Published on the 23/08/2017 | Written by Donovan Jackson

Genoapay secures investment, sets sights on the USA…

Fintech is the hot ‘new’ thing right now but Kiwi companies like PushPay and Latipay have already blazed an innovative trail into the United States and China respectively by providing niche payment solutions to solve real problems faced by consumers. There’s another name you might want to consider adding to the growing list of clever fintechs chipping away at customer payment challenges: Genoapay.

It helps merchants sell more by giving consumers an interest-free no-fee 10-week period to pay for the goods they need.

Sounds a bit too good to be true, but there is a business model here. Founder Shaun Quincey explained to iStart that, quite simply, the merchant covers the cost in its sticker price – and it may not crank up the price of the goods for customers who choose to Genoapay. “That means the consumer gets their goods with no penalty, while the vendor typically makes a bigger sale.”

The obvious comparison for Genoapay is probably Q-Card, something Quincey was quite prepared for. He pointed out that Q-Card might be justified in its description of ‘interest free payments’, but the absence of a mention of ‘fee-free payments’ is where the catch lies. Using Q-Card requires a $60 annual card fee and a $30 transaction fee. The net effect is that often those who can least afford to pay more for their goods and services, wind up doing just that. Miss a payment, and all hell breaks loose, certainly from an interest charged perspective: something between 19 and 33 percent can be expected.

“We don’t cost the consumer anything additional at all; Q-Card by comparison is a terrible proposition for the consumer,” Quincey added.

There’s another difference and it is tech-related. Where a Q-Card depends on an analogue process of filling in and sending forms around, Genoapay is done on the spot using a smartphone and two minutes of your time. “For the merchant that means closing the deal there and then. Merchants tell us they have a 60 to 70 percent dropout rate if the customer can’t buy right away. So, we don’t really see Q-Card as a competitor.”

Asked if worries about consumer indebtedness have any bearing on its business, Quincey said this is absolutely a consideration. “We focus on enabling people to get what they need, not what they want –our merchants are in the automotive or maybe dentistry industries, so you can get your car or your teeth fixed. Spending is capped at $1500 and there are credit checks. We don’t focus on 18 to 25-year-old women, for example, and cause them to get into trouble with credit for things they don’t really need.”

While he said the business ‘could be profitable from day one’, like many startups, Genoapay is focused on growth at the expense of bank. “We’re comfortable to sacrifice profit for growth, reinvesting in the business and looking to expand,” he confirmed.

With 6 people on board at present, moving into new offices on the North Shore on the very day he took iStart’s call, Quincey added that the company has multiple positions open as it seeks to sign up more merchants.

Merchants who, he added, ‘love us’ – “We could sign up 30 or 40 a day if we had the resources.” Finding the right people is, however, the hardest part of the business, given the interest in fintech, and given the competition for specialists from the likes of PushPay, Latipay, Xero and the banks. “That’s way more difficult than signing up new merchants.”

Interestingly, Quincey said once it feels it has the NZ market sewn up, it wants to target the USA. Why not Aussie, first? “We’ll probably end up there by osmosis [or perhaps by canoe – he is the Shaun Quincey who once rowed the Tasman], but my experience is in the USA, we’ve seen what PushPay has done there, and it is just a much, much bigger market.”

Things are looking positive for the company. In a press release from Callaghan Innovation, it said Genoapay has attracted a million-dollar investment through the Flux Accelerator Programme co-funded by Callaghan Innovation and delivered by The Icehouse.

In a statement, Robbie Paul, Head of Startup at The Icehouse, said it was no surprise Genoapay attracted the support. “They have many of the features that our investors and our funds are looking for in startups: they’re targeting a market that needs disrupting and they’ve attracted support and interest from key users and supporters in the ecosystem. Superseding all of that, we put our own money in based on our experience of observing Shaun over nine months.

“He is driven, passionate, very knowledgeable about the ecosystem he’s targeting, and just generally a great guy to be around.”

Something to which iStart is happy to attest.