High credit card fees avoided with new mobile payment app

PayWith offers merchants lowest transaction fee available in Canada

VANCOUVER, April 1, 2014 /CNW/ - As Canadian merchants and the credit card networks fight over transaction fees, an innovative mobile payments app is now enabling retailers and restaurants to avoid paying high credit card fees.  Created by Vancouver-based PayWith, a new secure smartphone-based payment method called the "mCard" offers merchants the lowest transaction fees available in Canada.

"With PayWith's mobile solution, merchants will be charged the lowest transaction fee of any credit card," says David Strebinger, co-founder and CEO of PayWith. "The mCard effectively eliminates the high credit card fees merchants have complained about paying when transacting premium or even traditional cards."

Merchants and retail associations have long been lobbying for the ability to pass on to the consumer the higher cost incurred transacting premium cards.  Last summer, the federal Competition Tribunal reviewed the issue of high credit card fees.  Last week a multibillion-dollar class-action lawsuit by a Vancouver storeowner challenging the fees paid by merchants on credit card transactions was approved to proceed by the B.C. Supreme Court, and parallel proceedings are underway in across Canada.

Typically, premium credit cards offer reward miles, points and other benefits for consumers, but require higher transaction fees to be paid by merchants to the credit card firms. Merchants who accept credit cards pay fees ranging form 1.5 to 3.0 per cent of the value of the purchase.

"People love their points, and credit card loyalty rewards programs are at the heart of the ongoing dispute between Canadian merchants and credit card networks over transaction fees," says Strebinger. "The introduction of PayWith's mCard is welcome news, particularly for small business owners who can benefit from this mobile payment technology and save money. It's also a positive development for consumers who can continue to choose how to use their credit cards and enjoy the card benefits they've come to value."

Brendan Ng, a small business owner who runs the Fresh Bowl restaurants in Vancouver, is one of the first adopters of the mCard. He knows the restaurant industry is particularly sensitive to rising credit card fees and has successfully implemented the mCard to save on transaction fees and help grow his business.

"There are real incentives for using the mCard on both sides of the cash register. While I save on transaction fees, my customers enjoy the benefits of their regular and premium credit cards, plus the branded incentives I send them on their smartphones," says Ng.

In addition to offering merchants the lowest transaction fee available, the mCard technology platform allows any merchant to implement rewards programs similar to the successful Starbucks App to help them grow their businesses and increase their revenue.

When consumers load their PayWith app or "mobile wallet" using any major or premium credit card, PayWith not the merchant is paying the transaction fee associated with that card.  When a consumer uses their mCard at participating merchants, PayWith guarantees a transaction fee that is less than what the individual merchant currently pays using traditional plastic cards.

"Unlike other mobile payment companies, our business model is not based on revenue from the payment transaction," says Strebinger.  "PayWith's focus is to deliver a better transaction and rewards experience for consumers, and a superior price and service for small and medium-sized businesses."

How it works:

Once a consumer has downloaded the PayWith app and linked their credit card to it, they can then use an mCard to pay merchants at participating locations.  mCards are secure, dynamically generated virtual card numbers that change for each mobile transaction.

Merchants simply authorize the mCard payment on their existing terminals, without the need for additional software or hardware, and pay the lowest transaction rate of any card.   Consumers still get their premium card benefits and may also receive instant rebates, discounts and other incentives that are managed by the merchant through the PayWith platform.

Following a successful 12-month pilot conducted in Vancouver and Phoenix, Arizona, the mCard is first being made available to all types of merchants in the Greater Vancouver Area and will be rolled out across Canada over the next 18 months to become a widely available payment choice.

About PayWith Worldwide

PayWith Worldwide (www.PayWith.com) provides merchants an ultra simple solution for transacting mobile payments, running rewards and loyalty campaigns and selling branded gift cards without any new hardware or software.  PayWith is focused on merchant profitability and quantifiable exposure. At the core of the PayWith platform for merchants is a "Pay Per Result" marketing system that tracks the ROI of every marketing campaign. Consumers "Pay With" branded mCards using their mobile phones and merchants receive relevant customer data and analytics that helps drive more customers spending more money more often.

SOURCE: PayWith Worldwide Inc.

For further information or interviews contact:

Robert MacLean 
Public Affairs, PayWith
403-589-3631 
[email protected]

Rob Whittle,
CMO, PayWith Worldwide
604-816-9723
[email protected]