When we last caught up with GoPago, the San Francisco startup was trying to sell consumers and businesses on the benefits of its line-skipping app that let people order ahead. But that opportunity apparently wasn’t big enough. Now the company is the latest to line up against Square and is introducing its own mobile payments system called GoPago Live.
That pits Chase-backed GoPago against not just Square but a big line-up of deep-pocketed rivals such as PayPal (s ebay), VeriFone (s pay), Intuit (s intu), NCR (s ncr) and new startups like PayAnywhere, SalesVu, LevelUp and others. But GoPago believes it’s got an ace up its sleeve: it’s offering an entirely free package for retailers with no monthly charges and free hardware, including an Android tablet(s GOOG) with Verizon 4G service (s vz), a tablet stand, cash drawer, receipt printer and a credit card reader. It’s also throwing in free 24/7 support.
This is in contrast to companies like Square that offer tablet apps but require you to buy your own tablet. And it competes directly with offerings from Intuit and NCR, who make cash registers and receipt printers and sell them as a bundled package for businesses. NCR, for example, rolled out NCR Silver last month, which sells for $619, and includes an iPad(s AAPL) stand, wireless receipt printer and cash drawer. Users pay $79 a month to connect a mobile device and up to $29 a month each for additional devices.
So how can GoPago make this work for the long haul? Well, it’s working with Verizon to offer the tablets for free and it’s hoping it can attract enough businesses to justify the costs. A lot of merchants are interested in mobile payment options and tablet-based payment systems, but it can be hard making the initial investment. GoPago is hoping to make it easy for merchants to make the step up by offering a free, complete package out of the box.
“We think GoPago Live will turn the payment industry on its head. This is so much more than POS (point of sale). It’s a total solution for brick-and-mortar business owners. We’re redefining and resetting the bar for modernizing business payments and loyalty programs,” said Leo Rocco, CEO and founder of GoPago in a statement.
GoPago will charge businesses 2.85 percent on all card transactions. That’s higher than other competitors, which is one way it will try to make its money back. Ordering ahead through the GoPago mobile app will include a 5 percent transaction fee. The system also includes a loyalty program, CRM software and a way for businesses to create their own mobile storefronts.
It’s an interesting move though it’s going to to take a lot of volume to make this pay off. I think GoPago’s free offer may resonate with some businesses but it will have to compete on day-to-day services and value-added features like its line-skipping app to really stay in the game. Having JP Morgan Chase (s ccf) as an investor might give it some breathing room because it allows Chase to get some good feedback on mobile payments. But with so many options now available to businesses, it’s going to be hard just fighting through all the noise.
GoPago, which is getting underway in San Francisco and Dallas first, and should be available nationwide later this month, represents just another sign of how big this opportunity is in re-imagining the cash register for small businesses. Square is off to an early lead but the pack of rivals is nipping at its heels, coming up with different ways to compete. Some like Intuit and NCR are focusing on their hardware and software packages while LevelUp is reducing the cost of transactions to nothing but charging for loyalty campaigns. For Square, the battlefield is getting more cluttered with competitors trying to cut off its growth options. But the flood of entrants also means more confusion for merchants, which can help a startup that has built a strong brand early in this space.