That was quick. Around a month ago, payments processor du jour Stripe got valued at half a billion dollars. Rumours emerged just days later that Berlin clone factory Rocket Internet was set to pump out a copy – now that version has arrived in the form of Paymill.
It’s the third of the Samwer brothers’ payment service clones – BillPay already copies BillMeLater and PayLeven apes Square. Like those others, Paymill hews closely to its source material – for instance, Stripe offers developers a simple RESTful API for quickly integrating payment functionality without the hassle of handling card details, and so does Paymill.
Several German online stores have already implemented Paymill, namely DieJeans.de, Tailory.com, Flakegolf.de and mywineportal.com.
Stripe takes a 2.9 percent cut, plus 30 U.S. cents, per transaction. Paymill takes 2.95 percent and 28 euro cents, or 35 U.S. cents. So the Rocket option is a bit pricier – but, then again, it’s available outside the U.S., which Stripe is not. Right now, Paymill is a Germany-only affair, but the likelihood of it staying that way for long is roughly equivalent to that of the Beatles reforming – the homepage is in German, but the documentation is auf Englisch.
I doubt it will be long before we see Paymill raise serious funding, and I’ll stick my neck out and say the cash will come from regular Samwer investors Kinnevik and/or Holtzbrinck Ventures.
Stripe founders Patrick and John Collison had better get a move on with their international expansion.
In their favour, it must be noted that Rocket is yet to create a palpable success in the payments field – their many triumphs have mostly been in straight-ahead e-commerce. On the other hand, when they do figure out how to execute on an idea, they do it fast and comprehensively. Nobody on this planet internationalizes as aggressively as Rocket does.
Speaking of which, Rocket had a second major announcement on Tuesday: the signing of a deal between it and the mobile operator Millicom, which offers services in Africa and Latin America.
As with all clever carriers, Millicom is big into the diversification game right now, and its deal with the Samwers certainly gives it that. The two outfits are going to “jointly develop franchises in the online sector in Latin America and Africa”. Millicom will have the option over the next four years to gradually buy up controlling stakes in Rocket’s Latin America Internet Holding and Africa Internet Holding subsidiaries.
The two holding companies control eight operating businesses now, and are “required to launch a number of new businesses in Latin America and Africa over the next three years”, according to the statement. Millicom gets 20 percent of both companies when the deal closes, and is expected to up that to 50 percent within two years (the first instalment of €85m will head Rocket’s way in the fourth quarter of this year).
As usual, this is a story of the German company pushing into markets that are largely ignored by the Americans. As Millicom chief Mikael Grahne put it:
“Rocket Internet has a proven track record of rapidly developing successful operations in the online and e-commerce sectors. Millicom has a strong know-how of operating in the fast-moving consumer goods industry in Latin America and Africa… We believe that online services in emerging markets have the potential to go beyond the convenience they successfully brought in developed markets.”
And yes, the two holding companies are working on Rocket’s payments services. Payleven, the Square clone, is already listed as being operational in Brazil.
Will Paymill be close behind? Maybe, maybe not.
Stripe and Paymill make the most sense for new sites that aren’t already plugged into a more complex payments system, and the emerging markets are, by nature, fertile ground for this. Then again, these services will thrive best in a credit-card culture. What makes sense in the U.S. market may not actually be primed for internationalization just yet.
As I’ve said before and will doubtless say again, Rocket is yet to prove itself when it comes to anything other than straight e-commerce. But that doesn’t mean it’s not trying. If there really is an international market for this stuff, the Samwers will probably be the first to nail it.