MagicCube, a startup focused on secure software-based payments and device security, has raised $10 million in funding, the startup tells This Week in Fintech exclusively.

Founded in 2014, the Cupertino-based startup develops software-based security that aims to turn everyday smartphones and tablets into “highly secure” payment and compute environments without any extra hardware. 

CEO and co-founder Sam Shawki likens MagicCube’s tech to a virtual secure enclave or SIM card that protects both the data and the computations performed on it, keeping everything confidential even from the device owner or cloud providers.

Notably, Verifone – a New York-based global payments technology company - participated as a strategic investor in the company’s latest round after having served as a MagicCube customer. The investment represents the two companies expanding beyond “tap-to-phone” and into biometrics and identity, according to Shawki. It also represents MagicCube’s first time expanding outside of tap-to-phone in general.

Prasanna Narayan, EVP and head of product at Verifone, told This Week in Fintech via email that his company is focused on scaling its payment offerings “by embracing new technologies.”

“Our investment in Magic Cube expands our ability to serve our clients who want to secure identity and payments across new and emerging form factors and commerce experiences,” he said. “By embedding Magic Cube’s technology into our suite of products, Verifone can offer wider choices and meet our client needs at every stage of their growth.”

The move is another example of a large company opting not to build certain technology itself, and instead relying on a fintech’s existing technology to help it provide the type of products that it wants without having to spend the money and time to do so.

Expansion

MagicCube’s largest customer base includes global merchant acquirers as well as “large” enterprise merchants in the U.S. and Europe. Historically, the majority of its customers have primarily been financial services companies such as JPMorgan Chase, Global Payments, Fiserv and Paymentsense’s Dojo, but that base is broadening, Shawki said in an interview. It is also expanding beyond payments into biometrics, identity verification and AI security.

“New markets include secure IoT, edge AI inference, and confidential computing for fintech-adjacent sectors like digital identity,” Shawki said.

MagicCube primarily makes money through enterprise licensing and per-transaction fees. 

Repeat investor Bold Capital led the raise for MagicCube, which also included participation from other existing backers Mosaik Partners and ID Tech. An unnamed “large global player in EMEA” also invested, Shawki said. With its new capital, MagicCube has now raised about $46 million.

To get to this point, MagicCube developed a software Trusted Execution Environment (sTEE) — a secure, software-only “trusted zone” that protects sensitive operations such as processing payment data without relying on specialized hardware chips. This approach is called Software Defined Trust (SDT) and aims to give hardware-grade security in a flexible software package.

MagicCube’s flagship product, i-Accept, allows for mobile devices such as phones and tablets to act as secure payment acceptance terminals — meaning merchants can accept contactless card and mobile wallet payments without specialized point-of-sale hardware.

“Unlike competitors who rely on hardware tokens or limited SoftPOS apps, our Software Defined Trust (SDT) platform delivers tamper-proof security purely in software…,” Shawki said. 

The company considers its closest competitor in the tap-to-phone space to be Apple, but only on iOS.