Mobile payment app targets mid-sized retailers

Walk into your local grocery and ping! — coupons are delivered to your smartphone. Then you can pay for those groceries with the same phone, without a credit card or even a checking account.

A startup company in Hollywood is working to make that scenario more common.

Altpay has developed a mobile-payment system for consumers of small- to mid-sized pharmacies, grocery stores and independent gas stations with revenues from $1 million to $1 billion. The company is conducting a pilot program with the Navarro discount pharmacy chain and the independent Sunoco station at 6201 Miramar Parkway in Miramar.

Altpay says its system will provide customers with a safe, easy way to make purchases with their smartphones while giving retailers the opportunity to cater to loyal customers and their shopping habits.

“We’re offering a complete solution to stores,” said Victor Cook, founder and managing partner of Altpay, which plans to be operating in more local stores by June and has raised $1 million to fund the business. Altpay is ultimately seeking about $10 million from investors.

Cook said Apple Pay is paving the way for new companies like his. Apple Pay, launched earlier this year, allows iPhone 6 and 6 Plus users to pay for purchases at thousands of retailers — mostly larger ones than Altpay is targeting.

“Apple Pay is teaching people it’s great to pay with a phone,” Cook said.

Altpay is available for iPhones, Androids, Blackberrys and Windows mobile phones. Customers who download the app can load funds directly into their account or transfer money from their bank to their account. As they check out, all relevant coupons or special prices are applied to the customer’s purchase at checkout.

The consumer pays nothing to use the app. A store pays 1 percent per transaction, which Cook says is well below what retailers pay to accept credit card transactions.

Paul Walczak, development manager for New Vista Living, a senior living center in Wellington, said Cook has been a strategy consultant for his company. “I think he has a very user-friendly solution,” Walczak said of Altpay. “I think the technology is ahead of its time.”

Altpay has a patent-pending technology that uses a one-time use transaction code with no personal identification in it, according to Cook. The customer enters the code like a pin on the retailer’s keypad or the cashier can scan the QR code.

Apple Pay also stores no credit information on phones or the company’s servers. But other mobile payment often include encrypted personal information, which is a concern if the system is hacked. Apple Major retailers including Target, Neiman Marcus and Home Depot experienced security breaches last year.

Walczak said Cook has the experience with creating successful businesses to take Altpay forward.

Cook has founded two West Palm Beach-based companies, ScriptsRX, one of the early developers of software for medical records that’s still going, and Telegraph New Technologies, which was acquired by Andrx Pharmaceuticals in 1999 for $4.2 million. He also was chief technology officer, developing a telemedicine platform, for Sunrise-based MDLive.

Rob Strandberg, president of Enterprise Development Corp., which operates startup incubators throughout South Florida, said mobile technologies are helping to ensure more secure payments, as well as giving retailers information about their customers’ shopping behaviors.

“I’m a huge fan of mobile-enabled purchasing,” he said. The technology “is a glorious intersection of everything you want to know and everything they want to know about you.”

Big retailers are getting in on the action. A retail consortium called MCX in Boston last year launched a pilot of its mobile wallet, CurrentC.

Cook expects his mobile payment system to be attractive to smaller retailers because there’s no upfront investment in hardware.

AltPay had revenues of about $70,000 in 2014 and expects to generate about $250,000 this year. The company will have several revenue streams including the store transaction fees, store credit extended to consumers, digital marketing income and money transfer between debit or checking accounts and the app account.

The company has a staff of seven and is hiring people for sales positions.

Eventually, Cook hopes to take Altpay national, and he also is developing business in Brazil and Colombia. He’s not concerned about other entrepreneurs, which seem to be focusing on the large retail chains.

“The retail industry is so large that if you have a good product, there is going to be a place for you,” he said.

This article first appeared on SunSentinel

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