Card.io launched last June, introducing its “visual swipe” technology that allowed developers to accept credit card payments by taking a picture of a card. Now, the startup is looking to step out from the background with a new consumer payment app for iOS and Android that allows people to receive payments using Card.io’s scanning technology. The company is also updating its software development kit to allow developers to not just scan cards, but process the entire payment using Card.io.
The updates show how Card.io is maturing from a developer tool into a much fuller offering that puts it up against the likes of Square and PayPal. Since launching on iOS in June and Android in September, Card.io has gotten 160 developers to use its technology.
The Card.io Payments app is pretty straightforward. Users enter in how much they want to charge someone, and then they scan a card using their camera. The app uses 128-bit SSL encryption and doesn’t save the credit card data or image. Users can decide to receive processed payments through their own checking or savings account or through PayPal. Or if they don’t set up a pay out method, Card.io will hold on to the funds until they do.
Card.io takes 3.5 percent per transaction, plus 30 cents, and there are no set-up fees. That puts it higher than Square, which charges a flat 2.75 percent for card swipes using its dongle, and 3.5 percent plus 15 cents per transaction for manually entered credit card data. PayPal takes 2.9 percent of a transfer via credit or debit card, plus 30 cents. But Card.io is apparently betting that the ease of use involved in simply snapping a photo with the camera found on all phones will justify the fee difference.
“Most consumers don’t have separate hardware to swipe a credit card, so we built this app for them” said Mike Mettler, co-founder of Card.io. “Whether you’re splitting the bill at lunch, paying a friend for gas on a ski trip, or buying a couch on craigslist, Card.io payments is the fastest, easiest, and most secure way to accept payment.”
Mettler said with Card.io’s original scanning SDK, many developers asked the company to take out the friction and include payment processing. Before, developers just plugged in Card.io for scanning but still had to line up the processing component. Now, Card.io provides a full payment stack for developers, he said. Developers will pay 3.5 percent plus 30 cents for processing payments.
Card.io was started by former AdMob employees Mettler and Josh Bleecher Snyder with $1 million in seed funding from investors Michael Dearing of Harrison Metal, Jeff Clavier and Charles Hudson of SoftTech VC, Manu Kumar of K9 Ventures, Alok Bhanot, a former VP of Risk Technology at PayPal, and Omar Hamoui, former CEO and founder of AdMob.
There are still some questions about how comfortable consumers will be with transferring money via card scans. But as more people get used to the idea of conducting transactions and payments through their phones, there could be interest in a hardware-free solution that makes taking payments easier.