Billon says goodbye to banks
Billon is an app for everyone who is tired of bank transfer procedures and their limitations. It also simplifies the whole thing and works autonomously as a real workaround, which makes it truly different from the existing solutions which are functioning in close relation with the banking system. Billon is all about freedom, simplicity and individual needs of its users
Most of the cash flow is regulated by banks – they are in control of our transfers and our cash supply. Billon addresses this issue as Bitcoin did, however, the latter is rather controversial and digital currencies are still far from being trusted and widely accepted. What is your approach?
Robert Kałuża, Co-founder: With all the benefits of Bitcoin, it is still unregulated therefore not yet recognized officially as a financial product. We therefore resolve this issue – digital cash in our application is issued in national currency and signed by banks – just like paper cash. Billon works with and for the banks, and it meets the most recent regulations made by Polish FSA, as well as European eMoney Directive (which dates back to 2009).
What does Billon app look like in practice? Could you please describe, step by step, what do you need to do in order to start using it? Let's say we have $10 in a pocket and we grab a mobile phone... what's next? How long would it take to start spending the first cents? Does it involve a lot of paperwork and procedures?
Andrzej Horoszczak: When we designed Billon, we had one objective: making electronic money simple. Providing it as an easy and cool experience for anyone, in every aspect. - says Andrzej Horoszczak, founder & CEO of Billon. In short, Billon is an app that transfers money without costs or intermediaries. Transferring money into the app is simple. You can go to a nearby shop or kiosk and exchange paper cash for digital cash stored on a mobile device. In Poland, we already have almost 20 000 shops that provide this service and the number increases on a daily basis. The process is quick: being a Billon user, you show a bar code, generated in the app, to the cashier and hand over the amount of money you wish to digitalize. The cashier scans the code and thus sends you digital money. The process can take, depending on the shop infrastructure, from 2 minutes to 1 working day but majority of the shops do it nearly real-time (such as Real, Intermarche, Carrefour). You can also make a bank transfer (using online or mobile banking or even at the post office) to put money into the Billon app. Every Billon user gets a dedicated (individualized) mass-payment account that’s always visible in the app. Whenever a user makes such bank transfer, the issuing bank sends the user electronic money.
But you don’t have to digitalize cash to start using (or paying with) electronic money. We work with corporations who pay salaries to their temporary employees via Billon app. Employees provide the employer with their Billon user names and get salary instantly or collect it with one click on the employer’s website.
Cashing out is equally simple. You can withdraw electronic money as paper cash at an ATM without a card or a bank account. It’s enough to provide a couple of codes and a chosen amount of money is instantly paid out at the ATM. We support all ATM machines (hardware) and we are launching ATM payouts with over 50 percent of available ATMs in Poland. Cashing out is possible also with any other Billon user – you can give digital money to a friend and receive paper money in return. So each Billon user becomes a walking ATM. This functionality is being implemented with some retail partners – we call it cash-back. It’s great for shops, as it allows merchants to get more foot-traffic, lower cash at hand and make a small profit on the exchange. You can also cash out to a bank account. You type a bank account number in the app and your money gets transferred. This is a great service for e.g. families who only have one bank account but multiple family members.
Do you, at Billon, aim for some particular target? Who is your app designed for? Do you offer different products to different customers?
Everybody can use Billon since the only requirement is to have a device (e.g. a smartphone, a tablet, a PC or a server) with our app installed. However, we focus on specific segments, as we see great business opportunities there.
We have six fully-designed product lines but at this stage of implementation we focus on the following:
The first product line, Billon Salary Services, simplifies the processes and reduces costs associated with paying out salaries to ad-hoc or temporary employees or contractors. There are over 3 million such workers in Poland– from online respondents at consumer research agencies to cashiers in supermarkets who help during rush hours. These people either don’t have a bank account number, or don’t agree to provide one – they want an instant and simple transaction. And this is what we do – every employee gets their pay transferred to their app and can withdraw at the nearest ATM.
Our solution offers two interconnected and critical benefits for the employers. Firstly, we simplify processes for the employers as we eliminate all hassle and complexity. Distributing small amounts of cash (and not quasi-cash solutions like shopping vouchers) to multiple locations is easier as there are no returns, like it happens with postal transfers or PayPal, that could generate five-fold back-office processes. Secondly, costs of salary pay-out are significantly reduced.
Our second product line, Billon Micro-Merchant services, enables small online merchants, shops or individuals to collect money from customers or donators. It requires no paperwork – anybody can start accepting electronic money right after downloading the app. If you make significant revenues and want to increase, the initially required by law, turnover limit, you can go through a simple online process to provide some business details. This is especially convenient for the fastest growing merchant category – streamers, youtubers, bloggers, video-bloggers, small e-shops. We give them a tailored solution to collect micro payments (or donations) through their own website, a Facebook page, a third party website or even via email.
Our third product line is Billon Loans. These loans are distributed as electronic money in the Billon app and don’t require a bank account. They are cheaper for the consumers and are more profitable for lending partners.
As you can see our aim is bigger – we want to enable the unbanked people who have no current accounts, to use financial services just like everybody else. Worldwide, there are over 2 billion people excluded from using financial products, 65% in Latin America and as much as 67% in the Middle East.
Regular banking services are too expensive for poor societies. Thanks to Billon, the banks will be able to offer these services significantly cheaper (as mentioned, Billon enables 90% cost cut compared to standard banking services. User - none). Implementation in these developing markets (NDA)is planned in cooperation with a global bank. Winning the Citi Mobile Challenge 2015 (Citibank searched worldwide for businesses that can change or improve usage of banking services and products. Billon successfully competed with over 740 other companies) competition made it easier for us to talk to global banking partners. We provide technology that serves as a link between the underbanked people and the banks, who want to reach this yet unpenetrated market of unbanked customers, and offer e.g. microloans which both sides will benefit from, as they create opportunities for small entrepreneurships and stimulate the market.
