play2pay Raises $13M to Monetize Mobile Engagement

Gamification and the Future of Payments

The integration of gamification into payment systems isn't a novel idea. Numerous organizations are actively exploring innovative methods to merge these two concepts. Today, Play2Pay, a company focused on this intersection, has announced a $13 million Series A funding round.

Play2Pay's Core Mission

This Miami-based startup operates with a clear objective. It aims to empower consumers to lower their bills – reportedly by an average of 30% – through participation in games, video viewing, and completion of challenges, offers, and surveys.

For its initial five years, Play2Pay relied on self-funding. Its first external investment arrived in June 2020, a $7.5 million seed round sourced from individual angel investors. Telesoft Partners spearheaded the Series A round, with contributions from Harbor Spring Capital and individual investors like Ralph de la Vega (former AT&T vice chairman), Tom Glocer (former Reuters CEO), Jim Perry (Madison Dearborn Partners co-founder and senior advisor), and Kris Canekeratne (Virtusa founder and former CEO).

A Value Exchange Model

The company positions itself as an alternative payment platform, facilitating a “value exchange” between brands and consumers. User attention and engagement are converted into a usable currency, redeemable for bill payments. Simultaneously, brands gain a novel avenue for promoting their offerings.

Brian Boroff, Play2Pay’s founder and CEO, launched the company in 2015. His initial vision centered on providing prepaid mobile users with a payment alternative and envisioning a commercial model for wireless carriers supported by advertising.

Positioning and Unique Capabilities

Currently, the company asserts its position as the world’s first “ad supported payment rail,” directly integrated into the payment platforms of major service providers and financial institutions. It also claims to be uniquely capable of converting user engagement directly into bill payment.

The offering is entirely “opt-in” and is presently accessible to over 100 million mobile subscribers across the United States, United Kingdom, Mexico, Brazil, and Indonesia. This reach is achieved through partnerships with telecom companies including AT&T Mexico, Cricket (U.S.), TIM (Brazil), Indosat Ooredoo (Indonesia), and Lycamobile (U.K.).

Growth and User Engagement

The rewards-based system appears to be attracting users. According to Boroff, a seasoned telecom professional, the startup experienced a nearly 300% surge in ARR (annual recurring revenue) between June 2020 and June 2021.

Approximately 25% of engaged users generated revenue on a daily basis. Furthermore, service providers reportedly saw revenue expansion of up to 17% due to subscriber engagement on the Play2Pay platform, as stated by Boroff.

B2B2C Distribution and Data Sharing

“Our distribution model is B2B2C, with Tier-1 service providers worldwide directly integrating our bill payment capability. We expand our audience by promoting the service to their customer base,” Boroff explained to TechCrunch.

Users can voluntarily share their targeting preferences in return for value, providing mobile app developers and brands with enhanced data for promoting their products and services to the Play2Pay audience.

Cost Structure and Revenue Generation

The platform is offered free of charge to both service providers and merchants, eliminating costs associated with interchange, acquirers, chargebacks, or gateways.

Instead, Play2Pay generates revenue from mobile app developers and brands. These entities pay for access to Play2Pay’s mobile audience to promote their products and services. For instance, a mobile gaming company might pay $100 for each user who downloads their app through Play2Pay and engages with it for a specified duration (e.g., two hours). Play2Pay’s technology and network provide attribution tracking, ensuring transparency for both the user and the gaming company regarding progress towards achieving the goal. Additional formats include video views, survey completions, and conventional native advertising.