He talks about the increasing adoption of Buy Now, Pay Later (BNPL) services and the emergence of Open Banking, giving ideas for fintech development.
– Sure! My journey into fintech began with a simple desire to address the challenges faced by both e-commerce merchants and consumers in the rapidly evolving fintech landscape. There were basically two major triggers, witnessing the growing popularity of Buy Now, Pay Later (BNPL) services and recognizing the potential pitfalls of predatory lending, I firmly believed that this was not a sustainable business model and is prone to pitfalls more than the benefits that it promises to bring. Secondly, after the roll out of Open Banking which is essentially account-to-account instant payments without the involvement of a credit product, I realized this was a far superior financial services product and if technology solutions are built leveraging Open Banking, it had the potential of truly disrupting the fintech ecosystem. The regulators in the UK have been striving hard to achieve consumer adoption of Open Banking but without a lucrative incentive, it was impossible to achieve this. Here is when I saw the opportunity to co-found Fam with a vision to empower both merchants and consumers through a responsible and rewarding way to pay.
– Fam’s platform leverages open banking payments and data-driven insights to incentivize responsible spending and reward customer loyalty. For e-commerce merchants, Fam enables zero-fee payments and provides access to valuable customer data, allowing them to better target and retain customers resulting in reducing customer acquisition costs. Meanwhile, customers benefit from the ability to earn store credits through their purchases, fostering a sense of loyalty and since these are account-to-account payments, customers only end up buying products that they can afford thereby encouraging responsible financial decisions. We have also aligned our revenue model around this behavior, e-commerce merchants pay us a small fee if and when a customer returns to redeem Fam-earned store credits on a returning purchase. If our platform is not able to generate any repeat sales for merchants, they continue to enjoy free payment processing forever.
– One of the key differentiators of Fam is our multifaceted approach to empowering both merchants and consumers. While responsible spending is certainly an important aspect, our platform goes beyond that by providing merchants with valuable insights derived from anonymized financial profiles and user cohorts. This enables merchants to make data-driven decisions that lead to reduced CACs and increased customer lifetime value (CLTV). Ultimately, Fam offers a holistic solution that addresses the needs of both merchants and consumers in today’s digital economy.
– Certainly. Fam recently participated in the Fintech Innovation Lab – London, where I had the opportunity to discuss the company’s value proposition with industry leaders from UK’s tier-1 banks such as Barclays, Citibank, and HSBC. The experience was invaluable, and it reaffirmed my commitment to driving positive change in the fintech space. However, one challenge we’re currently facing is the delay in becoming an official Shopify Payments partner. Shopify is a key platform for Fam, given its large market share of e-commerce merchants within our target categories. We are currently working towards getting the approval from Shopify which would allow us to distribute our Shopify Payments App to merchants so they can start accepting payments via Fam on their Shopify store.
– I believe that Fam has the potential to usher in a new era of zero-fee payments and rewards with better incentive alignment. Not only by empowering merchants and consumers but also by fostering a culture of responsible spending. As more businesses and individuals recognize the importance of financial literacy and awareness, we envision Fam playing a central role in shaping a future where merchants are able to improve their top and bottom lines, while delivering more value to their customers and encouraging sustainable spending habits among young shoppers on a large scale.
– Certainly. We’re constantly innovating and exploring new ways to enhance our platform and expand our reach. In the near future, we plan to offer more integrations to major e-commerce platforms, and offer better targeting for more efficient customer acquisition for merchants leveraging open banking data and reaching consumers via our consumer-facing mobile app. Additionally, we’re committed to fostering partnerships with like-minded investors, fintech and e-commerce companies while continuing to advocate for responsible spending habits and win-win transactions between customers and the brands they love.
