PALO ALTO, Calif., Nov. 14, 2018 /PRNewswire/ -- Gas Pos today announced a $1 million investment by Merus Capital, a Silicon Valley-based early-stage venture capital firm. Merus' investment will enable Gas Pos to execute on a national roll-out plan to bring its uniquely affordable gas pump upgrade solution to independent retailers concerned over the impending costs of the Automated Fuel Dispensers (AFD) EMV (chip-based card) mandate.
To combat an annual $400 million in fraud, Visa, MasterCard, and American Express are requiring all gas stations to replace magnetic strip-based pumps with EMV-chip reading pumps by 2020. However, the per-station costs are prohibitive: breaking concrete and replacing AFD can require capital expenditures of $25,000 to well over $150,000 for each retail location. Large chains owned by major gas companies can more easily absorb these costs, but for the small, independent retailers, such a financial hit can severely impair their businesses.
Legacy gas pump providers believed a new entrant would require at least three years to build a rival EMV solution for gas stations during which time these existing vendors would realize up to $5 billion in upgrade windfalls. Hailing from a long line of shop owners and entrepreneurs, Gas Pos CEO Joshua Smith saw an opportunity both to help others and to build a thriving business. Instead of the incumbents' rip-and-replace approach, Smith worked closely with industry experts to build an elegant plug-in upgrade module for existing pumps.
Smith says, "We provide independent gas retailers modern business software that meets the requirements of the EMV mandate. There's no upfront cost to the merchant—we only charge a small monthly fee. Our customers love us because we help them reduce fraud while saving them an average of $100,000 in immediate capital expenditures."
Under Smith's leadership, Gas Pos was one of ten startups (out of 281 applicants) accepted into the 2018 Venture Center FinTech Accelerator program, sponsored by FIS, a global leader in financial services technology, and then joined a highly-selective technology startup program offered by the Arkansas Economic Development Commission (AECD).
"Innovation is everywhere. Josh and his team, the Gas Pos market opportunity, and their disruptive solution checks all of our boxes: Strong team, large market, and a sustainable 10x advantage," said Peter Hsing, Co-founding Managing Director of Merus Capital. "We welcome Gas Pos as our first investment in the southeastern U.S. and are excited to help them with their mission to change the basis of competition within the fuel payments industry."
"As is often said, 'For of those whom much is given, much is required,'" says Smith. "That's the philosophy that guides our company and mission. With the support of Merus Capital and others, we have this rare chance to assist the roughly 60,000 independent gas stations that don't have another viable option. Our passion is for our customers. We're going to fix something that is wildly wrong in this industry."
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SOURCE Gas Pos