'Hack Day' Shows Disruptive Tech Can Hit Payments Overnight

Pizza boxes, beer cans and laptops littered the top floor of a Manhattan office building as about 225 geeks pulled an all-nighter "hacking" digital commerce platforms to create new applications.

The roughly 30-hour, caffeine-fueled event was eCommerce Hack Day, a slumber party full of mostly twentysomethings competing for $20,000 in prizes. Over the weekend, programmers toyed with text messages, near-field communication technology and payment systems such as PayPal in hopes of finding new ways to facilitate purchases and payments.

The coding marathon underscored the pace of innovation in financial services, and the potential for further disruption for banks and payment networks. Some of the teams that created software at the event were made up of people who had just met one another, yet the event yielded 37 innovative tech "hacks" literally overnight.

"What used to take a team of 50 people to build a huge custom e-commerce site can now be done in 24 hours, and it can look good," says Ben Milne, the chief executive of the alternative payments company Dwolla. "I think that represents an opportunity that has never [existed] in the marketplace before."

Dwolla, of Des Moines, Iowa, started organizing the event roughly two months ago. Others later came on board, such as Zappos; X.commerce, PayPal's developer platform; payments technology company Braintree; and e-commerce website Etsy. The Alley, a shared "coworking" space, hosted the Hack Day.

The NFC Geeks team of Memphis, Tenn., created a way for small stores to leverage NFC tags for expedited checkout. "You, yourself, could actually use us for your shopping cart," says James Ruffer of NFC Geeks. "Install our free plug-in and you could be NFC enabled."

A team calling itself Impulsive.ly created an app that uses text messages to help merchants sell goods. People who want to buy an item could do so by messaging numbers that appear next to an item on a catalogue or on a billboard. Other teams created systems that compare the prices of items across different online sellers, and methods for gathering buyers' Twitter information.

Hackathons, such as eCommerce Hack Day, have grown up around open-source software companies that have hosted such events to get third-party developers interested in their tools.

"You have the most passionate people in software and people that want to build cool [stuff]," says John Bunting, one of the Hack Day judges and the API lead at Tumblr. "That's kind of my motto for it."

Many of the programmers who participated in Hack Day left New York with working prototypes they plan on selling.

"It's all about the minimum viable product …now we'll see how we measure it and say: 'Hey, is this something that you want?'" says Jonathon Ende, a member of the Impulsive.ly team, who is also The Alley's co-founder and chief marketing officer. "We took the weekend as an opportunity to build our original product, and [see] if it has wings."