Schumer on Privacy & Flint Talks Mobile Payments at Street Fight Summit
Technology really does not get any more intimate than the gadgets carried by a person so it is no surprise that a conference on location-based and hyperlocal services leaned heavily on what’s up in the mobile scene.
Last Friday during the two-day Street Fight Summit in New York, mobile payments company Flint announced it raised a $6 million Series B round and then CEO Greg Goldfarb talked with me about what sets his platform apart from others in the space. That was just one example of the way the conference zeroed in on the marriage of mobile tech and personal, localized data.
The summit on hyperlocal trends, put on by media and research company Street Fight in Boulder, also brought out Sen. Charles “Chuck” Schumer (D-NY) who spoke about respecting privacy without stunting innovation. “Location-tracking technology has enormous potential for marketing and improving the consumer experience,” he said
One of the benefits Schumer cited was the ability for retailers to get a better handle on what shoppers want when they walk into a store based on information gleaned from their cell phones—however not everyone may want businesses keeping tabs on them. He acknowledged that location-tracking via cell phones can give some folks the icky feeling of Big Brother watching, yet he says there is leeway to allow the practice.
Putting privacy above everything could shut down the Internet as a retail experience, Schumer said. At the opposite extreme, surrendering all privacy for the sake of openness goes too far. “There’s always a collision between helping people make choices by giving them information they want and privacy,” he said.
During the summer Schumer asked the Federal Trade Commission to develop guidelines so consumers would know what to expect as the technology spreads. However the private sector chose to act rather than wait for regulators to get involved, he said. “The industry stepped up without being required to by the government,” Schumer said. “This is a great model for many areas where technology and privacy bump into each other.”
The Future of Privacy Forum, Schumer, and others last week announced a code of conduct to promote both consumer privacy and responsible use of data. The policy includes posting in-store signs to alert consumers to the fact they are being tracked by retailers along with clear instructions on how to opt out of the service. “[The code] is framed around two important concepts: notice and consent,” Schumer said. Further, companies that collect such data must limit the information based on use and how it will be shared.
Data gathered from devices was on Goldfarb’s mind as well; though he made it clear his Redwood City-based company is not interested in hoarding information from the businesses that use his system. Flint’s platform lets businesses take credit card payments through smartphones that have installed the software without the need to attach a card reader. Unlike some rivals in this sector that seek to own the consumer data they gather, Goldfarb said that information belongs to the businesses using his technology rather than Flint. “For a lot of these businesses, their lifeblood comes out of repeat and referral business,” he said. “We’re not trying to be a lead-gen company.”
A number of other strategic differences, he said, set Flint apart from others in mobile payments such as Square and PayPal. Goldfarb says some peers in the sector want businesses to push customers to also download apps in order to make mobile payments, forming their own guarded community of users. “Their mission is to create the next network, both the consumer network and the merchant network, and ultimately replace credit cards,” Goldfarb said. “They’re trying to build a closed market. We’re not.”
Though it is possible for any sort of company to use Flint, Goldfarb said the platform is best suited for mobile, non-countertop businesses such as photographers, freelance journalists, and fitness trainers. Such service-type businesses do not have brick-and-mortar locations like coffee shops for patrons to visit.The lack of a fixed point-of-sale, he said, convinced the founders to keep Flint simple and eschew card readers.
When a user of Flint wants to charge a client, they use the app with their smartphone’s camera to do a virtual swipe of credit card information. “That is a pretty defensible technology stack,” Goldfarb said. “We have all the algorithms and code around how we do that.”
Flint also has an exclusive patent license, he said, for optical character recognition technology in conjunction with mobile payments. His company, founded in 2011, is a payments service provider, eliminating the need for users to establish their own merchant accounts to start charging customers.
Before co-founding Flint, Goldfarb worked in business mobility as a vice president with Ribbit, a Mountain View, CA-based telecom startup acquired by BT. He said keeping mobile payments simple could pave the way for increased adoption. “Our approach is the most ubiquitously applicable for any merchant that’s got a mobile phone,” he said.
Since so many consumers already carry credit cards, he said it seemed more natural to continue using them rather than push people to try a completely new method such as near field communications and QR codes. “At the end of the day, people have phones and they have [credit] cards,” Goldfarb said.