The headquarters of Santa Clara based PlaySpan is bustling with activity and everyone including the CEO of the company, Karl Mehta seems to be on their toes. And why not? Within four years of its humble beginning in 2007, the company has raised three rounds of venture funding from leading investors in the valley and large mobile operators, the latest being in August 2010 for $18 million. And today it is on its way to disrupt the 50 year old global payment industry with its payment platform — UltimatePay™. With this the company is also in the path of revolutionizing the e-commerce industry by leveraging both online/mobile gaming and social networks on its platform.

Today, with over 28 million users globally (growing at over 100 percent annual rate) and hundreds of millions of audience across its merchant networks, PlaySpan has empowered merchants and consumers across 180 countries with over 90 different payment options with multi-channel devices. Its clientele varies from small businesses to globally recognized brands including Facebook, Warner Bros., Nexon, Perfect World, Hello Kitty Online, Disney, Adobe, Revision3 and Nickelodeon to name a few.

The Technology Gap in Payments
The company originally started with a simple idea to provide an easy to use single-account of virtual currency based on aggregation of multiple in-game accounts and currencies. The idea caught on especially with younger users who needed one account that they can be funded by their parents and can be used at multiple games. The lack of a secured wallet or a digital vault that enables an in-app/ in-game purchase that works fast and across all profiles/ avatars was simply not available from any existing payment providers. Upon further research, they found out that game developers were struggling to keep users engaged and complete a purchase without friction, but the chargebacks associated with digital goods and existing out-of-game ecommerce flows were some of the biggest technical challenges. These pain-points were big enough to convert the idea into a real solution and PlaySpan was founded as a platform where developers and users could enable a secured in-app payment. But eventually, Mehta saw a much bigger opportunity envisioning that this solution will be needed for all digital content or physical goods and across all devices.

“The entire digital space has been undergoing a remarkable change in the past few years. There has been a significant increase in the consumption of interactive media like online/ mobile games and social networking. With digital content going cross-platform across open web to social web to mobile devices, console and web TV now, there has been tremendous interest amongst developers, publishers and merchants to sell digital goods,” says Mehta.

From social network biggie Facebook to online gaming publishers like Zynga, all have ventured into digital goods space by offering Facebook Credits, Game Cash, Game coins, and other online accessories for one’s virtual gaming profile. Players today are wiling to pay for virtual currencies to buy virtual goods. But these goods cost as low as 25 cents to 99 cents. Since, traditional payment gateways like credit card charge anywhere between 3-4 percent access fee per transaction which are cost prohibitive for a sub $2 transaction, and lacks the in-app, cross-platform portable wallet/ profile capabilities that is needed by both consumers and merchants. Hence, it is this gap PlaySpan hoped to bridge by developing a next-generation payment platform.