The first deployment of Zoosh will be in loyalty-program apps created for small merchants by fellow startup Sparkbase. The technology will be in use at “tens of thousands” of small stores and cafes by the fall, says Alsberg.
Laura Chambers, manager for mobile at the payments processor PayPal, wrote in a statement that she and her company were “very excited about Naratte’s Zoosh technology” after seeing it demonstrated. “Zoosh’s approach provides instant scale,” she said, “which is a major hurdle for most mobile payment technologies.” Naratte is keeping quiet about its relationship with PayPal, but even without a partnership, has built a demonstration app (pictured) that allows contactless PayPal transactions, using publicly available application-programming interfaces. Naratte is also in talks with various cell-phone carriers worldwide.
Avivah Litan, an analyst specializing in payments technology for Gartner, an IT research and advisory company based in Stamford, Connecticut, says Naratte’s technology looks promising, but she adds that contactless phone payments have been slow to arrive mostly for business reasons, not technological ones.
“Card companies have offered contactless payments, albeit via plastic cards with special chips, for many years now,” she points out. But there is little evidence that either these or phone-based payment systems will much benefit businesses. “Without a compelling business value—more revenue for equal or lower costs, or significantly higher transaction throughput—we won’t see any more adoption than we have seen to date,” she predicts.
If contactless payments do become more attractive to businesses, though, Naratte may be well placed, says Litan. “[It] would help accelerate adoption,” she explains, “since the market wouldn’t have to wait for consumers to buy NFC-enabled phones.”