Many people avoid making payments online. In addition to data security issues, the long and tedious process of entering payment details leads a number of would-be Internet customers to give up before completing the transaction.
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"People forget that the most important person when it comes to e-commerce is the user," says the CEO of Israeli startup Zooz, Oren Levy. The company provides developers of mobile applications with payment software that is easy for both developers and their customers to use. "We see an abandonment rate in the vicinity of 95%," Levy said, referring to the online-retailing term for shoppers who do the virtual equivalent of leaving a filled shopping cart in a bricks-and-mortar store and walking out. "On mobile devices it's a particular problem, as a result of the small screen size and the inconvenience" of typing into a tiny physical or virtual keyboard," he noted.
Zooz, Levy says, seeks to give online retail sites something like the 1-click ordering of e-commerce giant Amazon.com. "Payment systems today are dumb systems that can be significantly improved," Levy says. After their first purchase on an app using Zooz, shoppers can use one-touch payments for subsequent purchases. The company recently added In-Ad Payment, a feature that allows mobile users to make purchases directly from a banner ad without having to leave the web page.
Who are your clients?
"We have 6,000 merchants, mainly small and medium-size businesses, nearly all of them abroad. Some have a monthly turnover of $5,000 and others $250,000. In Israel we work with Hulyo, an app for getting last-minute, discount flights," Levy says. He adds that 60% of Zooz's business is from mobile apps and 40% from desktop or laptop use.
Levy stresses that Zooz is a software developer and does not process customer payments. "We're a payment platform, but I'm not a payment processor. I connect to payment processors like credit card companies, PayPal or its competitors. We supply a layer on top of the payment processing which improves it. It's called payment optimization and it's a field with almost no rivals for now.
"Payment processing is just one of Zooz's features," says Levy. "We can identify a user's geographic location and use it to offer a relevant payment method. We can identify when he is about to abandon the transaction and offer an alternative means of payment, and we are constantly working to simplify the process, to examine what works best for users. We don't ask [users] for anything that isn’t essential. We examine every button. In addition, merchants can add features such as antifraud technology and the capacity to issue receipts and the like."
Do you make your money from commissions?
"In some of our territories, like the United States, we work with large payment processors that offer [our services] to clients without any additional fee above regular payment-processing, but the processors do pay us a commission on every transaction. In some countries, like Israel, there is an additional fee of about half a shekel per transaction."
Zooz was founded two and a half years ago by Levy together with Ronen Morecki, the company's Chief Technology Officer. In September 2011, Zooz raised $1.5 million from Kima Ventures, Lool Ventures, Rhodiom and angel investor Eilon Tirosh, aong others.
Two months ago the company raised $2 million in a second round of financing, led by California-based XSeed Capital and including many investors from the first round. Zooz has 10 employees at its Ra'anana offices and is making plans to hire five more.