS. Not sure what POS these retailers are using but the analytics coming from modern POS software will be much more helpful to the retailer and will give the retailer the information that the above comment mentions like profit from customer. Any retailer looking at swipely should be looking at upgrading their POS to something like NCR Silver.

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  3. Amanda MacArthur Wednesday, December 19, 2012

    Awesome service for small businesses who otherwise can’t afford big data. Seems like a no-brainer when you could use a payment processor who gives you nothing, or a payment processor that gives you data.

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  4. That image is false. It’s clear he got a $4 cash back, and yet the “cash back” portion of the loyalty progress on the right is not checked.

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