FinTech is not just limited to payment methods, but those are still the most visible signs of it. The explosion of mobile payments is a good example of what’s driving disruption: simplifying everyday uses. This second afternoon at VivaTech is a good occasion to review the Orange Money experience in Africa and draw some lessons for the future.
Today’s uses have room for transformation
Whatever the established environment or system, the disruptive potential of FinTech is not in question. In some countries, mobile payments are starting to completely overtake the role of traditional bank payments, while others are seeing the alternatives to cash proliferate. Does this mark the death of paper money?
“If we look at Africa, cash is still king,” says Antoine Maurel, Investment Manager at Orange Digital Ventures (opens in a new window). “On the other hand, Orange Money (opens in a new window) is experiencing strong growth and we’re starting to see a real disruption.” And that is despite the relatively “low tech” nature of Orange Money compared to other FinTech – its main components being SMS and USSD.
It’s in this context, says Antoine, that the idea for Orange Money was born out of customers’ own innovation: in the absence of cash for shopping, individuals had become used to exchanging mobile airtime credits to replace it. “It was then a natural step for Orange to think about transferring money instead of airtime.”
No compromise between freedom and security
For Lionel Baraban, CEO of start-up Famoco (opens in a new window), a leader in Android-based cashless payment devices, the success of Orange Money can be summed up in one word: “simplicity”. Unlike opening a bank account, Orange customers just need a mobile phone to use it. “If you solve a problem with a solution that’s easy to use and fits naturally into your life, you’ve won.”
Today, Famoco makes Orange Money deployment in Africa even easier with its hardware and software solution that validates transactions for companies – which is a more complex process than validating peer-to-peer transactions between to mobile users.
“Our payment terminals are low cost, simple and reliable, enabling us to balance users’ needs such as flexibility and security,” Lionel continues, “We often here there’s a trade-off between freedom and security, but in this case it guarantees both!”
Accelerating together beyond payment
According to Lionel, what are the secrets for success beyond the need for simplicity? “We need intelligent solutions and strong market presence. That’s the advantage for Orange in Africa, and in China for Alibaba with Alipay, and Tencent.” Alliances between start-ups and large multinationals are a good way to combine these two elements. Antoine explains: “Orange is accelerating start-ups and the opposite is also true. Start-ups have a valuable concentration capability, and investment is a great way to strengthen ties.”
Unlike Africa and China, the European technological landscape is already heavily populated, with a multitude of payment methods, credit cards, NFC, online payments, peer-to-peer… in this context, it’s unlikely that a single technology that will disrupt the entire industry. The challenge for Antoine and Lionel is to meet customers’ expectations, to simplify their everyday lives and to find a winning formula to develop today’s technologies beyond payment – to include financial services, loans, customer service and more.