“The future is governed by large corporates that are looking to innovate with digital experiences”
The Grid: How can fintech businesses, particularly in the payment space, engage better with large corporates in a way that is mutually beneficial?
Moussa Beidas: Bank led initiatives haven’t worked so well. We believe the future is governed by large corporates that are looking to innovate with digital experiences. Take Starbucks, for example. It has a mobile wallet solution that allows customers to pre order beverages, avoid queues and earn rewards in the US. Starbucks can do this because they own the entire customer experience and can leverage how to utilize it.
And because they see the value, customers are doing what is counter intuitive in many ways, i.e. pre loading money rather than paying afterwards like they may have done for decades before.
We believe in our region that a lot of large corporates and even system integrators or middlemen are poised to have a similarly profound impact in the next five years in defining how the related landscape emerges. As they say, “Data is the new oil” and we are heavily invested in making sure that the white-labeled product we provide is targeted to large corporates so that they get data and can use it to optimize their offering.
An Apple or a Google cannot provide this service because they want to build their own brand. And often the product is challenged. For example, tap-to-pay has been used in London for over a decade. Apple came in and offered the same service but instead of using a card, you use your phone to tap-to-pay. This is not enough to convince people to change their habits. There are rare cases where a third party wallet solution has worked and that is in India and China with significant government intervention. That won’t happen so easily here or in Western economies.
The Grid: Give an example of how you could benefit a large corporate in the region through a white labeled solution then.
Moussa Beidas: Take a large real estate company like Emaar, for instance. It manages the customer experience from end-to-end and owns it. We could have self-check out counters or tailored offers around previous purchases that customers have made in Emaar communities through a mobile solution. Corporates could even use the data collected and sell it to its merchants so that they can understand their client bases better and improve service and/or product offerings.
The Grid: Are there no other companies doing this?
Moussa Beidas: Beam is trying to do this by itself but it is not their core strength. It is focused on loyalty first and payment solutions secondary. A white labeled solution, powered by a company that specializes in the space, is better. It goes back to focusing on a core business to succeed and not trying to diversify too quickly. Large organizations can see our value as their external R&D arm and the go-to people for their own personalized and distinct payment solutions.
The end result is that a big corporate client of ours would own the solution and all the data and information that goes through it via a licensing model. We are offering software as a service to large corporates (SAAS).
Moussa Beidas, co-founder Bridg, holding the mic at Venture Cafe Talks at The Cribb
The Grid: How is this different from Bridg’s SME business vertical?
Moussa Beidas: The hardest things about setting up a new business in the UAE are incorporation and banking services. A lot of companies starting out, or growing really fast, struggle to get card machines. Bridg becomes a lifeline to the people who run these businesses. They can get up and running the same day. SMEs are hungry and want to grow and are increasingly becoming our greatest advocates.
Take the Ripe Market stores for example that set up every weekend at the park. The vast majority doesn’t have card machines so they lose a lot of sales. Bridg did a product for DSF Market OTB, a similar concept at the Burj Park Downtown Dubai. One of Bridg’s merchants exhibited there. As a result, we got a call from the organizers and ended up onboarding around ten businesses (remember that we are just two people in house!) in minutes. Around US$10,000 more in the value of transactions was generated for those merchants. The cost to an SME merchant is a flat fee or percentage of the value per transaction.
The Grid: So when did you set up Bridg? How long has the Bridg journey been and where geographically do you see the business going?
Moussa Beidas: The company was incorporated two and a half years ago but only went live seven months ago. Since then we have completed AED 100,000 in transactions, have on boarded 50 merchants and been used by 700 underlying customers. Apart from the UAE, we are looking to penetrate Saudi and Egypt and then enter developing markets in Asia (Indonesia, Philippines and Myanmar). As we talked about on Monday at the Venture Café Talks at The Cribb, part of the patent pending technology unique to Bridg is the Bluetooth product. These countries (in Asia) have a high population of smart phone users with little to no data plan subscribers.
The Grid: What gave you the courage to take the step from thinking about an idea to actually executing it and setting up your business? The fintech space is highly fragmented and competitive, that must have been discouraging.
Moussa Beidas: We didn’t want to start something that is already done. We wanted to create something totally unique and tailored for developing markets. Hardware-reliant blue tooth payment solutions do exist but Bridg is purely software. You can do a lot more with blue tooth than Near-Field Communication (NFC) technology – it’s more flexible so you can add more to your offering such as hands-free payment. Bridg software has accuracy of up to 2cms. What this means is that the wrong person in a payment line or queue doesn’t end up getting charged for a transaction the person in front of him or her is completing.
The Grid: What are the challenges you faced, or continue to face, from a regulatory perspective?
Moussa Beidas: When Nadeem and I built the business we realized we would be operating with in a heavily regulated environment. Instead of trying to please everyone, we selected our strategic partners very carefully and addressed regulation through them. We knew that we would have to add value to other payment platforms too while conducting our business. So we went to gateways and processors and partnered with them to give them access to off line merchants through a revenue share model. This way, we avoid regulation and applying for licenses and any other security parameters from a technical standpoint.
The obstacle we face here in the UAE is the constantly changing face of regulation in the market, which is continuously trying to keep up with the pace of development in the economy. This can stifle innovation. We are consistently trying to figure out where Bridg fits with in the regulatory ecosystem. Having said that, we have built a good relationship with the MoF, which awarded Bridg with The Investors Award at the end of last year. It is a constant struggle, recognizing the contrasting importance of innovation verses mitigating risk and reducing fraud in any given economy. These two domains seldom meet and will always cause some friction.
This is an extract from an interview with Moussa Beidas, Co-founder, Bridg.
Bridg is a smartphone payment platform, designed by a UAE resident, is the only Arab creation to make the cut at The Next Web conference in Amsterdam.
Interview by Tasneem Mayet, Research Director, The Grid Media Ltd
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