I had a chance last Friday to try another mobile payment system developed here in Boston. This one is called Fig Card, from the dynamic South End developer duo of Max Metral and Hasty Granbery, who previously built Povo, a wiki site that collects information about neighborhoods.
Paying with your mobile phone feels novel and cool, and one of the great promises that the techno-future holds for me is that I will no longer have to tote around my two-inch thick wallet, jammed with cash, receipts, credit cards, Charlie Cards, ZipCar cards, and various loyalty cards. Fig Card is developing an app (initially for iPhone and Android) that will allow you to pay for a purchase at a local merchant, get a digital receipt, and chalk up points in the store's loyalty program (for instance, giving you an eleventh coffee for free after you purchase ten.)
Of course, swiping back and forth on your phone's screen in search of a payment app could simply replace today's acts of jingling around in your pocket for correct change, or hunting through a wallet for the right credit card.
Metral and Granbery have an office on Appleton Street, and Metral also lives nearby, so it's natural that the spot they've chosen for a pilot test of Fig Card is the Appleton Bakery Cafe. They told me they've had lunch there almost every weekday for the last two months.
While Granbery was installing a beta version of the iPhone app on my phone, Metral purchased a couple cookies and a coffee to show me how the app worked. When he opened it, he first punched in a four-digit code for security, and then the app displayed a green button that said "Ready to Pay." After the cashier had rung up the order, Metral clicked the button, and an itemized bill showed up on his phone. (Metral's photo also popped up on the cash register's screen, to give the cashier a way to verify that the phone's owner was paying the bill — a second layer of security.) It offered him the opportunity to add a tip, and then click "pay," which completed the transaction. Fig's servers charged his credit card, sent information to the cash register that the transaction was complete, and filed a digital receipt away in his phone.
When I set up the app on my phone, it asked for a credit card number, a four-digit security code, and a photo that would allow cashiers to identify me as the rightful user of the Fig app. It took less than a minute. I went up to the cashier to buy a pound of coffee beans, and except for fumbling for a second to find the "next" button that would advance the transaction, everything went smoothly. The app offered me a screen where I could sign my name as an extra level of anti-fraud protection (this feature wasn't on Metral's phone, which was running a different version of the app.) My iPhone wasn't connected to the store's WiFi, but just the wonderful AT&T 3G wireless network.
Metral explained that from the merchant's perspective, the only hardware required is a $5 WiFi antenna that plugs into a USB port in the cash register. (You can sort of see the WiFi antenna in the picture at left, between all the cables.) When you open the Fig app, it looks for nearby cash registers using the system. When you click "Ready to pay," the cash register sends you the bill that's currently on its screen. (The phone and register don't talk directly to each other, but rather the phone sends info over the wireless network to Fig's servers, and then Fig's servers in turn communicate with the register.) Metral says the system is every bit as secure as using a credit card, except that "the one security hole is that if you're standing in line with a friend, and you click 'Ready to pay' before they do, you could pay their bill for them." Metral adds that your encrypted credit card information is only sent to Fig's servers once — when you initially set up the app — and that it is never actually sent to the merchants cash register.
The Fig app, unfortunately, isn't yet available for anyone to use. (They're submitting it to Apple's app store this week, so it may show up soon.) Metral and Granbery say they're hoping to raise some money — in the neighborhood of $500,000 — so that they can integrate Fig with all of the major cash register (or "point-of-sale") systems. They say they have a list about about twenty local merchants who've expressed interest in using it. And they've also got a list of features they plan to add: tagging receipts ("Client lunch with Jeff," for instance), allowing users to rate specific items on a restaurant's menu, or enabling one person to pay for a group and then automatically send e-mails to others to request their share. Metral, a co-founder of Firefly Network, one of the earliest online recommendation start-ups, also envisions being able to suggest dishes that are popular this week, or cocktails that you're likely to enjoy based on what you've bought and rated highly in the past.
They say that merchants who allow customers to use the Fig app for payment will pay the same for a credit card transaction as they do today — about 2.5 percent to 3 percent. Their expectations are that by building up enough transaction volume, they can get a discount from payment processors, and earn money on the spread. Eventually, Metral says the company could charge additional fees for helping merchants manage loyalty programs.
Later this month, Metral and Granbery are bringing on Dave McLaughlin to assist Fig Card with business development. McLaughlin was previously the founding executive director of Boston World Partnerships, a non-profit created by Boston mayor Thomas Menino to encourage the growth of entrepreneurial businesses in the city. Now, McLaughlin will try his hand working for one.
Seems to me that Fig Card is the kind of business that needs to get a bunch of merchants using it (and loving it), and garner some favorable buzz — and then get acquired by a company that needs a mobile payment solution and already has relationships with millions of retailers and restaurants. In other words, speed is of the essence...
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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December 9: Web Innovators Group
Demos of new mobile apps and web ventures at the Royal Sonesta Hotel in Cambridge. Free admission; cash bar.
December 10: Fintech Demo Day
Short demos from startups in the financial technology realm.
December 11: Unpitch
Entrepreneurs and investors sit down for lunch, advice, and feedback. Entrepreneurs must apply to participate.