The smartphone mobile payments space is already pretty crowded with Square slugging it out in the U.S. against established payments providers PayPal(s ebay), Intuit(s intu) and VeriFone(s pay) to see who can process the most mobile credit card transactions. There doesn't seem like there would be much room in the ring for Punchey, which is taking its payment service out of beta on Tuesday. But the company believes it can deliver a surprisingly powerful left hook.
Punchey is going after small businesses that deal in big transactions by charging lower processing rates on large-dollar amounts. While Square and PayPal charge 2.75 percent and 2.7 percent respectively over the cost of a transaction, Punchey says its fees are only 0.75 percent. But in truth Punchey isn't offering a flat all-inclusive fee like Square and PayPal. It charges additional rates for bank interchange fees plus 15 cents per transaction.
At lower dollar amounts, those charges would be similar, if not higher, than those of the other mobile payments companies. But once you get into $50 or more transactions, the difference becomes noticeable, Punchey said. As an example, the company would charge $1.24 for a $100 transaction, less than half of Square's $2.75. If you're selling coffee by the cup, then Punchey isn't for you. But if you're routinely processing card transactions for high-end scuba equipment or $300 plumber's bill, the company might be worth a look.
Punchey has been in beta since August, working with 500 businesses and processing 50,000 transactions with its iPhone(s aapl) and Android(s goog) card readers. The CEO and founder Nathaniel Stevens previously launched local lead generation company Yodle and funded the company's $1.7 million seed and Series A rounds from his own VC Stevens Ventures.
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