Merus Capital, a Silicon Valley-based venture-capital firm, invested $1 million in North Little Rock-based Gas Pos, the two companies said Tuesday.
The investment will allow Gas Pos to roll out its national plan to take its gasoline pump upgrades to independent gas retailers.
Those retailers are concerned about the impending costs of installing gasoline pumps with chip card readers by 2020, replacing those with magnetic strip card readers.
The mandate was set by Visa, MasterCard and American Express to combat credit card fraud at the pumps.
"We fight $400 million in payment fraud at gas stations across the USA by preventing duplication of credit cards," said Joshua Smith, 34, chief executive officer of Gas Pos, which stands for Gas point of sale. "This credit card skimming problem is out of control at gas pumps nationwide."
The per-station costs to replace gas pumps can be prohibitive. Breaking concrete and replacing the pumps can require expenditures of more than $150,000 for each retail location, according to Gas Pos.
Installing Gas Pos' card readers on existing gas pumps could help gas station owners avoid having to pay $17,000 for each new pump, costs that can put many owners in significant debt or put them out of business.
The credit card companies are requiring that their mandate be reached by October 2020.
Long-time gas-pump providers thought a new industry entrant like Gas Pos would take at least three years to build a competing solution.
Instead of the rip-and-replace approach for gas pumps, Smith worked with industry experts to build a plug-in upgrade module for existing pumps, Gas Pos said.
"We provide independent gas retailers modern business software that meets the requirements of the mandate," Smith said. "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."
Innovation is everywhere at Gas Pos, said Peter Hsing, co-founding managing director of Merus Capital.
"Josh and his team, the Gas Pos market opportunity and their disruptive solution checks all of our boxes," Hsing said.
Gas Pos is Merus Capital's first investment in the southeastern U.S.
"We are excited to help them with their mission to change the basis of competition within the fuel payments industry," Hsing said.
Gas Pos announced last month that it had moved its headquarters from Birmingham, Ala., to North Little Rock.
Gas Pos is a graduate of the 2018 Venture Center FinTech Accelerator program. In the three years of the FinTech Accelerator program, which is directed by FIS Global, at least eight companies have decided to locate in Arkansas -- Altimize, BankLabs, Mortgage Peer Network, Lumoxchange, Pfiitr, Bond.ai, Egiftify and Gas Pos.
Business on 11/14/2018
Print Headline: Gas Pos gets $1M for pump upgrades