With ‘Stuypend,’ a mobile app payment system, customers won’t have to fulfill minimum credit card requirements and merchants won’t get hit with hefty processing fees

Photo credit: Business Insider

Go shopping, support local businesses and save them some money? That sounds too good – but it’s true!

A Bed Stuy resident has co-created a mobile app for local small businesses to help them save on payment processing fees while helping consumers avoid minimum purchase requirements, announced the New School.

Stuypend, a Brooklyn-based app, was co-developed by NYU graduate Andre Powers and works similar to Venmo: upon checkout, customers can present their phone to the merchant device or scan a QR code to receive the bill on their phone. Then, they confirm the total and tip on their phone and authorize payment from their bank account to the merchant.

“For the customer, it’s the same as using a debit card or Venmo,” expplained Powers. “Since our system doesn’t use credit card networks, which take a percentage of every transaction, and is direct from customer to merchant, we are much more affordable for merchants.”

Powers created the concept for the app after speaking with local merchants in his neighborhood. As he learned, small businesses are often burdened with three percent processing fees per transaction and fixed per-transaction costs. For merchants who sell low-dollar items, these fees highly impact revenue and profit margins.

Stuypend co-foudner Andre Powers.
Photo credit: Bed Stuy Blog

“One merchant told me that if he allows a customer to charge just a $2 or $3 cup of coffee, he might lose money on that sale and that’s why he has to have a minimum for cards,” said Powers.

The app can be used alongside any existing Point of Sale and credit card systems. Also, cash-only shops can accept digital payments with Stuypend – without losing a chunk of their revenue.

So far, local businesses including Bar LunAtico, Jordan Heads Brooklyn, Tumbleweed General Store and Gallery are among the 20 merchants who have confirmed that they will be part of the pilot program, which Powers launched with partners Mike Arulgnanendran and Ryan Laszlo.

Stuypend looks like a win-win for both business owners and shoppers: customers won’t have to fulfill minimum credit card requirements before whipping out their cards and merchants won’t get hit with hefty processing fees – the app just made it easier to support small business in the community.

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Andrea Leonhardt

“Made in Germany,” Andrea Leonhardt is the managing editor for BK Reader. Andrea holds a bachelor’s degree in political science, with minors in American studies and education, and a master’s...

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