In Europe, and especially the UK and Sweden, customers are increasingly looked for faster ways to check out when they pay for goods.
According to a 2018 Access To Cash report, only 30% of UK transactions use notes and coins, with that figure predicted to fall to 10% over the next decade.
The situation is even more acute in Sweden where the ratio is down to 15% and the country on its way to being cashless within the next five years, although many commentators expect it to happen much earlier.
Consequently, shops and supermarkets have been transformed by technology that allows them to pack and pay for their goods faster than waiting in a queue to be served by a human.
Currently, these payments systems are cumbersome, they vary from merchant to merchant and need a human to oversee their operation.
However, as the technology improves and customers change their behaviour, however recalcitrant their original attitude, the sight of humans behind a check-out will soon disappear.
Everybody’s in a hurry and nobody wants to wait around doing tasks that consume their time and now FinTech companies are moving fast to give them other options to pay shops and merchants.
One such company is Mash, a Finnish-based payments company that says it is offering a ‘third way to pay’ at check-outs aside from credit cards and cash.
While cash is, indeed, becoming obsolete, the ability to use contactless credit card solutions for small amounts (usually around £30) has seen check-out times fall dramatically.
However, for amounts above £30, delays still happen when customers have to wait for credit card transactions to go through and this is where Mash comes in.
Customers use a so-called frictionless pay-later solution to do so. Once the customer uses Mash, within 14 days, customers receive an invoice to pay the balance in full or choose to convert the payment into a monthly instalment plan.
Mash also uses technology to onboard a customer for a pay-later option at the same speed as a credit card transaction without the need to fill out complicated forms.
Mash operates in Finland, Sweden, Poland, Spain and Luxembourg with thousands of merchants, the number of these merchants has grown by more than 1,000% in 2018.
For this service, Mash does not charge merchants and they take on the credit risk themselves, thus increasing basket size and the value of a customer to the merchant accepting Mash’s technology.
The technology works on any point of sale terminal through Mash’s partnerships with Verifone and Nets.
Founded as Euroloan in 2007 (a lifetime in FinTech), Mash says it has evolved advanced proprietary algorithms and machine learning capabilities over this time to create its automated platform.
Mash makes its money from consumer lending (typically cheaper than a traditional credit card) and is free for merchants. The value for merchants accepting the Mash option means increased average store orders and greater average spend.
The company is now experiencing rapid growth as cashless payments increase. According to its latest 2018 figures, Mash revenues grew by 99% year-on-year to €14.7 million ($16.7 million), while EBIT increased 134% and 266%, correspondingly, to €5.5 million ($6.25 million).
Lending volumes for H1/2018 were 77% higher than H2/2017 and 170% higher than H1/2017. Moreover, equity increased by 46% in 2018, maintaining a strong equity ratio at 27%, while the total loan portfolio increased by 55%.
In May 2017 the company stepped up another level when it brought in James Hickson in as CEO.
Hickson previously had a 15-year career at Morgan Stanley across London, Saudi Arabia, Hungary and New York, where he built his FinTech experience and mentored more than 1,000 FinTech companies in New York.
He has also built an investment bank in Saudi Arabia and a global technology center in Hungary.
CEO James Hickson believes Mash is the third way to pay.Nicole Lopez
Speaking exclusively by telephone to Forbes, he said that his company has ‘soft-circled $100 million in investment for its next stage of funding and is ‘being thoughtful about the strategic lead of another $50 million’.
Hickson says that he expects a total of $150 million funding to be announced by the end of Q2.
We use our technology to onboard a customer for a pay-later solution while giving merchants the superpower to increase their business.
We want to be the third way to pay in the markets we operate and we know customers and investors are backing us to do so. We want to improve the quality of checkouts with our solution that in some instances, is even faster than a credit card.
Mash faces competition in the pay-later market with Swedish company Klarna, (founded in 2005 and another old-timer) which offers similar payment plans.
Klarna charges 2.95% & 5,99 SEK in monthly fees while Mash is free for Merchants to use. Klarna consumers also have to be pre-registered. Hickson says Mash can onboard a new customer in seconds
We’ve often been called the ‘Klarna on steroids’. They’re a fantastic company and, just like Visa and Mastercard, I see room in Europe for another strong player.
As the demand from customers for fast checkout times at the world’s stores increases, so the need for payment options will accelerate.
Mash, not cash, appears to be one such option. Only the future will tell if it checks out.