Retailers are constantly facing a dilemma: pass credit card processing fees onto their customers or pay the costly fees themselves and impact their bottom line.
As credit card companies continue to hike their fees in 2019, a game changing way for businesses to accept payments has entered the marketplace.
AeroPay is a mobile payment solution that allows merchants to accept ACH payments from their customers through the AeroPay mobile app. Store owners and their customers can initiate point-of-sale transactions without swiping a card or exchanging cash. This allows businesses to avoid costly transaction fees and minimize the risks associated with having cash present in their stores.
For a business to use AeroPay, a store owner verifies their personal and business information through the AeroPay platform. After linking a business bank account, they can start offering their customers a new payment experience to transact with their business.
Similar to how merchants are onboarded, customers verify their identity and link their bank account through the AeroPay mobile app to begin making payments at participating businesses. Payments can then be completed with only two easy taps and a single tap for authorization by the merchant.
After that initial visit, the app uses bluetooth to recognize and send a notification to the customer’s phone with an option to “tap to pay” when ready each time a customer walks back into the participating store.
“We’re creating a unique experience for the customer and merchant, while also helping the merchant save on credit card transaction fees,” says Dan Muller, AeroPay CEO & Founder. “The big-box stores can afford to take a hit on charges; that’s fine. Smaller businesses don’t have that luxury.”
With a background in mobile app development—having built apps for retailers like Foot Locker, Adidas and Best Buy—Muller noticed that most of the mobile payment innovation that has been happening was revolving around credit card infrastructure.
With the ACH Network having the lowest per transaction fees, Muller found a potential solution to a problem.
“The small businesses still have to pay enormous fees,” Muller says. “So we decided to start a new payment method altogether.”
With over 100 businesses using the AeroPay payment software throughout the Chicago area, the arrow is pointing up for AeroPay in 2019 as the adoption of the application among end users continues to grow.
With experience building private-label, mobile payments solutions, Muller wasn’t lacking confidence or knowledge around payment integrations. He just wanted to focus on the front-end user experience and offer a unique payment experience.
“We really want to change the way people think about how mobile payments can be,” Muller says. “Given that we wanted to focus on quick onboarding and front end experiences, we didn’t consider diving into becoming the processor.”
With AeroPay based in Chicago, Illinois, Muller knew of Dwolla as another Midwestern tech company focusing on payments, specifically the ACH Network.
“What was attractive about Dwolla was the dedicated focus and resources around ACH and bank transfer capabilities,” Muller says. “Having a payment partner that was dedicated to ACH and onboarding to ACH, that was attractive to me because I knew that partner would handle those different components that are specific to a bank transfer payment.”
After testing in the Dwolla Sandbox and communicating directly with Dwolla’s customer success and developer advocate teams, AeroPay integrated Dwolla’s ACH payment API to facilitate ACH transactions through the platform within just a few weeks.
“We like having such a reliable partner for our payments so we can keep the experiences for our merchants and their customers as fluid as possible,” Muller says. “When I think of Dwolla, I think of a leader in the ACH payment space and a great Midwest company that is representing Midwest technology.”
Mobile payments work for both sides of the transaction. We’ve created an ecosystem with Dwolla that is a win-win. We want to take a practical approach to growing something new that effectively is changing consumer behavior.
Quick Onboarding, Quicker Payments
Members of the AeroPay team work directly with each merchant through their initial onboarding and setup. AeroPay Sales & Partnerships Manager Alex Lipnik leads the onboarding processes with new customers.
Lipnik said what traditionally has been a remarkably complex process has been simplified into four important pieces of information.
“Through our platform and with Dwolla, the onboarding process is so simple that merchants are even able to onboard themselves,” added Lipnik. “But more often than not we do the onboarding with them in-person as we like to take a hands-on approach and build relationships with our merchants.”
The onboarding process for customers is even quicker.
“In terms of the end user, the onboarding is a quick two-minute process. Download the app, create a profile, link their bank account and it is set. Through the AeroPay platform and Dwolla, it is so simple to streamline payments,” Lipnik says.
Muller says, in addition to the savings, it’s the community-based approach and AeroPay’s unique payment experience that differentiates AeroPay from the other merchant services small business owners are pitched on a daily basis.
“As we meet with these business owners, their experience has to line up with our messaging,” Muller says. “There’s an initial reaction to the idea of becoming a cashless business. Understanding that we do need an alternative middle ground, a digital cash-based option, is what we are aiming to provide.”
Investing Their Savings
As more and more merchants see the benefit of using the AeroPay platform, Muller says their model will continue benefiting both sides of the transaction.
“Merchants save on credit card fees and are able to reward customers as a result of those savings,” Muller says. “We want to continue to build on the rewards feature and continue to create a model that takes savings and easily rewards customers for repeat business to the local merchants and use of the AeroPay app.”
With the savings, Lipnik says merchants will take home more money from each transaction and customers will be able to earn cash back on every purchase.
“If we can get people through lines quicker, that’s a better customer experience and potentially allows a business to serve more customers in a shorter amount of time,” Lipnik says.
Muller says this ecosystem is going to help consumers move away from plastic cards and paper currency.
“Mobile payments work for both sides of the transaction,” Muller says. “We’ve created an ecosystem with Dwolla that is a win-win. We want to take a practical approach to growing something new that effectively is changing consumer behavior.”