Cardfree Addresses Mobile-Pay Complexities to Fuel Its Global Push

Cardfree, a mobile payments provider run by several of the people who designed the successful Starbucks mobile payment app,  is using cloud-based technology to simplify the process of deploying its technology as it eyes international markets.

To this end, it is partnering with Xpient Solutions, which offers a cloud-based system that can work with a number of transaction management systems, and is hardware- and software-agnostic.

"It speeds the time to market and the whole process for the merchant," says John Squire, founder and CEO of Cardfree.

Cardfree, a two-year old company that has specialized in providing mobile commerce services to mid-sized food chains, will be able to leverage Xpient Solutions' expertise, which includes point of sale technology that's used by 17 of the largest 50 quick service restaurant brands.

The differences in point of sale hardware and software can create friction for restaurants that are adding mobile commerce features such as payments or pre-ordering. This challenge that is particularly acute for chains that use a franchise model, Squire says.

The two companies will offer an omni-channel payments, CRM, loyalty, order-ahead, stored value and back office suite to their joint customer base, as well as forge an expansion into international markets.

Adding a mobile payment option can be difficult, says Rick Oglesby, a senior analyst and consultant at Double Diamond Payments Research. "Not only are there a multitude of different players out there, but there are lots of different versions of the software."

Many older products are desktop-based, so each restaurant location would have to purchase and hook up an interface to support mobile payments, Oglesby says.

"And the in-store hardware configurations can vary quite a bit as well," Oglesby says. "Therefore these mobile commerce companies can have a big challenge in now only convincing their target market to buy, but also in simply enabling their target market to buy."

Cardfree is frequently asked for guidance on point of sale providers that reduce this friction, and teaming with Xpient will remove these pain points for clients, Squire says.

"Xpient is certified across all major points of sale, so their software can be extracted and placed in hardware that already exists," Squire says.

The two companies' international push will likely start in Europe, then move to Asia and other regions over the next few months. The companies will also co-develop mobile customer service products, and will look to tie features to mobile pre-ordering, which Squire says it starting to gain traction at restaurants.

"Pre-ordering has become more relevant in the past year than before," Squire says, adding adoption of pre-ordering was initially slow because of the staff training and new workflows required. "But most merchants are now working on that, and pre-ordering has become an important part of service for them," Squire says.

Cardfree has been gradually adding services over the past year.

It recently partnered with Mercury Payment Systems to combine core payment processing and merchant services with other Cardfree services, such as mobile gift cards and offers. Cardfree also has a patent for technology that integrates reservation, payment pre-authorization and transaction management with a merchant's point of sale system.

"Changes at the point of sale can be a significant hurdle for the adoption of alternative payments within the store," says Denee Carrington, an analyst at Forrester Research. "Cardfree's partnership strategy to reach quick service restaurants, a primary target segment for them, is not just smart but will help expedite adoption of their solution vs. one-off integrations. Nearly all of the top ten quick service restaurants have adopted mobile payments and are integrating loyalty, coupons and other customer engagement tactics."