Towards unified mobile payments - the Cashfree story

Interview with the founders of Cashfree:

                          
Peter Opdebeeck                                                             Joel Van Boeckel

Interview reported by Marion Dupire.

Peter Opdebeeck and Joel Van Boeckel launch Cashfree, a unified mobile payment method. Cashfree will allow to process payments between any merchant1 and any consumer, anywhere in Europe, at home, stores, restaurants or on the Internet. The purpose is to provide a unified payment method that is truly instant for merchants at costs that are lower than is currently the case and that allows consumers to get rid of cards.

Thanks to Cashfree, people will be able to pay in a lot cooler way, easier and safer than currently is the case with cash or cards, whilst the merchant will be able to do more business at a lesser payment cost.
By implementing this payment method, it should be possible for the payment industry to take out some $10B in payment costs in Europe.

Peter Opdebeeck and Joel Van Boeckel saw an opportunity in the payment space, based on three main observations: the Internet allows for disruptive payment platforms, merchants want to decrease their payment costs, the European authorities are pushing and regulating the alternative (to card) payments. As a result they decided to create CASHFREE, about a year and a half ago.

From the merchant side, the added value of CASHFREE is threefold: -a- they do not need a costly payment terminal anymore, -b- accepting mobile payments gives an innovative image, -c- it enables to get the money earlier. From the consumer side, it constitutes a response to the increasing demand of younger people for payment systems that are easy-to-use and ‘cool’.

How is it unique?

As the founders acknowledge, Cashfree is not totally unique: “We are not saying that we are unique (…) but it is a fast growing market and we believe there is space for a number of innovative brands in Europe that make use of mobile bank transfers.” Being quick is the main challenge of the start-up. “We are a small start-up, so by definition we have to stay focussed, we do not have as much resources as the big players (…) but we think we can do something when we are quick.”

Currently in the proof-of-concept phase, the company owners are considering potential partnerships with big banks. In such partnerships, they want to bring different things on the table:

1) a combination of different skillsets: “Banks have both digital marketing people and technical talents but we see that it is still a very departmentalised organization

2) a contact with both the end-users and the merchants: “A bank like Belfius in Belgium have relationships with big players like Colruyt or Carrefour but not with smaller companies. We can help banks to approach SMEs.”

In addition, Cashfree offers to consumers the possibility to combine all bank accounts in one single app: “If you rely on banks’ payment apps you need several different apps on your device, one for each bank in which you have an account. With our product you can have all your accounts in one single app.

Confronting a start-up mind-set with the culture of banks

Although no collaboration has been formalized yet, Peter Opdebeeck and Joel Van Boeckel are already in talks with a number of banks for potential partnerships. Interestingly, to the question of whether they experience some kind of cultural clash when talking with those banks, their answer was negative: “So far we have got very positive experience in our conversations with banks because –a- we understand each other in what we are talking about, -b- banks are constantly looking at what is happening in the space. We have always been positively surprised by the way they are monitoring and looking at our innovative approaches. No, there is no kind of clash.

The major difficulty: finding the right talents!

Job opening: Sales and Marketing
Cashfree is looking to expand its team with an autonomous, energetic and talented digital sales and marketing specialist with focus on mobile apps to boost future merchant and customer acquisition. The successful candidate will develop B2C and B2B sales and marketing campaigns in Belgium, while gradually expanding its scope to other countries within Europe, initially organically and directly, subsequently together with a mobile app marketing agency under her or his control. The ideal candidate is a self-starter with an educational background and practical experience in digital sales and marketing, showing a specific interest in mobile app sales and marketing, with the ambition and passion to put the new payment brand Cashfree on the map in Europe.

Our major difficulty at the moment is to find a young and experienced talent in digital marketing,” explains Peter Opdebeeck, “as I said we need different disciplines, Joel is taking care of the product architecture, I take care of the overall strategy. But we lack the young age to live truly in the minds of the Millennials.”

The Millenials are indeed the main target of Cashfree for two main reasons: -1- this young generation does not need to be educated in using their cell phones to pay, because they are not yet so attached to the use of cards, -2- their perception of security is far less stringent than other people. “Even though mobile payments are more secure than traditional card payments, it is still in the mind-set of the public that mobile phones are not very secure., The Millennials however, are confident in the built-in security features of smartphones. They register to an app even before knowing what that app can do. They live in a world where everything is transparent.  These are findings made out of interviews that we made.”

Mobile payment, the most secure payment scheme

Although it is impossible to guarantee 100% security, the founders of Cashfree emphasize on the fact that mobile payment is more secure than most other payment methods. They are confident that the risk of fraud is extremely small and guarantee to the merchants that they are responsible for all payments.

One important feature of Cashfree is a reduction of the amount of time between when the payment is processed and when it really becomes effective on the bank account. As argued by the two entrepreneurs, the shorter this delay the safer the payment. “In a mobile payment, all the credentials are recorded in your mobile device but there is no transmission of sensitive data; we use the built-in security features of the Smartphones, as Visa and MasterCard do for their own mobile payments” explains Joel Van Boeckel.

Misperceptions on the security of mobile payments


Source: GfK FutureBuy 2015

According to the GfK FutureBuy 2015 study, when consumers are asked about their attitudes towards mobile payments, over half of them (52%) are worried about their personal information, while only 16% believe that mobile payments are safer than other payment schemes. However, as emphasized by Spenny (2016)2, not even the FBI can bypass the security systems within Smartphones!

What’s next?

Now in the middle of the proof-of-concept phase, Cashfree is currently being presented to a number of consumers and merchants. The first feedback is very positive and exceeds the expectations of its creators. “Our objective is to make this go through the proof-of-concept phase as quickly as possible, so that we can start building the first version of the product. We will have a Beta version in the upcoming weeks and we aim to launch it in Belgium at the end of this year” as indicated by Peter Opdebeeck.

One of the objectives of Cashfree is also to take part in Fintech ecosystems, “we do share the view that ecosystems are needed in our business and we want to be part of it”. In this respect Peter Opdebeeck and Joel Van Boeckel are planning to have their offices with Eggsplore in Belgium.

Overall the two entrepreneurs have a very pragmatic vision for the future of the financial services sector, “we do not know what will happen to banks, we have to focus on our own small business and that’s it!”. They are convinced that there is a place for being innovative in the financial landscape. They do believe in a cooperation between banks and start-ups as both can benefit from each others’ complementarities and respect.

1 “Merchant” here has to be understood as “Acceptor”. The payment method can be accepted by corporations, doctors, physiotherapists, dentists, lawyers, carriers, schools… in offices or on the road.
2 Spenny, T., 2016. “Apple, the FBI and the security of mobile payments”,
www.mobilepaymentstoday.com

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