Stories about retail financial services in Sub Saharan Africa, aka Africa... They often lead a puzzling question:
How is it possible to waste endless hours for a payment when it seems such a simple thing to do?
I know many of us often ask themselves that question, particularly when they are in a hurry to make one. It could be a money transfer or a payment to a merchant, but it’s always something we need done fast.
Unfortunately the lack of retail payment infrastructure in our countries does not help.
Of course, we have “mobile money”. It's electronic money issued by a bank, distributed by a mobile operator, aka telco. Subscribers can store money and send it to other subscribers of the same service. Exchanging with subscribers from a different service, telco or bank is a real pain.
In fact, most of us use cash and too few accept electronic payments. So we spend a lot of time converting cash to digital money and back.
I reckon the answer is quite simple :
There aren’t enough bank branches, ATMs and payment terminals.
In practical terms, you’re likely to find 6x more people in a bank branch when you visit…
This means long wait and time waste.
In a dream world, payment terminals and peer to peer payments are everywhere.
In the real world, bank branches, ATMs or payment terminals are costly to provide and it’s hard to run them at a profit.
One obvious alternative is to use banking agents for basic operations:
Small merchants that offer cash deposits, withdrawals and accept digital money for payment.
The agent pre-funds cash liquidity for customers deposits and withdrawals. He/she earns commissions from the activity. Funds stay at the relevant telco or bank.
Telcos, have been using agents for prepaid airtime for years. Microfinance institutions use it for merchants cash revenue collection. Utility companies use it for bill payments.
It’s flexible, it’s scalable and cheaper.
Yet, agent networks are often much less active than their nominal size. It’s an open secret and the subject of a recent study by the Helix Institute of Digital Finance.
This is the genuine underlying problem that we, customers, face:
We need fast payments and often merchants don't have enough liquidity to execute them. They are out of funds when we need deposits or they are out of cash when we need withdrawals.
Worse, they have funds with the wrong telco or bank and we must wait until they make the rebalancing... Or find luck elsewhere.
Liquidity requires either a lot of capital, or a lot of two-way traffic (1 deposit for 1 withdrawal). Capital is scarce for a small merchant and two-way traffic is hard to predict.
Diool was born out of such frustrations, to provide one thing:
Simple to use payment intermediation at a large scale.
A payment always serves two parties exchanging something of value. Most of the time, there’s a merchant and his customer involved.
Merchants want to serve the most customers. They fear lost payments that can disrupt their entire supply chain.
Customers want to get their payments executed. They fear merchants or any other party will refuse them.
Both need swift confirmation of payment and interchange.
Interchange means a payment service provider, stands in the middle to smooth things. Customers can choose how they pay. Merchants can choose where they want to get paid.
The payment service provider facilitates trades in money instruments from many issuers. Settlement goes through a central clearing house or by over the counter netting.
But we, customers and merchants, don’t care about such technicalities… All we need is fast payments and be on our way.
To solve that, Diool offers:
A service that offers merchants payment interchange and liquidity management
A service that helps customers sending money and finding available merchants nearby
Diool accepts payments in one form and settles in another. For example, a small merchant accepting a card payment to receive "mobile money".
Merchants using Diool geolocate their shops so it’s easy for customers to find them on request.
Diool users can send money to any recipient that has a mobile money, a bank account or any traceable account.
As long as it can prove origin and destination of funds, Diool has no problem executing trades.
For merchants, it means they can make more transactions per day with less capital.
For customers, it means they have found a liquid place and come back often.
Yes, there is an API, a gateway to Africa’s vibrant, young and tech addicted consumer market.
But to its users, Diool is a little more than that…
For merchants, it’s a productivity tool. Retail networks, with 1 or 100 outlets use it to improve financial flows and return on capital.
They get realtime reports or key performance indicators that would be difficult otherwise
For customers, it’s a simpler way to access services. An outlet showing a Diool sticker, a Diool chatbot or app is also the nearest branch.
They get better experience and interaction that would be costly otherwise.
Diool is part of an ecosystem. It helps existing products find an alternative channel to target consumers. This creates a more engaging user experience for all parties.
It also needs the trust between users in pain and solutions that better their day.
With in-app messaging, Diool provides support with response times often below 3 minutes. User care agents answer any questions or help with online resources. They make sure there is always a response, improving confidence, activity and referral.
For the time being, Diool operates only in Cameroon with only one single purpose:
Use technology to make financial services simpler to access.
In Africa, it starts with your cash point… anywhere.