ButterPay: a mexican cashless, cardless payment solution
I have been collaborating with ButterPay, a mexican payments startup. But before going into that let me tell you some facts.
Cash is a hassle, metallic currency gets lost, is forfeited and gets stolen. It is also difficult to handle and requires hiring specialized cash transport services. From the point of view of a consumer there are alternatives such as debit and credit cards, which are experiencing a demand increase in Mexico in recent years. However the former require a to be linked to a bank account and the latter require a proof of credit record, which is an entry barrier. Most of mexicans do not carry bank transactions, only a quarter of the population has a savings account and only 10% of them have access to bank credits. From a merchant’s point of view receiving credit card payments demands the use of a bank-provided credit POS machine. The strings attached to this devices come in the form of monthly fees and minimum payments-processed monthly quotas, plus a percentage fee (here is an example). Some startups have removed some of these strings but still the merchant is required to buy a card-reading device and the customers must physically present their credit card at the commerce to approve a payment, which brings us to the last issue: credit card security. It is not uncommon to know about cases where a credit card was cloned and unwanted charges appear on your statement by the end of the month. The only way to prevent this is to keep your card safe at home.
So, returning to the start line let me tell you about ButterPay by explaining some use cases.
#1. You are out partying with no cash, you have no credit card, your phone’s battery died and must pay the bill. You can make a pin-approved payment: the restaurant types in your phone number and the amount to pay. You hold the restaurants tablet and type your payments pin as if you typed your credit card’s pin. That’s it, you completed a payment with no cash, no card and no phone.
#2. You are about to pay online and don’t feel like providing your credit card number again. Make a remote payment using ButterPay: type in your phone number and you will receive a SMS with a link to approve your payment. Now use your payments pin. Since your card is associated to your ButterPay account, as soon as you type your pin, you will complete a payment with your credit card. No credit card? No problem, use the pay in cash option available at the payment link and pay at a convenience store.
#3. You want to pay your coffee but don’t feel like providing your phone number out loud. Pay using a QR code: ask the merchant a QR payment and show her your payments QR from your ButterPay app. You are done. You completed a payment in less than one second. This QR code is one-use, regenerates and keeps secret until you want to make another payment.
#4. You have a small child and don’t want to give him cash or an expensive phone for school. Create a limited QR and print it. It will only work to make payments at the school’s store, for a maximum daily, or per-event, amount and with have an expiration date. If your child looses it you delete it and it will not work anymore.
#5. A group of friends went out and its time to split the bill, no one has split cash. Use ButterPay: Michael pays to the restaurant using any of the solutions described before and the rest of you sends a payment to Michael using Whatsapp, Twitter, Facebook Messenger, Telegram or even Tinder! Just use the ButterPay app to generate a payment link and share it with Michael.
#6. A friend owes you money and she does not have ButterPay nor lives near you. Generate a cash fund requirement and you will receive a reference to pay at a convenience store, share it with your friend and as soon as she deposits you will have your ButterPay account.
In summary, with ButterPay you can leave your credit card at home, even your phone. You don’t require a bank account since you can fund it at convenience stores and you can control who you pay and how much. You can send a payment to your peers and also pay to a merchant. As a merchant you don’t require to buy any device and have no hidden fees, you just pay as you use.
It is very exciting to participate in developing and writing about this powerful tool. If you are a merchant you can register here. If you are a user do so here. However the service is only available in Mexico.
