Lion's Lair: Hamilton company has payment solution

As part of some field research for his company, Jim Rudnick went to a local gun show.

It's an event where so much cash is spent, the ATM machine is filled every hour.

Rudnick is the CEO of Hamilton-based Snappay, an app that allows merchants to accept credit card payments directly on their smartphone.

He picked up a rifle with a $2,800 price tag at the show, thinking “wouldn't it be great to pay for this with a credit card?” and asked the merchant.

The merchant was considering the idea when Rudnick asked if he is ever worried about the security of his growing mound cash.

“You think someone is going to hassle me?” the gun merchant told Rudnick. “I've got enough ammunition to blow their head off.”

It was a cue to move on.

Rudnick didn't attract the attention of this guy, but he found two other gun merchants interested in his app. He visited them at their next show, where they accepted several payments using the app.

“It's a sales-limiting factor,” said Rudnick. “No credit card can mean no sale.”

That's where Snappay comes in. A merchant can launch the app and input the payment amount. Then the device's camera snaps an image of the customer's credit card. Enter the card's security code and the item is paid for.

“It's for people who make jewelry at their kitchen table,” Rudnick said.

Snappay has 600 registered users worldwide. They are musicians who sell CDs after their concerts. They are contractors who operate their business out of a truck and crafters who sell their goods at trade shows. They are “non-brick-and-motor” merchants, Rudnick said.

Snappay even has users Rudnick didn't expect.

“We have a guy in Vietnam on a marina,” he said.

Boats pull up to the marina and the Vietnamese man refuels them.

“He uses Snappay,” Rudnick said.

The man

Rudnick is a seasoned businessman and entrepreneur with 40 years under his belt. He's built quite the eclectic resume.

“In the '70s, answering machines used to run on tape,” he said. “It was my idea to have stars — celebrities — answer the machine.”

Rudnick, in his early 20s, invented the “Phonies,” a series of tapes voice actors that made it sounds like Crosby, Stills and Nash or Mae West were answering your phone.

After a few years, Rudnick decided he wanted a change. He wanted to own a bar.

Rudnick owned and operated Feathers on Young Street in Hamilton for two years.

“It was disco dining at its finest,” he said.

And from there, another change into the beer business. Rudnick did sales for Labatt and traveled around Canada from the Briar Cup to the Indy to fishing tournaments in Northern Saskatchewan.

Rudnick realized he preferred being his own boss and went back to owning a small business, and the local Hamilton economy.

“I'm a strong Hamilton supporter,” he said.

Rudnick has always been a member of the local Chamber of Commerce and various Bias.

At 63, this entrepreneur and father of three adult children is still inspired by local business leaders. He cites the Innovation factories Ron Neumann, Trivaris' Mark Chamberlain and the Chamber's David Adames as “wonderful people leading the way.”

“It's guys like me who look up to them,” he said. “These are the Steve Jobs of Hamilton.”

The company

“Every start-up needs two bodies. One has got to be the [Chief Technical Officer], the geek. The other is the hustler,” Rudnick said, reciting a quote. “I'm the hustler.”

Snappay started out as a one-man show. Lorne Lantz (the geek), 34, was an MBA student at McMaster University. Rudnick said Lantz was approached one day by someone who needed a mechanism to sell tickets and organize a campus event.

Lantz was known to be good at web coding, and he took the job. The end product was the invention of Groupstore, a website that acts like a store for student group events, selling tickets and organizing guest lists.

Groupstore took off, and Lantz brought it to the Innovation Factory. He was mentored by entrepreneur-in-residence Robin Hopper, who saw the true genius in Lantz's site.

“That payment module. That's it,” Hopper told Lantz.

Lantz then created the app and partnered with PayPal. The IF approached Rudnick to handle the business side of the company and Snappay launched in March.

Rudnick said a unique difference between Snappay and a bank credit card machine is merchants can access their money immediately after a payment with the app. There are no “holdbacks,” he said, or when the bank withholds money from the merchant for a period of time.

“The woman who makes jewelry in her basement doesn't want to wait three days to get her money,” he said.

Snappay works on iPhone and Android devices, and iPads and Blackberry Playbooks. Rudnick said the app is completely secure.

“We don't see any numbers, but we do see who made the purchase,” he said.

But the best part is the technology was created all in Hamilton.

The Lion's Lair pitch: Why Snappay should win

As it stands, Snappay charts about $1,500 a day in payments made to its merchants, Rudnick said.

That's minimal in comparison to its counterparts. PayPal rings in at $150,000 per day and Square, a U.S.-only mobile payment method, makes $16 million.

“The concern is there is big competition,” he said.

But that's more reason for the Lions to invest in Snappay. They have a viable product that could give Hamilton a competitive advantage, Rudnick said.

Lantz, who has won awards for his technical work, is also in demand. After coding Snappay, Rudnick said PayPal is after him and Square has been in touch.

“I'm confident that our app is as good as it gets,” Rudnick said.

There are a few things Snappay is looking for — a RIM programmer so the app can be compatible with a Blackberry and the opportunity to patent more IP.

Rudnick said they'd also start a social media campaign to gain more exposure.

But up against his nine fellow Lion's Lair finalists, Rudnick said Snappay is one of the few companies that is off the ground and that would make a good investment for the Lions

“The bottom line is we're out in the market and we can actually compete,” he said.