1. Who are you?
I am Jonathan Prince, co-founder with Raoul Mulheims, Georges Berscheid and Mike Sergonne, of Digicash Payments SA which provides a digital payments platform and apps designed for banks & PSPs.
2. Which services do you sell?
Our company provides a white-labelled digital payment authorisation platform and App, fitting neatly into banks’ and PSPs’ infrastructures, using existing underlying payment channels (transfers, cards …) and smartly integrated with retailers’ POS and e-commerce systems. Our product is fully user experience focused, effectively integrating value-added services, for both proximity and remote payments. A customisable multi-technology device (the “Digicash Beacon”) for payment acceptance at the POS can be provided on top, as well as a nifty payment terminal integration and a full set of APIs/SDK for banks and merchants.
Thus, we deliver premium technology to bring payment businesses to the next level and enhance existing infrastructures, to create new ecosystems and seamlessly integrate custom banking, marketing or retail-centric features and products. Our platform has already been implemented by 4 banks and is live since 2012, making it available to more than 85% of Luxembourg banks’ customers. It serves as the backbone of the Luxembourg banks’ m-payment ecosystem, one of the most advanced and successful full digital payment schemes in the world, with more than 10% of the total population having downloaded the App.
Digicash Payments holds a full EU Payment Institution license and is based in Luxembourg, a Top 10 global financial center and payments innovation hotspot.
3. Who are your competitors?
On one hand, we face other bank-centric mobile payment initiatives. Typically, these players are either funded or under the control of issuing banks and have a national coverage. In most cases, they are not technology or product specialists, and this is why we consider them more as potential clients for our product/technology offer.
On the other hand, considering incumbent technology providers, only very few companies have the knowledge to build these kinds of tools, combining a user-centric approach and banking-grade security, offering very high levels of convenience and optimised multi-context workflows and features. So, beyond being competitors in some contexts, these companies are prospects and potential partners as well.
4. How did you get your start-up idea and how did you finance your start-up?
Digicash solution started from a 2010 research and development initiative with the help of Luxembourg’s government. Initially, the Digicash platform and the first generation of products were developed by one of the companies established by the founders, Mpulse, a mobile micropayment and mobile marketing company. Mpulse is a pioneer of mobile payments in Luxembourg with a 90% market share. The company itself is a spin-off of the first company founded by two of Digicash’s shareholders, Nvision, a digital & brand agency.
We have therefore a track record of building successful companies and more than 15 years of experience in the payment and digital industries. Digicash was born out of our extensive experience with mobile micropayments and the conviction that the wearability, efficiency and evolutive technology of smartphones had a strong disruptive potential in the payments area. We also believe that instead of bypassing the banks, technology providers should partner with them as banks are better suited to impose an industry standard, or at least standard features, to the market as they have done so in the past with other payment solutions such as credit cards. Finally, we consider that it is in the best interest of the banks to partner with technological companies which will ultimately become innovation providers.
5. What were the biggest challenges in starting?
Funding and regulatory were two main issues for us. In fact, to operate its activities in the financial sector, our company needed to obtain a full EU payment institution license. This took several months and the amount and level of quality of requirements and documents to produce is quite high to reach. Fortunately, Luxembourg is one of the best places in the world to start a payment business and obtain an EU license: the regulator CSSF has a huge experience in dealing with payment business and there are many advisors and consultants specialising in regulatory matters that are able to help out in this area. This are the reasons why international players like Paypal and Amazon Payments have chosen Luxembourg as their European hub for their licence and their payments businesses. Regarding our funding, the Digicash solution started from a 2010 R&D project with the help of the Luxembourg Government. Our company is fully owned by us and backed by the State investment bank (SNCI).
Another huge challenge for us was the partnerships with Financial Institutions. Banks are rarely in contact with small players and mainly deal with bigger partners. So, we had to work hard to adapt to their way of working and processes and to earn the trust of all four of Luxembourg’s major banks. Today, our entrepreneurial approach is the key driver of a joint and shared innovation effort between retail banks in the country.
This is a successful first business case we can rely on to address now new European markets and players.
6. What areas within FinTech do you personally find most interesting and why?
We believe that mobile payment is the perfect ground to offer enhanced and enriched services and products, both in marketing and core banking areas. In fact, our solution provides a lot of opportunities, through a great number of product evolutions and many possibilities of integration: P2P, cross-selling, new features like personal finance management and forecasting, integration and interaction with retailers’ loyalty systems), integration with core-banking products and roles such as consumer credit, new generation lending products, integration with other payment channels and tools …
All these areas are really exciting and a lot can be done. We’ll go beyond payments for sure, it is the very nature of this kind of fully digital product and a key ingredient of both our strategy and platforms.
7. What opportunities do you see for FinTech start-ups in the DACH region, and how can we help to accelerate it?
First of all, there is a huge opportunity in the DACH region, specifically in payments, as cash usage is still rather high and especially in Germany.
Besides, banks have to get actively involved to seize the full FinTech opportunity. They can facilitate and drive the evolution, as seen on the Luxembourg market.
How to help? It seems important to continue to liaise, raise awareness and provide the context for discussions in order to exchange ideas and boost the introduction of new players, as doing already. Potentially, it would be interesting to further involve banks, which are benefiting from FinTech innovations, in this process.
8. What tip would you like to give FinTech entrepreneurs in the region?
While many other initiatives are emerging across Europe, Digicash is unanimously accepted by the Luxembourg retail banks. From this interesting showcase led at a national scale, we can share with you 10 key learnings that contributed to its success.
1) Use the “existing” (payment platforms, channels…)
2) Work closely with merchants
3) Make an efficient segmentation by industry
4) Align your agenda with banks or financial institutions
5) New player with an entrepreneurial approach can be the key driver of a joint and shared innovation effort between retail banks
6) Choose technology neutrality of payment triggers and connectors
7) At all cost, stay user centric
8) Keep interoperability in sight
9) Go beyond mobile payment
10) Take full advantage of regulation and regulators, public and incumbent players’ contributions and assistance. It helps to operate out of a highly developed and efficient financial center and FinTech hotspot.