An Albuquerque company that created what it says is the world’s first two-click system for buying things through email is now dancing with one of the biggest stars in the payment processing industry.
Heartland Payment Systems, a $2.1 billion publicly traded company that manages credit-card payments for some 300,000 merchants nationwide, signed a partnership agreement this month to promote the new email payment platform to all its clients.
The system, created by Albuquerque-based @Pay (pronounced “at-pay”), allows merchants to offer products and services through code-encrypted emails that permit recipients to buy things with just two clicks on their smartphone, or on any other online mobile device or computer.
“Heartland is a Fortune 1000 company that processes about 11 million transactions per day, or about $80 billion in transactions per year,” said @Pay President and CEO John Killoran. “It’s one of the five biggest payment processors in the country, and they’re now going to market us to all their merchants.”
The company also has signed up two major email marketing companies in the past month to promote its product. They are Bronto Software, which sends about 1.2 billion emails per month to consumers for merchants, and dotmailer, which manages about 100 million monthly emails.
Newspaper as Web store
In addition, @Pay this month is releasing its newest product – encrypted bar codes, or QR (quick response) codes, for print advertisements that will allow consumers to pull up the two-click email payment by just scanning the bar with their smartphone. Merchants can use it to induce immediate online shopping as people browse the Sunday paper or a magazine, or even when glancing at a wall poster, Killoran said.
“We’re connecting the e-commerce digital world to the physical world with our QR code technology,” he said. “This will let people instantly buy things from the newspaper by just scanning the ad with their smartphone. It could turn the Sunday paper into an Amazon-like Web store.”
The two-click payment system, which @Pay launched last year, is based on imbedding a coded button into emails that allows people receiving a message to simply click on it to order a product or service, then click again to confirm. A receipt for the purchase then automatically appears in the user’s email account.
Consumers only have to sign up for the email payment system once, when they enter their personal information and credit card. That information is then securely stored and managed by the same payment industry systems that today handle all online credit-card purchases.
Once a consumer has signed up, the two-click email purchasing becomes available to them through any merchant that uses it to sell things.
The system could provide a huge boon to merchants seeking to sell online because it eliminates the cumbersome checkout process for shoppers who generally have to enter personal information, passwords and credit cards every time they buy something. That six- or seven-step system often discourages people from purchasing items on smartphones or tablets because it can be difficult or frustrating to navigate with mobile devices.
In contrast, @Pay’s payment system allows immediate consumer gratification by making email purchasing simple and fast.
“It’s unique in the sense that it removes a lot of the frustration at checkout,” said Joe Wysocki, executive director for e-commerce at Heartland Payment Systems. “The customer gets an email from a merchant, let’s say with a promotional offer, and if they want to make an impulse purchase, it’s just two clicks and their done and the product is on the way.”
That could significantly influence consumers, given that an estimated 4.7 billion email offers are delivered in the U.S. every day, and 70 percent of those are opened on mobile devices, according to data from industry consultants Movable Ink and Knotice.
Moreover, only about 2 percent of those emails are ever revisited after being opened once. That means merchants generally have just one shot to convince a consumer to make an “impulse” purchase, and the two-click system can help facilitate that.
Good for small biz
It could particularly help small-sized businesses who want to increase online sales but lack the marketing resources of big retailers, Wysocki said.
“I think it will help differentiate Heartland’s e-commerce offerings,” he said. “It can improve merchants’ ability to attract new customers, retain existing ones and increase repeat purchasing.”
Michael Hickie, email marketing consultant for dotmailer in North America and Australia, said the system is built for merchants to easily incorporate it into their email marketing campaigns.
“It’s a coded button that fits right into our own drag-and-drop system for email marketing,” Hickie said. “Any merchant who wants to offer two-click potential just drags it and drops it in. You set it up once and it continues to be a part of any email.”
The @Pay system has been integrated into 60 payment gateways worldwide, Killoran said. Those are the networks that connect merchants with payment processors like Heartland.
In addition, nearly 30 independent sales organizations that resell credid-card and other payment systems to merchants now are actively marketing the @Pay system as well.
“We’ve now signed up 28 companies that are reselling our service,” Killoran said. “We have the equivalent of some 1,300 salespeople out there selling @Pay in addition to credit-card swipers.”
Major revenue boost
As @Pay’s partners sign up merchants nationally and internationally, the company will enjoy a recurring revenue stream, since merchants will pay 25 cents for every sales transaction, plus a small monthly fee for service.
In the meantime, @Pay is preparing to ramp up its support logistics in Albuquerque. The company has raised $6 million in private equity to date to fully develop and deploy its system. It’s now raising another $1 million for an aggressive marketing push.
The company currently employs about 20 people at a 3,000-square-foot office suite in the Sycamore Plaza Building at 5600 Wyoming NE. It will expand to 6,000 square feet before the end of August.