Mobino: A global digital payments system - Jean-François Groff
When Jean-François Groff helped develop the first web service in the 1990s, he thought the new technology would swiftly transform finance. Decades on, and amazed that only limited steps have been taken, he decided to take up the challenge himself by developing Mobino, a digital payment system. Today, he is a strong advocate for collaboration between companies like his and
banks worldwide to create a global digital payment ecosystem, accessible to all.
From CERN's offices in Geneva in the 1990s, Jean-François Groff and other early pioneers of the internet were almost complacent about the future financial uses of the web service they were creating because, to them, the possibilities were clear.
"When we built that open connectivity system for exchanging information more easily, we were pretty convinced that financial transactions would happen over the world wide web within the next five years," Groff says. "It was, for us, such an obvious thing that we didn't even bother taking special measures for it, we thought that the industry would jump on it, compete and consolidate, and that within ten years there would be a worldwide internet-based payment system."
Fast-forward to 2009 and such a network still didn't exist, at least not to the extent that Groff had imagined. Frustrated by online payment systems that required the entry of reams of personal information in order to complete a purchase, and a credit card system that charged consistently high transaction fees, Groff decided to take matters into his own hands by founding mobile payments company Mobino in his native Switzerland. His goal was to enable money to be as fluid in the digital world as it was in the physical world. Payments, whether peer-to-peer or customer-to-retailer, should be as direct as handing over a banknote, he felt.
He considered the way in which a cash payment is instant, effectively anonymous (because no personal details are shared from one party to the other) and direct, in that the payee receives the full value of the coins and notes handed over without any intermediary fees.
With this in mind, Groff studied the architecture of credit card systems and found that these simply weren't conducive to the kind of network he had in mind. Even as such processes have improved over the years, the security issues inherent in a system that relies on the encryption of personal details leaves them prey to criminals, and millions of card credentials are stolen from various targets around the world every week.
"If you give me your credit card because I am a hotel clerk, I should not be able to authorise a transaction after one glance," Groff says. "And yet that is still happening today. So companies add more and more security measures, but so what if I have to type your address? It's easy for me to find, it's easy for me to find your mother's maiden name. All these security measures are ineffective at scale.
"The nature of online technology is that you can copy information really fast, so, with credit card payments, the bad guys are always faster than you are."
As Groff worked on Mobino's solution over the next few years, the proliferation of smartphones and increasing use of mobile internet made the need for a simpler system even clearer as users faced the frustration of entering strings of information via a small mobile keypad.
In his new system, Groff wanted to solve two key issues. First, convenience: being able to pay with a couple of clicks and a few digits at most. And second, security, not by adding yet another security layer but by avoiding the need to share any sensitive information from the start.
Open for businesses
Six years later, and with a couple of versions tried, tested and redesigned, Mobino is now fully operational, and covering the full range of uses. Its reach is spreading across Switzerland, with 2,000 points of sale already up and running, from grocery stores and cafes, to public transport and online retailers. One of the aspects Groff and his team have worked to improve over the past couple of years is reducing the 'on-boarding' time, so that users can now make their first payment within minutes of signing up. Installed as an app on the user's phone, Mobino acts as a kind of digital wallet.
"When you open the app, you can see how much money you have and you can refill it with just two clicks." Groff says. "It is connected to your bank, so it's like going to the ATM, but the ATM is in your pocket."
In making a payment to a retailer, Mobino works by establishing a connection from the point of sale, to the user's Mobino account. For the customer, it is a case of payment in two clicks. For example, at a railway station ticket machine, the customer selects Mobino as a payment method, and then clicks 'approve' on their mobile phone when Mobino asks them if they want to pay. Behind the scenes, the process is a little more complicated, but essentially revolves around a token - a short, unique series of numbers - being shared from Mobino's server to the machine, and from the machine to the user's mobile phone.
Because this token on its own has no security or monetary value, and neither the phone nor the machine carries the personal details of the customer, if the phone is stolen or the machine hacked, the customer's details remain safe.
On your watch
On the retail side, Mobino works with existing points of sale (POS) as well as manufacturers to ensure it is as easy as possible to install the necessary plug-in. "We work in close collaboration with the manufacturers of equipment for payment machines." Groff says, "So for cash registers, tills, vending machines, parking systems, ticket machines, we have a way to plug them into Mobino in an extremely light fashion, and this is a key driver of adoption."
On the customer side, Mobino ensures it stays compatible with mobile-phone technology, and boasts such successes as being the first company worldwide - even ahead of Apple - to introduce instant payment by smartwatch, which it premiered at the Finovate London 2015 conference.
While Groff expected the lower transaction fees Mobino charges - 1%, instead of the 2-3% of many credit cards - to be the main attraction for its business customers, in fact he found that speed proved the payment method's most popular draw for retailers. For example, in the case of a restaurant bill split six ways, a waiter doesn't need to spend ten minutes processing each separate card payment; instead, payments can be made in seconds via Mobino, or a mixture of Mobino payments and peer-to-peer transfers. Mobino users can quickly and easily arrange digital payments from one account to another to pay their friends and associates.
Mobino works within the regulations of each country to comply with legislation, for example tracking payments, limiting the amount of money that can be stored on Mobino (in Switzerland, its 3,000CHF).
For transfers and payments abroad or from country to country, the app provides instant currency conversion. For Groff, this easy conversion of currency is essential to the future flexibility of money. Unlike some digital pioneers, he doesn't foresee a Bitcoin-style currency being adopted universally, because that would remove the individual from their intimate knowledge of their own currency, quite apart from the other associated economic concerns. Likewise, Groff doesn't see a need for Mobino to usurp credit and debit cards; he recognises the benefits of a simple plastic card that allows a user to tap onto a bus, for example, without
any connectivity required. But for the flexible payments and transfers he envisages worldwide, he is confident that Mobino's cash-like model does provide the best solution.
Bank on it
The idea of using the service between countries and currencies is central to Groff's other motivation: opening up access to finance by building a common digital platform for the free exchange of money. With the take-up of mobile phones today exceeding the adoption of bank accounts worldwide, this aim seems not only achievable but necessary.
The company is working internationally to achieve this, including connecting with European operations, and collaborating with microfinance organisations, and central and local banks in Africa, so that actions like remittance become simpler and cheaper.
In achieving his aim of an accessible global platform, Groff believes collaboration with other digital payment companies and with banks is essential.
"We need to build a whole ecosystem where people will adopt this protocol," he says. "If we do it alone, and all of our competitors do it alone, we will all lose. So we need a common understanding and that's what we're pushing for at Mobino.
"We are partnering with banks and retail brands, in order to push this payment network as widely as possible. We are open for business for all banks."
The desire for this ecosystem is reflected in the company's 'moving coins' logo, which Groff would like to see applied to the digital payment system as a whole, across all the different companies offering it.
Unusually perhaps for a businessman, he also looks forward to a time when Mobino's prices can be lowered.
"The 1% we charge today is the upper bounds of what it should be. When the digital payments ecosystem reaches sufficient scale, with millions of payments a day, costs will of course come down dramatically and prices can be lowered. I'm very excited about that future - it's exactly what should happen and what is happening already in the internet industries. Prices keep being lowered and services keep being improved."
As Mobino and its competitors continue to improve their offerings, for the banking industry it's a simple case of recognising the invitation to get one step ahead by adopting this technology now.