In 2013 mobile bill payment platform Pinpay had to make a decision: shut up shop or start again from scratch.
They went with the latter. They got rid of most of the founding team, brought in a new CEO and development team, and had a business model makeover.
Three years on and it was worth it. This week they announced their biggest partnership yet: Pinpay will be expanding beyond Lebanon after signing a deal with Egyptian electronic payment pioneer Fawry.
This will make Pinpay available to millions of new customers, a huge advance on their approximately 60,000 enrolled users, by opening their services to Fawry users in Egypt (about 15 million in 2014) as well as the plethora of Egyptian expats around the world.
CEO Omar Bader told Wamda that the partnership was complementary to both parties and
would provide in-roads to other huge markets. “Fawry doesn’t have extensive presence on mobile and we don’t have any presence in Egypt,” he said. “It’s win win.”
Pinpay’s origins go back to around 2009 when it was born in Lebanon. As the region became the battleground for political upheaval, a group of men in Beirut wanted to make paying for things with your mobile possible in Lebanon.
It started with Elie Touma (who came up with the idea), Danny Abla (who became CEO and chairman), Stephen Solomon, Toufic Mubarak, and Walid Hanna (now one of venture capital firm MEVP’s two partners).
What Pinpay does today - payment of bills using your mobile phone - is different to what the group wanted to create in 2009: a platform that would allow users to pay for items in retail stores and restaurants.
Touma said the idea couldn’t see the light of day without finding the funds, so Hanna took the idea to Bank Audi.
“We demo’d it and got from them about $800,000,” said Hanna, and his then-employer ABAN (Arab Business Angels Network) in Dubai gave them another $200,000. As such, Bank Audi was considered a cofounder in the legal documents.
They had the money in place but needed a leader. As the only one of the group available for the role, Abla offered to be CEO.
It would be another three years before they would launch the Pinpay product. They convinced Bankmed to come on board but the product wasn’t good enough. “Audi wasn’t satisfied with the first version of the Pinpay product,” said Hanna.
By 2013 Pinpay was being used only by Bank Audi customers with cumulative losses of up to $4 million. The retail and restaurant payment plan was clearly a dead end and changes had to be made.
“There was no other option than to keep the product afloat,” Hanna told Wamda. “We couldn’t disrupt those some 10,000 [registered users].”
Out of the darkness, into the light
In the midst of these problems, in walked IT software business architect André Zein.
Hanna approached Zein in February 2013. Several months later he found himself in a three day brainstorming session, coming up with a new strategy to overhaul everything/every internal platform - from account systems to how billers were onboarded.
“We developed a plan, showed it to the board, and by lunch time were had the go ahead to mobilize [a new Pinpay]” Zein said.
Despite Zein's 15 years in business this was his biggest career challenge yet, as he had to find the right staff in a short space of time. “Blessed” he said they found 12 people in two weeks and they got to work.
Simultaneously, the CEO Abla and most of the founding team parted ways. His replacement was 30-year veteran of the mobile payments industry, Omar Bader.
By April 2014, after nine gruelling months, the new Pinpay app was ready to go.
There’s always the trust issue
For Bader meanwhile, success has come in growing the company (they will add another 10 staff to the current 24 in coming months), and diversifying income and products.
There are six million Egyptian expats in the Gulf who Pinpay can now access through Fawry, with features such as “purposeful remittances” which enabling these expats to pay their own bills at home, directly.
While high street solutions to paying bills from abroad come in the form of Western Union, Moneygram and Cash United, locally, a platform like Pinpay enables users to pay their biller direct from anywhere.
But many challenges remain the same: user trust and the onboarding of banks.
The team says there’s little competition among other mobile platforms. In Lebanon, aside from banks’ mobile payment apps, no one else is offering Pinpay’s services - and they are the only one’s with the license from the Lebanon Central Bank to do so.
There are almost 500 billers in their catalogue (not all active) and Pinpay is keen to provide a wide range in order to reach as large a demographic of Lebanese bank account holders as possible. “We wanted to make sure all users could benefit,” said COO Joseph Azar.
There’s also the money factor. “For entrepreneurs to start out in this field you need to be backed by serious investors and authorities,” said Bader. Indeed, look how long it took Pinpay to get started. The lack of policy or regulation for such a service was also an issue for them and as such, they are the only company to now hold a license from the Central Bank of Lebanon, to let people pay billers and P2P (peer-to-peer payments).
Getting government on board is a tricky one, too. A fiscal stamp is required on all payments of bills to government entities, like water and electricity, meaning that a digital solution for government is difficult. (Note, they do have Lebanon’s fixed internet network owner Ogero).
“It’s something that could stamp out corruption,” Bader said. “There is no access to funds, no cashier.” And with the transparency of each payment that comes as part of the Pinpay service, that would be a constant record of where government bodies were getting their money.
The recently leaked news of their signing on of Fransabank, means they now have three of the biggest banks in Lebanon on board. The bank’s investment of $2.5 million (notably not through Circular 331), is a sign that the trust issues are fast fading, and the only way now, is up.