A Ray of Light?

The past 20 months have been difficult, to say the least, and the virus behind all the headline misery is still with us. And that’s without accounting for Delta and other variants of this plague.

One of the most frustrating logistical problems created by Covid has been the shortages of key components across industries of all sorts caused by snarled supply lines and labor shortages.  But one of the more interesting stories emerging from these issues is how they have underscored the key importance of technology that had been on the periphery and now has the potential to be front-and-center.

A case in point: The global shortage of semiconductor chips that’s whipsawing makers of point-of-sale terminals and other payment devices (“Out of the Chips,” September) has left at least one technology firm sitting pretty.

That’s because MagicCube’s technology enables users of off-the-shelf mobile phones to process card transactions on their devices. No other hardware is needed. In the face of a pandemic  whose duration can’t be accurately predicted, despite vaccines, MagicCube CEO Sam Shawki told Digital Transactions in August the company is attracting greater interest. “It’s wind in our sails,” Shawki said, referring to the terminal industry’s frustrations with the chip shortage. The interview was part of the research for Peter Lucas’s September cover story, “Out of the Chips.”

“This [the chip shortage] has been an element that encourages some players to look at us more closely … Everyone that stopped talking to us are back as they are looking at alternatives,” Shawki said during the interview.

The Santa Clara, Calif.-based company announced last month Mosaik Partners had led a $15-million funding round in MagicCube. Bold Capital, Epic Ventures, and IDTech, a maker of card readers, participated in the round.

The shortage, which began to emerge last year, continues to frustrate makers of conventional payment terminals. One supplier told Digital Transactions that lead times have stretched to 26 to 30 weeks for orders that took 12 weeks to fill before Covid emerged.

By contrast, MagicCube’s software, known as i-Accept, allows merchants to run card transactions on their own mobile devices. So far, the company has introduced the technology, which enables acceptance of contactless cards branded by American Express, Discover, Mastercard, and Visa, in the United States, Brazil, and, most recently, the United Kingdom, and Ireland.

MagicCube could still stumble. And it may not have this burgeoning market to itself. Apple Inc. last year acquired Mobeewave Inc., a Montreal-based company whose technology enables smart phones equipped with near-field communication to act as point-of-sale devices with no other hardware. But it’s helpful to see what could be a ray of light in an otherwise gloomy picture.

—John Stewart, Editor, john@digitaltransactions.net