Problem of unbanked societies, is not relevant only to less advanced economies. During the last 10 years, in the USA, the number of unbanked adults grew by 20 million due to increasing costs of owning bank accounts. Also underage people are excluded from making online purchases, as it is still difficult for them to open current accounts. And these youngsters are also the main target for game distributors, who now prefer selling in-game DLCs (downloadable content) and expansion packs (digitally) over traditional box versions. And Billon is on the right track to make it easier and more profitable for everybody.
What is a difference between Billon and other forms of digital money, just to mention Bitcoin? And how about other e-payment systems such as PayPal or Paymentwall? Why should anyone be interested in Billon?
Robert Kałuża: As for the companies who operate payments in cryptocurrencies, we believe their products are well-developed but they are still a bit inconvenient for technologically non-advanced users. Moreover, legal cryptocurrency regulations are vague and foreign exchange risk is high. Electronic money on the other hand is fully regulated (already since 2009 in EU). Billon is also more secure, as it works with national currencies only, issued by regulated banking partners.
Existing incumbents e.g. PayPal, are nothing like Billon. They don’t smooth out payment processes, they just add more layers and costs, sometimes adjusting them to new devices. A user is still required to have a bank account or a credit card to make purchases and initially has to go through a long process of authorization. Moreover, settlements are delayed just like regular bank transfers are, and a buyer can cancel transaction even if they received a service or a product. Each transaction has a high cost for the merchant (in case of PayPal i.e. $ 0.30 fixed fee + high percentage value of the transaction) which makes a lot of transactions inviable.
We see these players as layers of grease – one has to be a bank customer first and only then one can use these systems. Sometimes we hear arguments on their data security, or rather their lack of it. Not long ago the CEO of PayPal twitted about his own payment instrument being taken over by hackers. Their technology is focused on protecting access to critical data, not the data itself. Whoever overtakes that access, gains full access to all confidential information – it is nearly always saved as plain-text. And these incumbents share data with up to 15 different intermediaries to make a single transfer, who just add more risk of data breaches.
Billon designed a secure financial and commercial platform for the future. Both communication and data is encrypted. No data or password are stored on a server (as there are no servers at all!). Any data transfer happens only between a buyer and a seller. There are no intermediaries processing the transaction that could be breached.
We are delighted with the growing fan base among experts: bankers and technology geeks. But what brings us the biggest joy is that a regular user understands benefits quickly, just like they understand the benefits of cash over storing money in a bank account that can be blocked.
And how does it translate to the end-user experience? People value simplicity, safety and privacy nowadays. Is Billon flexible enough to provide those features and allow some extra ones?
Andrzej Horoszczak: When we started creating Billon, we spent a lot of effort to enable everyone to use financial products without the hassle and barriers currently presented by banks as a result of outdated banking technology. In a nutshell, we wanted to invent a simple solution for the unbanked and the underbanked people so that they can use banking services freely and easily. Our benchmark was paper cash – you just need to have a wallet or a pocket to carry it around. Without signing up, going somewhere or filling in an online questionnaire. Therefore, our “get Billon” process has just two steps: downloading the app on a device of your choice (currently we support mobile devices with Android, PCs with Windows and Linux and all server types) and creating your user name and password. And this is it. You can use banking services right away, without waiting for document processing or any other back-office procedures.
When it comes to spending the money – this is the easiest part. Our solution provides users with safety and comfort. You can pay with digital money on a peer to peer basis just like you would with traditional cash. Or remotely, making one-click purchases in shops and on the internet without redirects and forwards from the merchant’s website. The ease of making real micropayments (at values under 0,01 PLN/USD) is possible as well. And we also make it entertaining. You can transfer money to any other user by bumping two mobile devices which will automatically identify users and request an amount.
We also improved shopping experience for both merchants and their customers. First of all, we make it possible for any information of your choice (e.g. invoice and delivery data) to be transferred with the money in one step. Secondly, there are no intermediaries (3rd party agents) in the transaction – you and the recipient are the only ones who know that it happened. This is great when you think about security and privacy of your personal data. We make sure that nobody stores or processes your data – even us!
Once we realized that our approach can be used in so many ways to drive commerce, we came up with more fun and useful ideas on how to enable trade. We have now implemented abilities for merchants to sell directly via e-mail, on Facebook, other social networks or even from ad-banners. And because people out there might need other functionalities, we opened our API (technology integration) to everybody, making API an open book for anyone to build upon it.
Speaking of the competition: Billon has already achieved big success in Israel. Did it change your perspective and affect your business model?
Andrzej Horoszczak :. This Year we won the Citi Mobile Challenge. It is a great honor for us, as well as an opportunity to be among the winning teams. As a result, we launched an intensive collaboration with Citi, and we hope to bring Billon to one of the developing markets together. Our approach to salary payouts, cardless ATM cash-outs, micro-lending and online payments can help banks reach the unbanked sector in various regions. In Israel we encountered a very entusiastic acclaim. People were asking us a lot of questions and many business opportunities appeared. Israel is very innovation-oriented country and we shared our ideas with them with great pleasure. It was inspiring and brought us to consideration of expanding globally. Our unique technology, strong management team and highly specialized IT engineers make us well-prepared for expanding Billon outside of Polish market.
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