ePayments Week: Three startups bet on commerce

Three commerce startups from TechCrunch Disrupt. Also, daily deals and the feature phone endure.

Here’s what popped onto my radar in the commerce space this week.

Commerce startups at TechCrunch Disrupt

Openbucks, Rewardli, LemonThree startups in the commerce space caught my eye at TechCrunch Disrupt:

Openbucks lets users pay for credits in online games with gift cards purchased from some major retailers (Subway, Circle K, Sports Authority, etc.). CEO and cofounder Marc Rochman told me that the service was designed primarily for the "unbanked" — teenagers or others who don’t have credit cards or bank accounts. But feedback from customers during the service’s beta period this year showed him it also has legs with people who want a little privacy in their gaming. Rochman said they intend to branch out to other digital goods, including music and other media, as long as it’s appropriate for the brands. That rules out one fairly large online industry where users would want to pay for online content while remaining anonymous — and Rochman confirmed, they intend to stay far away from adult content in order to protect their own brand.

Rewardli creates buying groups for small businesses to get volume discounts from retailers, tech vendors, and travel companies — the places that small businesses already buy from. George Favvas, cofounder and CEO, said this isn’t another daily deal program. First, it’s aimed at helping businesses save on the things they’re already buying, like plane tickets, PCs, and paper. Second, it’s not focused on limited-time offers or daily deals. Once you’ve signed as part of a group, you can buy from any of the 60 retail partners, including Staples, Lenovo, Virgin Atlantic, Expedia and GoDaddy. The size of your group and its activity with that retailer determines the size of your discount. You don’t see your discount immediately, but you do get a bulk refund deposited in your PayPal account after a few weeks. It’s a good idea and easy to join, but it will be interesting to see if businesses save enough to make it worth the wait.

Lemon is a service for organizing your receipts online. Retailers are beginning to follow the Apple Store’s lead in offering to email receipts, and you can have yours sent to an @lemon.com address to keep them all organized. Co-founder Meyer Malik said they are developing smartphone apps (Android is ready; iOS, Rim and Windows are on the way) to digitize snapshots of your physical receipts and add them to the records. While I can’t think of anyone (with the possible exception of myself) who would spend time photographing grocery and gas receipts, I think there’s potential here in managing receipts for returns and warranties. Maybe that’s where Lemon got its name: one of its best uses could be to help recover the value of products that don’t outlast their warranties.

Daily deals still rising

A couple of weeks ago I wondered whether daily-deal fatigue was setting in, given Facebook’s abandoning of its program and an anecdotal sense that the offers were too niche and too expensive to fit into consumers’ monthly budgets. But perhaps the wave hasn’t crested yet: research and consulting firm BIA/Kelsey projects strong growth for daily deals. Back in March, the firm had predicted that deals would grow from $873 million in 2010 to $3.9 billion in 2015. This week, they goosed up the 2015 figure to $4.2 billion, based on a few new developments: more people signing up than expected, more active users, more targeted deals, and (to my surprise) a rise in the average price per transaction. Even so, BIA/Kelsey’s chief economist Mark Fratirik sees “a ceiling on how many deals consumers will buy.” At some point, presumably, people will decide it’s cheaper to buy their own kayaks.

Feature phones

A few weeks ago, telecom research firm Ovum reminded us that there is still life in the feature-phone (or, non-smartphone) app market, predicting that the market would double to $1 billion by 2016. The report noted that the combination of large numbers of feature-phone owners and an uncrowded playing field offer lucrative potential for developers. Widgets from Nokia and Opera, along with the advent of HTML5, could also make feature phones more capable competitors to smartphones.

A report this week from comScore MobiLens, paired with analysis by Asymco, however, suggests the feature-phone market is quickly yielding ground to smartphones. ComScore’s report focused on the growth in smartphone usage in Europe’s five largest markets, particularly among Android users. Asymco looked at the flip side of that gain and found that Android hadn’t taken its share from other smartphone operating systems as much as it had taken it from feature phones. Still, Asymco notes, there are billions of people on the planet without phones, and the first one they’re likely to afford will probably be a feature phone.

Got news?

News tips and suggestions are always welcome, so please send them along.

If you’re interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O’Reilly and PayPal.


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