COVID-19 has massively accelerated the growth of e-commerce. What do innovation opportunities in Payments look like in post-COVID world? Highline Beta has put together Crisis Manifesto: Innovation Opportunities in Payments post-COVID report. Today, we talk with Ashish Gadnis, Co-Founder and CEO of BanQu, about agility, supply chain visibility and making a difference. BanQu is a software company leveraging non-cryptocurrency blockchain technology to help unbanked populations in developing countries build financial identities, and was among the startups in the 100+ Sustainability Accelerator program we launched with AB InBev. Highline Beta has also joined as an investor, supporting BanQu in achieving its mission.
1. What are your thoughts on the changes and trends you are seeing in payments?
The biggest change if you look at the past few months of the pandemic is that cash is less relevant. Particularly in emerging markets where there is a high density of people, mobile money will become more and more important. People in our supply chains – like farmers and recyclers – are moving toward mobile money payment mechanisms and this will now speed up. People can receive local cash on their mobile phones, via local telecom/mobile money networks – all safely and securely from a distance. While access to cash in marginalized populations is important, just as important is the personal security/safety mobile money provides by not having to carry physical cash.
2. What specific gaps, blind spots and opportunities has COVID-19 exposed? What existing trends have been accelerating and why?
COVID-19 really exposed the importance of supply chain visibility in payments. What BanQu helps you do is lets you know in emergencies, or otherwise, that your funding is going where it’s supposed to go. That’s why the Islamic Development Bank (IsDB) chose us to collaborate with them on their Covid-19 relief efforts. They wanted to deploy capital in 25+ countries and trace those payments to the actual emergency relief products and services being procured/delivered.
Right now, in emergencies, there’s often no traceability or transparency of funds or products/services. For instance, when an earthquake happens and you want to send medical supplies to help out, agencies often don’t really know if the shipment was received. We’re working with IsDB in Mali and Senegal (among other countries) on improving this for the shipment of physical goods like PPE equipment, gloves, masks and gowns to clinics. We use the same blockchain technology we’ve been using to trace goods with AB InBev and to monitor child labor with JTI to ensure every clinic can order and receive supplies and their supply chain data is captured at every step along the way.
People want to know that their intervention is actually making a difference. Through our technology, we can ensure that funding goes where it’s intended. Demand for this is accelerating now. Before March, we were operating in 16 countries. Now through this partnership we’re live in 40 countries.
3. Startup collaborations with large companies (and with each other): What role will creative collaborations play in shaping the future of payments and finance on the other side of the pandemic? What kind of world can we be building now?
Startups are recognising that we don’t have all of the solutions. We need to collaborate in order to create the most impact in the least amount of time. In Colombia, we partnered with the recycling solutions company Nomo Waste to trace the recycling of Bavaria glass bottles and ensure recycling gatherers were being paid market pricing. Bavaria wanted to confirm its millions of bottles were traceable and that waste gatherers were fairly compensated.
We became the software that provided traceability through the last-mile and first-mile of this supply chain. I think this was a great example of the power of collaboration: by bringing together two startups with a large beer brand we were able to bring fairer wages to workers and help build a greener planet, deploying the solution in less than 2 weeks.
What do innovation opportunities in Payments look like in post-COVID world?
Highline Beta took a deep dive into payments innovation opportunities and trends, and released Crisis Manifesto: How Payments Will Evolve post-COVID report that examines massive consumer behavior shifts and features industry research and lessons from over 70 startup and corporate stakeholders.
4. What are you seeing when it comes to verticalization, and how do you think this will impact the state of payments in 2020 and beyond?
In terms of verticalization, we’re seeing that banks in emerging markets need to change and rethink their approach in order to retain and/or grow their markets. If you have a mobile phone and mobile money, going to a physical bank becomes completely unnecessary. Farmers and brands we work with no longer need to go to an ATM, visit their bank branch, or require physical currency. Instead, their telco provider or mobile payments infrastructure is vertically integrated and allows them to sell grains, for instance, and receive payment via SMS.
This is increasingly important when trying to ensure social distancing through COVID-19. No one wants to stand in line to receive cash for their crops. Payments are completely changing and the fact that the Islamic Development Bank was able to deploy their capital across 25+ member countries without any of us leaving our homes is a testament to what’s becoming the “new normal”.
5. What do you think the medium- and long-term impact will be for the rest of 2020, and how should companies large and small prepare for the road ahead?
For every company, the biggest lesson is to make sure you have a good handle on your supply chain. You need to find a way to deliver value that matters to your customers and vendors, in a very nimble way. SMS is extremely nimble. If you are a truly global company you better safeguard your value chain. You need to ask – can you operate quickly in an environment where your traditional methods are inefficient, ineffective, or don’t work?
I’ve been at home for the past 2 months, after being on the road almost constantly, but we built a model that can be deployed remotely and scale for impact and revenue. We’d have a very difficult time if we didn’t have that infrastructure. So companies also need to think: How do you survive in conditions that are going to be extremely unpredictable? Only the paranoid will thrive.
BanQu was always for purpose, for profit company and we have proven that a purpose-driven business/profit model, for us, is the way to go. At the end of the day, we believe that if you’re not driven by purpose you shouldn’t be in business. In 2016, when we were starting to build this idea to create a better and more equal world, people challenged us; and this pandemic has reinforced our belief in our approach and we’ve been able to demonstrate that this model works.
The future of successful companies will rely on a willingness to embrace strategic alliances, listen to new consumer needs and act decisively in uncertain times. Please read the full Crisis Manifesto: Innovation Opportunities in Payments post-COVID report here.