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November 01, 2006
Irish Startup With Way To Pay Before You Buy Online To Save
Atlas and Benchmark have teamed up to back a €20M expansion round for 3V Transactions, an Irish startup that's developed a prepaid card scheme for consumers.
3V was founded in Dublin in 2004 to target what it says is a €500B European prepaid market and was until recently majority owned by Alphyra, the Irish payment processing company. Update: And its tech is patented, according to Fred Destin of Atlas Ventures (blog link below).
Why a startup has an opportunity to do this kind of thing and not an established credit card, or traveller's cheque company, or even a wily mobilephone company, just shows how complacent these industries have become.
Yes, Visa is working with 3V on this one, but as we see it, Visa will not be getting the lion's share of the opportunity. It will be the startup, an Irish bank (permanent tsb), as well as Alphyra.
Note that Alphyra, is also in the Benchmark portfolio. The venture firm financed an MBO back in 2003. (Benchmark may have become famous for an early stage investment in eBay but in Europe, the firm does a lot of growth, late stage, and buyout investing. )
So Benchmark benefits twice from incumbents not connecting with a ball that has been in their court for over six years when online shopping started to grow and Europe's online payment startups were ailing and failing.
We can see this being popular for buying cheap flight tickets online. We've been flying Easyjet lately - the alarm:clock network is a thrifty organization. Since Easyjet breaks out the amount of the fees charged you can clearly see who's gouging.
For a ticket from Basel to Paris return, we pay an additonal 20 percent of the ticket price - due to a minimum transaction fee and an additional percentage of the purchase price - just for the privilege and convenience of using MasterCard. Debit cards are the cheapest option with Easyjet but it doesn't have many signed on yet.
We definitely think there's opportunities to undercut the fees that credit card companies charge, but the alternatives have to be easy, transparent, and widely accepted.
Read - 3V secures E20m in funding for expansion (Business World)
Read - 3V Newest From (Fred Destin blog Atlas Ventures)
Posted on November 1, 2006 04:39 PM | Posted to News And Updates | Venture Capital | Permalink
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