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American Express buys stake in payment device maker Ezetap

The Economic Times:  March, 2014

Bangalore: American Express Co., the biggest credit-card issuer by purchases has bought a minority stake in Bangalore-based payment device maker Ezetap Mobile Solutions.

A month ago, Ezetap received venture funding of Rs 49.8 crore from a consortium of investors led by venture fund Helion Venture Partners.

"This investment is a validation about what we are doing and the potential of the market," said Abhijit Bose cofounder of Ezetap which converts any mobile device into point of sale through its software and hardware.

Bose, a former executive at mobile commerce platform ngpay, cofounded Ezetap in 2011 along with Bhaktha Keshavachar, a former engineer at Intel.

The company incubated at Bangalore-based AngelPrime has received funding from some of the world's best -known investors, including PayPal's Peter Thiel and enterprise social network company Yammer cofounder David Sacks as well as billionaire Nicolas Berggruen's private equity fund Berggruen Holdings.

Ezetap which has deployed 12,000 devices across South East Asia and Africa, will use the funds to increase growth in these markets. It aims to take the total number of devices over 100,000 by next year.

American Express believes mobile point of sales solutions will play an important role in helping to further enable commerce. "Especially in small merchant segments that have historically relied on cash," said Sanjay Rishi, President, American Express, South Asia. "Ezetap is one of the few mobile point of sale companies in the world that owns the entire technology stack from its hardware and application to its open platform, integration framework, and processing," he said.

Both Bose and investors declined to reveal the amount invested by the credit card issuer.

Although India has more than 300 million unique credit and debit cardholders, the acceptance infrastructure in India has lagged with just over 800,000 such acceptance points.

With smart-phones and tablets becoming ubiquitous, the Ezetap device, priced at around Rs 3,000 consists of a light-weight card reader that can be plugged into any smart device or feature phone used by a retailer. The technology allows anyone to accept cards--from merchants and cabdrivers to grocers and pizza delivery boys.

Ezetap sells the solution to customers such as online fashion retailer Myntra, ticket company Bookmyshow, taxi service provider Olacabs and Reliance General Insurance.

"This investment will help in collaboration, innovation and bring new solutions and identify opportunities," said Sanjay Swamy, managing partner of AngelPrime. "It will also help us to go to other parts of the world."

The closest parallel to Ezetap's point-of-sale device is the one offered by US-based Square, co-founded by Twitter co-founder Jack Dorsey.

In India, Ezetap competes with Mswipe Technologies, which is backed by venture capital firm Matrix Partners, Axis Bank and DSG Consumer Partners.

In February American Express Ventures, the venture capital arm of the New York-based credit-card issuer made a strategic investment in Indian startup Capillary Technologies, which builds technology that helps retailers understand customer purchase behavior.