Making payments painless
Internet Software & Services
Santa Monica, California
Digitzs is a painless, quick, profitable way for online merchants to get paid.
To understand the advantages of its offering, let’s back up for a minute and look at the sector it’s in…
Seventeen years ago, PayPal solved a major problem:
It allowed two parties that didn’t know each other to send and accept payments online—quickly, inexpensively, and securely.
As the popularity of online commerce increased, PayPal grew tremendously. Today, it enables about $200 billion in transactions each year.
But despite PayPal’s growth, and despite new solutions like Apple Pay and Square, big gaps and inefficiencies in payment technologies still persist.
For example, entities like city governments send out parking tickets via email, but they have no cost-efficient way to accept payment online.
And many service providers, from graphic designers to lawyers, aren’t set up properly for e-commerce: they don’t have a secure website, and since they work remotely, they’re not able to “swipe” a customer’s credit card in person.
Merchants and entities like these generate a trillion dollars per year—and yet they’re severely limited with respect to their online payment solutions:
If they set up a secure website, they can accept credit cards online—but their merchant fees are as high as 3.5%, and their delays in getting paid are 3 to 4 days…
Or they could take credit card information by phone and enter it online—but that’s time consuming, and it’s not secure.
Digitzs aims to create a better solution.
Simply put, Digitz is an online and mobile payments solution where business owners request money from their customers via email.
When customers click on a link inside the email, they land on a secure page where they can enter their credit card information.
(The process seems very simple, but one payments expert compared it to a duck: calm on the surface, but a lot of paddling going on under the water.)
Instead of paying fees as high as 3.5%, Digitzs merchants can choose a range of payment methods where their fees are as low as 0%.
And instead of waiting 3 to 4 days to get paid, Digitzs merchants get paid the next day—even on Sundays.
As a consumer, this might not sound like a big deal, but for merchants, it’s revolutionary.
As Linda Perry, a former senior executive at Visa, and now an Advisor to Digitzs, says: “They’re doing things that the traditional, legacy processors just don’t do.”
Why don’t “legacy” providers offer the same features?
To explain, Digitzs CEO Laura Wagner made an analogy to the auto industry:
98% of the legacy auto companies make cars that use gasoline. Cars that use electric energy might be more efficient, but that doesn’t mean the legacy car markers will switch. Switching would just be too expensive.
And even if there’s competition from other upstart payment companies, Digitz will leverage its patents to protect itself. (Board member and Intellectual Property Advisor Edward Katzin is the former Head of Global Products for Visa, where he used intellectual property—i.e., patents—to defend the company’s business model and build a competitive moat. He’s helping Digitzs use the same strategy.)
The company’s offering is now live. It works in 160 countries.
For 2016, it has $1 billion in transactions in the pipeline. It’s estimating $3 billion in transactions for 2017, and its goal is $10 billion for 2018.
The company believes that the competitive barriers it’s erected are high, and that it is focused on an attractive market for acquisitions: Payment processor Braintree, for example, was acquired by PayPal for $800 million in cash, and MasterCard bought APT for $600 million.
The company’s goal is to capture a “modest portion” of the trillion-dollar market it’s going after, and be acquired by 2020 by a legacy provider.
As David Jaques, the first CFO of PayPal, has stated: “Now that one of the largest banks in North America has taken an equity stake in Digitzs, this feels like a similar path to what I experienced at PayPal nearly two decades ago.”
As Linda Perry said: “I was head of acquiring at Visa for 17 years. I am familiar with virtually every payment processor in the US both large and small. Digitzs has the most disruptive platform and business model I’ve ever seen.”
And here’s what Kevin Harrington from ABC’s Shark Tank said: “I’ve processed billions in card payments for my infomercials. Becoming an equity owner in Digitzs is my way of getting even on all of those fees (and more). Digitzs has the team, the traction and the technology to be the next big disruptor in the trillion dollar payments space. I’m thrilled to have an early stake in this promising company.”
David Jaques – Co-Founder & Chairman of the Board
Jaques was the first CFO of PayPal.
He was also formerly the Treasurer at Silicon Valley Bank, and a Director at Blue Run Ventures, a venture captital firm focusing on mobile and IP-related start-ups.
Laura Wagner – Co-Founder & CEO
Laura has 20 years of experience in the payment space and holds 20 different trademarks and marketing patents.
Laura was formerly the founder of OTC, which pioneered card payments in McDonald’s and other QSRs (Quick Serve Restaurants), and paved the way for First Data’s $220 million acquisition of PayPoint.
For many years, OTC (Over-the-Counter) Innovations was the largest processor of card payments in the Quick Serve Restaurant (QSR) industry. Founded by Wagner in 1999, OTC enabled fast food restaurants to accept debit card payments at the counter and drive thru at no cost to the owners (a 50 cent fee was added to the customer’s order instead).
Wagner developed strategic partnerships with major payment processors, created the company’s award-winning brand and personally secured marquee endorsements from McDonald’s, Burger King, Taco Bell and Dell Taco.
OTC’s processor, PayPoint, was purchased by First Data for $252 million due in large part to OTC’s QSR portfolio.
Laura earned her degree from the University of Texas at Austin.
Edward Katzin – Advisor
Prior to taking on his current role as worldwide head of retail payments at Apple, Edward was CIO at Revolution Money (sold to American Express) and head of global product, strategy and innovation at Visa where he filed 38 patents.
Linda Perry – Advisor
Linda was the head of Acquiring at Visa for 17 years, and was named “The Most Influential Women in Payments” for 3 years in a row by PaymentSource.
Ben Way – Co-Founder & COO
Ben is a renowned startup technologist, inventor, and serial entrepreneur based in Silicon Valley.
He has advised some of the world’s leading institutions, including the White House, to ensure they stay ahead of the future technology curve.
He is a best-selling author, recipient of the millennium entrepreneur of the year award and was recently named one of the top 50 UK Influencers of 2016.
Chairman of As Seen On TV. An original “Shark Tank” investor, and widely known as the principal architect of the infomercial industry.