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May 23, 2012updated 23 Aug 2016 9:15am

UK mobile payments company 2ergo optimistic despite losses

Salford based 2Ergo has seen its revenues and profits fall in a year that has seen sales of its international businesses and a renewed focus on mobile payments and loyalty schemes.

By Allan Swann

The Salford based mobile technology company is reporting revenues of £4.8m for the half year 2012, a drop from £6.6m this time last year. However, it is an increase from H2 2011, which was £3.6m. Its total losses for H1 2012 was £8.8m, up from £85,000 this time last year.

CEO Neale Graham says the company has used the last year to refocus the company toward mobile payments, as part of a comprehensive strategic review that will dispose of its non-core businesses.

"This has been a transformational period for the Group, paving the way for the launch of our very exciting Podifi technology. We now go forward with an extremely focused business model which is already surpassing our predictions," Graham said.

"We are pleased to see the significant experience gained from our work with Orange Wednesdays, the PizzaExpress PayPal partnership and 3M and Wendy’s in the US manifesting itself in the launch of Podifi our contactless couponing, loyalty and payment platform."

The company has announced that it will be withdrawing from providing ‘providing mainstream mobile solutions’, and to that effect, disposed its Indian development operations, as well as its Australian and American mobile operations earlier in the year, garnering £3.8m in the process. It will also be discontinuing certain UK legacy business lines, such as subscription billing services.

It has since used the proceeds to speed up the roll-out of Podifi, its point of sale mobile payment technology which enables shoppers to use their smartphones to make contactless payments, redeem coupon-based offers and deals, and swipe loyalty programmes.

Transactions can be made using podifi by tapping a smart phone on a pod attached to the till, and require no added technology in the customers mobile phones or in the retailers till. It attaches via a USB cable and can even be used on tills 15 years old. Mobiles do not require NFC built into their phones (currently only available on the newest models), meaning potentially any current smartphone can be used.

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Graham claims Podifi can be easily incorporated into any mobile app or mobile website within hours, and has been designed to interact seamlessly with near field communications (NFC) handsets ‘as or when they become available.’

The company’s Tiktap operates along a similar principle, but is aimed at smaller businesses and is used only for redeeming coupons or vouchers.

As well as simplifying the transaction process – currently hung up in standards battles across the industry (see CBRs story here) – 2Ergo claims it will also be able to provide sophisticated analytics. This provides it with additional opportunities to monetise such insight through brand advertising, the provision of consumer and business data and renting access to the pod network.

Mobile is widely expected to replace physical money and wallets in the coming years, and is expected to be worth £37bn by 2016. Companies such as VISA and O2 are already launching their own mobile wallets and payment systems – mostly based around NFC.

Graham says the company’s sales performance will be greatly enhanced across the remainder of the 2012 financial year, and has already developed key partnerships with several major electronic POS (EPOS) providers, including Casio Electronics, YCR (UK distributor for Sam4S and Samsung EPOS), ICR Touch, Geller, Uniwell and Sharp Electronics, which it claims collectively represents some 500,000 EPOS installations nationwide.

This means that the podifi terminal can now be plugged into any of those EPOS systems, providing immediate plug and play capabilities, with full back office integration and analytics for the management and redemption of coupons.

"In addition, the Board is pleased that TikTap has already secured partnership agreements with Local Government, Retailers, Business Forums and Town and City Centre Management Groups to create a network of local couponing and loyalty programmes. This will become the first UK-wide network of independent retailers, bars and restaurants delivering sustainable mobile offers under a single brand," Graham said.

TikTap will launch its first programmes in Preston, Southport and Skegness, followed by Salford and Blackpool. Following the launch this month, 2Ergo will be pushing targeted local offers and deals through an installed network of podifi pods in and around those towns and cities.

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