NOAH London is just around the corner, so we sat down with Europe’s most promising startups to learn more about why their products and services can revolutionize the digital ecosystem.
Today, we’re chatting with the co-founder of phos Ivo Gueorguiev who will be presenting on our Startup Stage at our conference on 30-31 October at Old Billingsgate.
What does your company do?
Phos empowers every merchants from all over the world to accept payments directly on their phones from contactless cards and other mobile phones and devices. Unlike the existing solutions like classic POS terminals or mobile POS, phos does not require any additional hardware. All that is needed is an Android NFC enabled device. Additionally, merchants can accept alternative payment methods and seamlessly integrate payment acceptance with a variety of business applications such as loyalty, campaign management, geo location offers, analytics, etc. all from the comfort of their smart phones. It also serves as a perfect instrument for lenders to reach this market segment and for micro and small merchants to get access to much needed working capital.
When and why did you launch the business?
The idea for phos came up two years аgo when the team behind phos created one of the first SME loyalty program solutions – My Rewards. These solutions were mostly adopted in the US and Canada and used the so-called smart terminals as platform. These smart terminals were extremely expensive, so we started looking for ways to adapt this system to the standard POS terminals.
It turned out that the POS terminals capabilities were rather limited. They could essentially only accept payments. This is when we asked why can’t smartphones simply accept payments instead. Meanwhile the contactless credit card penetration was on the rise, there were more and more apps which allowed payments directly via the phone. Why couldn’t smartphones accept direct contactless card payments? When you come to think of it, today’s smartphones have much bigger power capacities than for example the computer that sent men on the moon. So we had the idea and started talking with people in the industry.
They were initially sceptical as we didn’t really think it was possible. We didn’t take no for an answer and continued working. By 2017 we had a working prototype. After some lengthy discussions with card schemes, they embraced the idea. This is when we started developing the kernel of the payment acceptance app. And so in the summer of 2019 we received the Level 2 certification with Visa. We also ran security tests in the largest security lab in the world. This proved that even without any additional hardware, the smartphone is secure enough to carry out payment transactions.
What are your biggest milestones to date?
Developing Visa and Mastercard Kernels, receiving Level 2 certification from both companies, passing Security certifications, winning the Elevator Lab Bulgaria and being a finalist at the Elevator Lab International.
What is your target market and how big is it?
Phos is in the mobile payments market, addressing primarily SMEs around the globe, starting from Europe. It works perfectly anywhere with decent contactless card penetration and mobile wallet proliferation.Our primarily goal is to offer the unserved and underserved merchants a solution for accepting contactless payments, while offering SMEs a better alternative to traditional POS terminals.
The market potential is high In Europe alone as there are 50 million merchants and 17 million POS installed. Leaving potential, a market of 30-35 million micro and small merchants.
Mobile phones are primed to become POS terminals, allowing 100% de facto smartphone penetration and 90% contactless card penetration (expected to reach 100% in 3 years).
Why will you be successful?
We have the right product, and everything is shifting towards mobile devices as everyone is looking to get rid of hardware. Merchants want additional value and lenders are struggling to originate assets in the SME segment.
We have the right go-to-market strategy, we would seek partnerships with large players to ensure fast adoption, we then share our success with our partners. We have the right combination of payments, business and IT development skills
What is your next big challenge?
Generating substantial initial traction before competitors enter the market and be among the top 3 Software POS in the world
What are you looking for at NOAH?
Meeting potential partners and investors and spreading our caisson of no-hardware payments into shops
Are you planning to raise funds over the coming months and what criteria should your ideal investor have?
Yes, we are currently raising € 2m and are looking for a recognizable partner who would help us scale by connecting us with the right potential partners.
Why should potential corporate clients meet you at NOAH?
We offer an innovative product which we plan to distribute primarily with partners, our success is based on the success of our partners. Our product offers new possibilities for cross and up selling, as well as new revenue streams.