Enabling lower cost money transfer and access to new financial services to billions of individuals in developed and developing markets, using mobile technology platforms.
This is the – noble – mission that P2P Cash set for themselves. They may be a startup, but they are aiming high. P2P cash is one of the winners, in the “early stage startup” category, of the Innotribe Startup Challenge. As such, they will participate to the big final, which is part of the Innotribe@Sibos stream ofSibos in Osaka, 29 Oct – 1 Nov 2012.
Tom Meredith, the company’s chairman and CEO, and I were talking recently about my favourite subject when it comes to startups – their story. Here is the story of P2P Cash, as told by Tom in answering my questions.
What is P2P Cash delivering?
Tom: ”P2P Cash is working with partners to create and propagate mobile banking standards to enable 3 Billion consumers worldwide to access low cost financial services via their cellphones.Through the Trusted Agent Network (TAN), P2P Cash enables businesses and consumers to send and receive mobile payments securely, conveniently and cost-effectively.”
Where does such an ambitious goal come from?
Tom: “we initially wanted to solve the music industry peer-to-peer file sharing problem, from both a security and a payment perspective. We came up with a synthetic form of online cash that could tracked between any two people without being managed by a server; in other words, we invented a form of “Electronic Cash” or eCash. Despite years of negotiating with Hollywood content owners, we lost out to a much larger company who presented a closed server-based system. That company was Apple and the product was iTunes.
Instead of folding our tent, we sought out another market where we could leverage our intellectual property: the international remittance or money transfer industry. Here was an extremely fragmented $500 Billion industry that could greatly benefit from a secure, universal peer-to-peer transaction solution. Economics 101 tells us that this is exactly the type of industry in which the banks could gain economies of scale and create tremendous value by consolidation around open industry standards and a common technology platform.
With the widespread adoption of the mobile phone, especially in the developing world, we saw an opportunity to leverage our technology and significantly lower the cost of money transfer. This approach puts more money into the pockets of those who needed it most: the immigrant worker and their families back home. This also struck us as a much nobler use of our technology to bring inexpensive banking services to upwards of 3 billion people rather than simply making music easier to share.”
Sounds great – but it looks to me as one of the many initiatives in the m-payments space. What are you doing different?”
Tom: “Indeed, we found two hurdles to unifying money transfers around a universal technological standard.
In every developing country, you can find hundreds of software engineers in their apartments working on mobile “Wallets.” In other words, there are too many competing mWallet solutions in the marketplace. More critically, the telecom carriers are getting mobile phones into the hands of just about everyone in just about every country, but established financial institutions are not current with new banking technology and are therefore, unable to capitalize on this dynamic new business channel.
So we shifted our business model again. Instead of competing with the various mWallets with our own mobile wallet, P2P provides the clearing and settlement BETWEEN all the various proprietary mWallets. Leveraging our peer-to-peer technology we became the central hub linking the many banks and THEIR proprietary mobile wallets to the trusted payment delivery agents to solve the looming inter-wallet communication nightmare ahead of time.”
What have you got to show me?
Tom: “This approach is getting traction, with projects in process in Africa, Asia and the Caribbean.
Through contacts in Africa, P2P was fortunate to find Morris Mwanga who was completing his Computer Science Master’s Degree in the US after spending three years building out the most widely used clearing and settlement system in Kenya. P2P leveraged Morris’ expertise to build a world-class clearing system that is capable of 100,000 transactions per second.
We have since added a universal mobile wallet that enables ANY retailer to set themselves up as an ATM location for cash delivery in almost any country without significant capital investment. We designed the architecture to be flexible and it turns out to be a perfect means to route any mobile payment using the new ISO 20022 standard promoted by SWIFT and their SWIFTRemit program.”
You said something intriguing earlier on, about established financial institutions not innovating enough with new banking technology. What can you bring to the table to help?
Tom: “we can combine our third-generation software design and mobile processing expertise with the reach of the SWIFT to over 10,000 of the world’s largest financial institutions. This a perfect marriage of technology and standards from which every financial institution can benefit.”
Your key message?
Tom: “Billions of individuals in developed and developing markets will greatly benefit from significantly lower money transfer costs and access to new financial services that mobile technology platforms can offer. Financial institutions can see this as an opportunity to access a far wider customer audience with the ability to sell a broad range of new targeted products and services perfect for this new market. I hope P2P Cash can help in this endeavour.”
Good luck to P2P Cash!