One of the biggest hurdles of mobile payment adoption — besides breaking existing consumer habits — is the fact that there simply isn’t a consistency about where or how consumers can actually pay using their mobile devices.
Dinube is Europe’s latest digital payments network that says it has cracked that problem. Like many other mobile payment schemes, its technology enables consumers to ditch their cards and cash and pay in a physical store using their smartphone. But unlike most mobile payment options that restrict how consumers can pay, Dinube offers three ways to pay using that device: Contactless NFC, QR codes and a one-time token.
That implies that consumers aren’t dependent upon having a particular type of mobile phone to pay. All they need is a QR code or eight-digit one-time token that they can give the merchant if their handset does not enable NFC. And in the reverse scenario, for a merchant that accepts Dinube but doesn’t have the latest NFC tech, they can still accept those payments using the same mechanism.
“The challenge for everybody right now is there is no standard, uniform technology that works in every scenario,” Dinube founder and CEO Jonathan Hayes said in an interview with PYMNTS.
[pullquote] I think [for mobile payments] it’s going to be a digital land grab and right now there are a 1,000 horses out there and it’s anybody’s bet which one of them is going to finish the race.” [/pullquote]
Inside Dinube’s Digital Payment Network
As a stand-alone startup digital payments network the number of merchants that can accept Dinube’s technology is still pretty small – roughly 200-plus this month. But the Barcelona-based network officially launched a week ago, and Hayes claims that there are a number of large retailers he’s already in conversation with about expanding that number of merchants.
Hayes is an MIT grad who spent four years developing the concept, testing it in four countries and working with consumers and merchants to get a sense of what is on their “mobile payments” wish list.
One of those things is to be “interoperable” with some of the other big payment players’ mobile wallet options: Apple and Google.
So for consumes who want to use Apple Pay, Google Wallet or the soon-to-launch Android Pay, Dinube is equipped to allow those consumers to pay using those mobile options, but through its own payments network. That means for all the Apple Pay users who might join when it hits the U.K., they could choose to use it through Dinube when visiting a merchant that accepts the option.
“These are going to be, probably in the next few years, the two leading wallets,” Hayes contends, fully recognizing the importance as a payment network’s ability to enable whatever way consumers want to pay.
“We haven’t changed the consumer behavior at the point of sale at all. We’ve integrated fully into the existing path to purchase so the existing physical logic of that transactional flow when the consumer initiates the payment and confirms payment at the PIN pad,” he explained. “All of that is identical, so the learning curve for end users is very simple for them to understand and it comes bundled with a whole range of what we think are very exciting features, which are going to make consumers’ lives easier.”
While stats about Apple Pay show that paying with a phone isn’t a natural thought for consumers, Hayes said that concepts like the Oyster contactless payment card, which launched long before contactless was a widespread concept in the U.S., have helped make consumers in the U.K. quicker to adopt mobile payment options.
But beyond London, there’s not a lot of European regions that Hayes believes have managed to light the mobile payment fire. Everyone from startups to big tech companies are trying to ignite the market, but they still need consumers and merchants on board.
“In other countries, nobody really stands out at this point. I think it’s going to be a digital land grab and right now there are a 1,000 horses out there and it’s anybody’s bet which one of them is going to finish the race,” he said.
Why Dinube Thinks It’s Different
Of course, every new mobile wallet and digital payments network on the market claims to make consumers’ lives easier, but Dinube says that it has cracked that code. With the ability to pay in-store, pay online, have instantly digital receipts that are stored in a personal Dinube cloud, built-in-loyalty with personalized merchant rewards, budget management, and P2P payments, Hayes believes that it combines the best of both worlds of a mobile wallet and a payments network. Dinube also has in-app payments, online payments and plans to rollout a merchant app to accept payments at smaller retailers.
“The credit card legacy systems are expensive, so we’ve built an entirely new payment network that has effectively digitized the Euro,” Hayes said.
