Daniel isn’t interested in using tech to provide a better, faster way to use your credit or debit card over your cell phone, online, or anywhere else.
He’s interested in building something better than credit and debit cards altogether.
On the Payments Innovation podcast, AeroPay Founder & CEO, Daniel Muller, joined us to share how he’s disrupting the entire payments industry (and helping both customers and businesses in the process).
Why Daniel started AeroPay
The first thing you notice when you talk to Daniel is that he’s anything but ordinary. His background has certainly helped mold his creative personality: He comes from an entrepreneurial family, and he’s a first-gen American, with roots in Argentina and Uruguay.
Originally, he stumbled into tech by accident — the 2011 recession dictated his abrupt move into joining his brother’s startup, GPShopper. (That was a smart move, by the way — in 2016, Synchrony acquired GPShopper.)
From his experience with GPShopper, Daniel knew businesses were paying high interchange fees for both credit and debit card usage, and, often, this was of little help to the consumer; with debit card usage, there are few rewards and incentives (other than convenience) for shoppers to pay with debit cards. Daniel knew it was time to rethink the model: What if there was a way to keep the convenience, and help both sides save money?
AeroPay was born.
What is AeroPay? (inexpensive instant bank transfer)
AeroPay is a closed-loop payments platform that allows consumers to make purchases with instant bank transfers. (Pretty simple.)
“Most payments revolve around card networks and incumbents, which leads to huge fees for businesses and, effectively, higher costs for customers. We want to disrupt that entire model.”
Making purchases over instant bank transfers saves businesses a ton on interchange fees, and AeroPay takes a portion of those savings and pushes them directly back to the customer via cashback rewards.
AeroPay’s main focus is small & local businesses … for now
For now, AeroPay is focused on providing a mobile payments experience to small and local businesses and allowing customer to use the AeroPay app to pay those businesses directly.
The pitch to businesses is pretty simple
The pitch to businesses isn’t a hard one: “Every a customer uses our payment platform instead of plastic, you save money.”
The pitch to consumers is via education
To gain consumer market share, AeroPay focuses on education through the businesses themselves.
“We tell the businesses to say to customers, ‘Every time you use this app, you save us money, and you get cashback rewards.’”
It’s a fairly straightforward business model, with a financial upside for all parties involved.
But what about debit cards?
Some may have a slight misconception about debit card usage — currently, the fees are still very high for businesses whenever anyone uses a debit card. Again, the main difference between debit and credit cards is simply that most customers don’t receive any form of rewards for using debit cards like they do when using a credit card.
AeroPay’s business model (it’s actually not about the fee)
AeroPay takes a small fee of every transaction done over their platform, but that’s not where they are ultimately looking to make their money. They’re trying to change the entire thought process of how payment platforms work; with that, they are attempting to partner to layer on additional services for both the business and the consumer, such as loyalty, analytics, and marketing for businesses, and direct deposit of the cashback to micro investments for the consumer.
In the long run, these layered-on additional services will (hopefully) provide the true backbone of AeroPay’s business model, said Daniel.
AeroPay is focused on education
Their main focus so far has been on education about how the incumbent plastic system works — essentially, it costs businesses money, and those costs inevitably get passed onto the consumer.
“We do multiple workshops in multiple languages to inform people there really is a better way.”
To find out more about this payment innovation:
To find out more about this payment innovation, go to AeroPay.com.
Until next time!