PORTLAND, OR -- PayRange is poised for a major rollout of its payment technology, with backing by some of the biggest players in mobile payments and a nationwide pact with Vistar for distribution of its novel devices.
The company's technology, unveiled in April, allows patrons' smartphones to handle the entire vending transaction process over their cellular networks, while using Bluetooth personal area networking to actuate the vend. The system, which uses a small dongle that plugs into existing machines and a mobile app for iPhone and Android users, was tested by 200 operators in 20 states and is now making its commercial debut.
On the heels of a $2.75 million funding round that closed in July, PayRange has disclosed a list of high-profile investors. It includes Nyca Partners, which includes Osama Bedier, former head of Google Payments; Hans Morris, former president of Visa; and Max Levchin, cofounder of PayPal; Google Ventures; Anil Aggarwal and Jonathan Weiner, founders of the Money 20/20 conference; Barbara Corcoran, one of the investors on ABC's Shark Tank; serial entrepreneur and investor Phil Nadel; and Oscar-winning actor Jared Leto.
PayRange founder and chief executive Paresh Patel told VT that having top payment industry innovators as investors not only brings funding but also expertise, contacts and resources to build and scale the company, and to help vending as an industry finally get ahead in mobile payments. "Vending has had a hard time catching on to cashless payments," said Patel. "Seeing these big investors and having their support validates that we're onto something big and that it will become more ubiquitous."
"There is a huge market for mobile payments on machines," noted investor Osama Bedier, who joined the PayRange board on behalf of Nyca, "This space is still 95% cash-based and has yet to be solved in an elegant way. I am a huge supporter of big ideas applied to hard problems, and PayRange has the most impressive solution I've seen to address it so far."
Former Visa president Hans Morris said one of the best strategies in payments is to compete with cash. "Because of the game-changing technology that Paresh has developed, there are another 10 million machines that can come online over the next few years significantly, increasing the number of merchant locations."
PayRange also announced a national rollout in the vending industry through a partnership with Vistar, the industry's largest U.S. vend products distributor. Vistar serves 95% of all operators across 50 states and will be focusing its nationwide staff on sales of the PayRange technology. It's taking preorders for the devices, which will ship in the fall.
"We don't have to configure PayRange to a specific customer, like other payment technologies," Patel explained. "We inverted the whole thing so it works the minute the operator plugs it in. It comes with a registration card that can be completed online so we know where to send the money. We can distribute thousands of the devices and let the customer come back and tell us they own them. They can get 12 a week, or 24 a week, as easily as they place an order for Fritos or Snickers."
PayRange said it is initially distributing its device to vending machine operators, with other vertical industries -- including amusement machines, parking meters, transit ticketing and Laundromats -- to follow.
The Portland, OR, startup has 10 patents pending, covering a range of technologies including a hands-free approach to machine payments.
"While mobile payments is an incredibly hot field, mobile payments on machines have yet to be tackled, and we see this as the last frontier," Patel said. "We are providing people with an intuitive way to use any self-service machine without first having to worry about how to make payment."