Dinube also has a feature that, at least so far, is missing from other mobile wallets: the ability to go anonymous. We’re not talking bitcoin-like anonymity where only the Feds can track consumers down, but the kind of privacy that enables users to pay in a cash-like manner. Consumers can use the privacy feature on the app to have an anonymous profile to protects all personal information from those merchants.
“What we’re actually building is a dashboard in the cloud where users will be able to see who has access to their information, how it can be used and then they can control who gets to see what information. Ultimately what that allows is with full consumer consent because Dinube never sells data – that’s not our business,” said Hayes, elaborating on how this provides for consumers to have a clear, transparent understanding of how their data is being managed.
“We recognize that cash is still king, particularly for some transactions. You may not want to tell the merchant who you are,” he added. “We also know that credit card companies sell data. …Our cash-like solution emulates cash to the extent possible.”
How Dinube Solves Two Problems At Once
After traveling around Europe, Hayes was tired of collecting paper receipts in multiple currencies. Expense sheets were cumbersome and inefficient. Soon after, he went to MIT, and that’s when he and a researcher came up with the concept of making payments using a cell phone.
That concept eventually led to the development of Dinube: the payments network that was simply born out of one entrepreneur attempting to solve a problem he recognized others had too. He looked at launching in the U.S., but once he discovered it took a different money license in each state to operate, he took the concept back to Europe. With just one money license in a European Union country, Dinube received instant access to providing its service in 34 countries.
Launching in Europe, Hayes emphasized, was much easier than launching in the U.S. for that sole reason. Perhaps that’s another page the U.S. might need to take out of Europe’s book if tech leaders have any chance of helping mobile payment options reach larger scale.
Looking across Spain and the U.K. specifically shows how digital payments networks and mobile payment schemes might have a leg up on any U.S. launch. With a higher smartphone penetration in those regions than typically seen across anywhere in the U.S. (ironically many of those are coming from Cupertino, Hayes points out), driving mobile payments in Europe doesn’t face as many hurdles in the U.S.
That’s not to say many payment solutions across Europe (and the U.S.) haven’t made valiant attempts to enter the market. Many of which came with some big backing and multimillion dollar budgets. Take for example three large operators behind ISIS (rebranded to Softcard) which we all know was eventually bought out by Google.
“What I’ve found interesting in the last four years is I’ve seen many mobile payment solutions come up and disappear. and we’re still here with a valid model,” Hayes said. “I think that what that tells us is there are some pretty smart people in the sector, there are some big budgets, they’re big players and it’s a very tough sector. I think the fact that we, as a small startup, are rolling out today with a successful model, I think is a result of many years of careful strategy planning and understanding the market, and meeting with consumers and meeting with merchants and solving real problems.”
“Model For The Future”
Its got four years of development, testing and research behind it, but Dinube is still very much in its infancy. But that doesn’t mean it doesn’t have big ambitions. Those ambitions involve eventually entering the U.S. market, of course.
But for now, Dinube has focused on building its reputation across 34 countries in Europe.
“Dinube puts customers in control of their data, giving them a secure, private and simplified purchasing solution from their smartphone – for free,” Hayes said. “We have built new payment rails so that, at last, traditional retail businesses have an alternative to the outrageous transaction fees they are charged for accepting legacy payment networks. Dinube’s model also promotes growth of a retailer’s top line, by helping them to curate the shopping experience with the most convenient, secure and personalized digital payment solution on the market.”
It’s already lining up the next round of big retailers to rollout Dinube to, and its got the technology to integrate other mobile payment wallets as they hit the market. With talks already in play with big banks that Hayes said are excited about how Dinube can help innovate the services those banks offer their customers, he’s confident in the next stage for the digital payments network.
“We didn’t arrive yesterday. We’ve been working on it for four years and we’ve got solid research in four countries,” Hayes said. “We’re fairly confident that the model we built is a model for the future.”