With Small Business Saturday just around the corner, a new Chicago startup wants to help mom and pop shops reduce how much they pay in credit card fees through a new in-store payment app.
AeroPay, founded just last year, is a mobile payments solution for small businesses that works like a cash transaction between merchant and customer. Both the business and customer download the AeroPay app, which the user connects to their bank account. When ready to make a purchase, the customer selects what they want to buy, the store authorizes the amount, and the shopper confirms the purchase. No cards are swiped, no cash exchanges hands, and the customer can just walk out once their transaction is approved.
The whole experience has an Amazon Go-type feel, but the real benefit comes in cost savings for the merchants, who are charged just 1% by AeroPay---rather than the roughly 3% (or sometimes more) when accepting credit cards.
"We want to create a movement around supporting local business," CEO and founder Daniel Muller said. "The goal is to bring the convenience of peer-to-peer solutions like Venmo, Cash App or Zelle, but to do it on everyday purchases in store."
For the consumer, yes, it's another app you'll need to download. But shoppers are able to earn discounts on things they purchase via the app, and Muller said it expects to add other loyalty features down the road. Muller said AeroPay has more than 50 Chicago merchants on its platform, including Ritual Coffeehouse in Ravenswood and 3 Squares Diner in Uptown.
As massive corporations like Amazon and Walmart slash prices and put a squeeze on mom and pop shops, there's been an increasing focus by many shoppers to support local businesses. Muller is hoping those same shoppers will see AeroPay as another tool not just for discounts, but as a way to boost local merchants.
"We’re trying to create an emotional thread between the customer and the business," he said.
Muller said AeroPay has raised a small "pre-seed" round, and it's looking to raise a round of institutional capital next year. It also wants to expand to more cities across the country, especially college towns and other small cities.
