Every time a card transaction is made on a POS terminal, merchants lose a chance to identify and retain their customers. POS terminals were built to process payments, not to identify, or retain customers. But Egyptian startup Zeal has come up with a fix.
Founded in 2020, Zeal has developed middleware that integrates on POS terminals worldwide via either Linux or Android to analyse, reward, and enable merchants to reach back to their paying customers. Customers are also able to track their payments and loyalty points via Zeal, a consumer-facing app.
“Zeal addresses the gap in the market where merchants lose a chance to identify and retain their customers every time a card transaction is made on a POS terminal,” founder and CEO Omar Ebeid told Disrupt Africa.
The startup initially launched the Zeal App in 2020 as a QR code payment and loyalty service. It processed more than 250,000 transactions with about US$2.5 million. The company charged companies 2.5 per cent per transaction, and offered merchants a sophisticated data analytics dashboard. However, it soon realised the problem was much bigger than offering a mobile payment method that only five per cent of in-store customers were using.
“Merchants were willing to pay much more to understand who their daily customers paying by card or cash are and to be able to reach out to them with customised campaigns,” Ebeid said.
So Zeal pivoted, and is now focused on its sophisticated middleware. Retailers pay a SaaS fee to develop a custom-branded mobile app. Zeal’s white-labelled app is integrated with their card terminal, allowing the tracking of any transaction made with the retailer, whether it is delivery or in-store. Retailers receive a data analytics dashboard that has the ability to send customers targeted and automated marketing campaigns based on their behaviour.
The startup has launched in Egypt with Network International, and is planning to pilot its middleware solution in the UK and UAE. The company, which has raised US$1.5 million in funding to date, has also signed agreements with Ingenico and Network International to integrate on their terminals, with plans to launch on one million terminals by the end of 2024.
“Zeal’s vision is to connect billions of customers to millions of retailers worldwide and become a leading provider of embedded VAS for physical retailers globally by integrating its technology on every single POS terminal worldwide, enabling retailers to make data-driven decisions,” said Ebeid.
Zeal’s business model is based on monetising transactional data in multiple ways. One of its revenue streams is through commission per transaction via its terminal-integrated API.
“This allows customers to receive higher value through Zeal’s Global Redemption Points and Brand Loyalty Programme. In addition, Zeal provides merchants with payment terminal integrations. In certain markets, Zeal partners with the acquirer on a SaaS model, where it charges per terminal, per month,” said Ebeid.
Zeal also earns revenue through a commission-based business-to-business model, white labelling, and SaaS, B2B add-ons.
“Overall, Zeal’s business model strives to provide value to all parties involved in the payments industry, including merchants, consumers, and payments networks. By offering enhanced data, analytics, and loyalty programs, Zeal enables merchants to increase their revenue while also providing consumers with personalized offers and access to digital payments. Furthermore, Zeal expands payments networks’ reach to underserved populations, indicating a strong product-market fit,” Ebeid said.