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A gift for someone back home? Send them a token

Disruption versus continuous improvement or Kaizen. Tesla versus the relentless focus on improving the Prius. Although disruption and the accompanying Millennial business rebel are seemingly at the heart of the Startup culture, the reality is somewhat different. For every Kodak and Blackberry story, there are strong examples of incumbent organizations which understand the business that they are in. Boeing, Toyota, The Guardian... the list goes on. These are the value plays that are often referred to by the best brains in the investment world.
Most of the businesses that have adopted the Kaizen way welcome innovation from within. It's not just about improving the old way but more of incorporating the new without grinding the old to a halt. The Lexus ES350 2017 model bears more than a passing resemblance to its 2007 version. But the cars are vastly different in terms of performance, comfort and styling. Continuous improvements have been incorporated into the model. This ongoing process ensures that improvements do not require major changes in the supply chain, whether is be component manufacturers or service centres.
In the area of payments, there have been several attempts at disruption. These have met with varying levels of success.
Take the Peer-to-Peer (P2P) payments opportunity, which is close to $1 trillion globally in volume according to various estimates (Reference Juniper Research Domestic Money Transfer and International Money Transfer Reports). This number takes into account both cross-border as well as domestic payments. Countries like Kenya, Uganda, Pakistan and Bangladesh have seen excellent progress in domestic P2P payments in some areas and not as much in others.
In general, sending payment to merchants and recipients which are not subscribers to the same mobile money network has been a challenge. Others such Dwolla and Venmo have focussed primarily on P2P payments within a country. Cross-border remittances are being targeted by apps such as Remitr, TransferTo, Ripple, Currency Cloud amongst a hosts others. These solutions have been based on clearing house platforms, blockchains, pre-funded settlements primarily. Usually the front-end is a mobile app or web portal.
Middleware takes an innovative approach based on existing card technology that makes mobile payments such as ApplePay and SamsungPay possible. The company was founded by Alexander Vityaz in 2014 in the industrial centre of Ukraine, Dnipro. Key employees in the 40+ strong company have more than 20 years of experience in the banking sector. Share CreditCard is technology that allows customers to share access to the money on their cards instead of making a money transfer.
The technology solution uses card tokens to allow anybody with a payment card from Visa or MasterCard to instantly share his or her credentials with a recipient without having to follow the traditional remittance process. The solution's simplicity and immediate applicability won the Middleware team a place among the eleven finalists which make up the pioneering batch of startups being incubated at the Fintech Hive at DIFC.
Speaking about the solution Egor Avetisov and his colleague Maria Gurina described the prevalence of smartphones with inbuilt near-field communication (NFC) capability which allows touch or tap based payments, similar to using NOL card on the Dubai Metro or an RTA bus. Just as nobody would imagine smartphones without inbuilt cameras, NFC-capable devices are rapidly becoming the norm. These phones have secure hardware that allows card networks to send tokens which can be used for payments to them. Tokens are for all practical purposes equivalent to a typical card number. The card network generates these tokens on behalf of a cardholder based on automated requests made by his or her bank.
All that the sender and recipient need to have is an easily downloadable application installed on their phones. Senders can download the app and send a link via any messaging service similar to SMS, WhatsApp or Messenger. The recipient clicks and downloads the app. At the sender's request a token is generated and instantly sent to the recipient's mobile hardware and stored in a secure area. The recipient can use his or her phone to tap-and-pay at a merchant or withdraw cash from any ATM that is configured to accept contactless NFC transactions.
The team at Middleware are practical in their approach. They look at the elegance and simplicity of their solution as a platform on which banks and other financial institutions can build innovative models. Share CreditCard is a part of a suite of products that form the Corezoid platform. The key focus of Middleware is to make Corezoid easily and quickly integrable into existing banking technology instances.
With the support of the team and mentors at the Fintech Hive at DIFC as well as the guidance of the DFSA, it is clear that Middleware is on the pathway to technological success. Wishing them all the best.
 
The writer is founding partner at BridgeDFS, a bespoke digital financial services advisory firm (www.bridgeto.us). Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at sanjiv@bridgeto.us.