Friday, September 18, 2015

Smart Payments: Satispay, raised €3M in Venture Funding from Existing Investors

Milan, 18 Septermber 2015 - Satispay, the italian answer to Apple Pay, is a young company specialized in the field of mobile e-payments,  that continues to increase its investments. Co-founded in 2013 by Alberto DalmassoDario Brignone and Samuel Pinta, and active on the market since early this year, Satispay has managed to attract major investments in a short time not only from Italy, but also from the UK, Germany, and the Silicon Valley.  After having raised €400k in June 2013 from friends and relatives of the three foundes, as well as further €5.1M in September 2014, subscribed by institutional investors, including Iccrea Bankthe company announced today that it has received a further €3M investment, bringing the overall investment to a total of €8.5M

The market entry, the first positive results and the strong interest shown in the service from large international merchants convinced both the first investors, who have exercised their pre-emptive rights to subscribe for this new capital increase, as well as new partners interested in financing the project on the basis of the extremely clear and innovative vision and the great growth potential that characterize it. Indeed, successful entrepreneurs and managers like Jonathan Weiner and Ray Iglesias (founders of the project Google Wallet and Money2020), Nicola Carbonari (founder of Autoscout24), Giuseppe Donagemma (Vice President Networks of Samsung Electronics), and Iccrea Bank, signed both capital increases. The latter, i.e. the Central Institute of Cooperative Credit, provides the payment service using the Satispay technology platform serving, more than 6 million customers in Italy. Iccrea is also a center with strong technological expertise and know-how on electronic payments, which saw in the project Satispay an investment in innovation with high potential.

The goal is ambitious: to become within five years
European leaders in the management of "Mobile"e-payments, with 10-15 million users. It should be acknowledged to the three young founders of Satispay to have invented a digital novel cash system that offers an effective and easy alternative to using cash, in the direction of a cultural change of consumers in favor of electronic transactions. It all started about three years ago, when Alberto Dalmasso, then 28 year old active in the financial field, and Dario Brignone, 30 year-old software developer working in Kazakhstan for AGIP, an Italian oil retailer, decided to develop a system to make RID (the national direct debit services) and transfers via smartphone app. The idea stemmed from a real and personal need of Dalmasso. It was tired of seeing him often being refused credit cards and debit cards for the payment of small sums. While students, they were aware of the difficulty of sharing expenses among people paying then in cash. Indeed, this is precisely the core of the Satispay app:
offer people an e-payment solution useful especially in more frequent transactions, small amounts and exchange of money between individuals, i.e. all those small operations for which today there is no alternative to cash. With the advantage of being able to obtain backing from any of the Italian and European banking system, thus exceeding the limit of other already existing similar applications, usually developed by the banks themselves, but valid only within a single banking institution.

While in the US Tim Cook preaches the word Apple Pay, Italy responds in its own way with a bold system of money exchange but whose ambitions look immediately to the whole European market. The strength of the project lies in its utility: small money exchanges without having to own cash in your pockets, small"virtual" loans among friends, small transactions in shops and store. The whole discarding the need of cash to promote the convenience of the use of an application.

The freeness of small transactions is what can foster growth in small niches, small "bubbles" of friends who could make use of it, thus anticipating the eventual success on a large scale. And the key is necessarily in this passage: only making Satispay a virtual wallet in the hands of millions of users you can aspire to something big. All of this while operating in a market where the giants have many weapons to be played: PayPal is known, Square and the like are the new frontier, Apple Pay is the chimera that will come from overseas. Within Italy the main and fiercest rival is Jiffy, an application developed by SIA - the Italian payments processor and systems developer - and which is currently available to account holders of the most important Italian banks, including BNL, Cariparma, Carispezia, Friuladria, Carige Group, Hello bank!, Intesa Sanpaolo, UBI Banca, UniCredit, Widiba, Banca Mediolanum, Banca Popolare di Milano, Banca Popolare di Sondrio, Banca Popolare di Vicenza, Che Banca!, Poste Italiane and Monte dei Paschi di Siena.

The Satispay App
By downloading the Satispay app, which is free, you only has to register and enter your data such as personal ID-numer, tax numer, a picture for the sake of user identification. Last but not least, the IBAN number to force actually your bank to authorize transactions from the account to the e-wallet of the Satispay solution.  SEPA mandate is the technical term. Then every movement of money is charged for Satispay, no costs are borne by the user which only has to decide the amount to load on the app, as if it were a prepaid card. You can transferm money to your friends registered to the platform, with a system and a graphic that differ little from WhatsApp, or use them to pay in participating stores, which are currently 650 in the whole peninsula, including TotalErg points. Transactions are completely safe as no sensitive or personal data are shared, even in the case of payments on e-commerce or physical stores. In addition, users will have to enter a personal PIN in order to complete the transaction. Furthermore, to protect users, Satispay introduced precise limits of use: the threshold of weekly budget limit is 200 Euros, the transaction limit is 1000 Euros, while the daily and monthly transacted limit is 1500 Euros.

The new app looks competitive on prices: totally free for consumers, requires business owners a fixed fee of 0.20 eurocents only when the cashed amount exceeds 10 euro, with no monthly fees or activation costs. Satispay is able to cut costs because it eliminates many intermediate steps, and therefore intermediary operators, today required by banks to make such transactions. Satispay manages internally operations thus greatly reducing costs. Under these conditions, the business plan foresees the break-even at around 400 thousand users, estimating that each performs operations above 10 euro twice a week.

The european expansion

With the injection of the new capital the startup, which currently has convinced 8,000 users active with more transfers (total downloads amount to 24,000), looks to Europe: as of March 2016 the company will start from the UK the expansion in the Old Continent. In the pipeline there is also activation of a button to pay online, in October, and in November, a new version of the app allowing to make donations or buy concert tickets is expected. 

According to data from the Observatory on Mobile payment&commerce of the Polytechnic of Milan, digital payments in Italy in 2014 grew by 3.6%, but while traditional payments by credit card advance of 1.6%, the so-called "new digital payment", including eCommerce, ePayment, Mobile Payment&Commerce at a distance and in close proximity, mobile POS and Contactless Payment, instead grew by 20%.

The Satispay app is available for iOS, Android and Windows Phone and counts to date already thousands of users, hundreds of commercial agreements and the company recently announced a partnership agreement with TotalErg, which foresees the possibility for motorists to pay fuel and other services with their smartphones in 30 gas tations in the area of ​​Milan and a few stations in the areas of Rome, Florence and Cuneo, with the aim of extending the service throughout Italy.

The goal is to reach 50,000 users by the end of 2015 and 10-15 million within five years. "Our challenge is above all cultural - says Dalmasso -. Convincing people, beginning precisely from small daily operations, that electronic payment is more convenient, simple and secure than cash. A cultural change needed in view of a future in which digital payments will be more frequent and necessary.