Listen to this episode here: Listen to Your Customers

Welcome to our blog for TALKING NUMBERS with Paul Jansz. In this article, we share our conversation with Daniel Kniaz, Founder and CEO of DiviPay, a fintech start-up that issues virtual corporate cards and offers full control of spending with smart, automated rules and real-time tracking.

The Journey So Far

Daniel grew up in Sydney. He studied a double degree in Business and Psychology before leaving Australia to live in California for a couple of years. When he came back, he worked for Deloitte, then in the innovation team of Westpac, where he met the Co-Founder of DiviPay. Daniel is grateful to have learnt the processes in big professional service firms and finance banking payments, which led him into the idea of DiviPay products.

DiviPay is the third iteration of the product. A few years back, Daniel and his team began with a consumer facing B2C product originally designed to share payments or split up a bill. Later they pivoted to another B2C app centring around protecting consumers privacy and security while shopping online, by issuing unique virtual cards for each online payment. It was a proxy to an original bank card so that customers can get an extra layer of protection.

Daniel says, virtual cards have been the core for these products. They have scaled the product well can are getting great traction.

The Shared Card Problem

When DivPay was founded, it was very difficult for small business in Australia to get access to a traditional corporate card. They realised there were two different workarounds, one would be an employee having to use their own funds to make a purchase on behalf of the business and then be reimbursed; another solution is to have one or two company cards shared around an office.

Then Daniel heard a story from one of their customers. The customer’s company used a photocopy of a single card, and 30 people had the card information sitting in the top drawer of their desks as a shared access. One day, the bookkeeper noticed a small transaction on the company’s statement. She went to the team to ask who spent this, and for what? No one knew what it was. The next day, the bookkeeper noticed the same merchant, and about $10 came off the card. She was getting worried at this point. Again, she went to ask everyone and still no one has an answer. She went to the director and said, I think we need to cancel this card; it may potentially be frauded. However, the director said it couldn’t be cancelled because all our infrastructure, bills and subscriptions ran through this single card. If they cancelled this card, it would take weeks and weeks to get a new one from the bank. The next day, something like $55,000 was deduced from that card due to fraud.

The Solution

Daniel says this is a perfect example of how card sharing can cause inefficiency and damage. They noticed the problem in this space and then built DiviPay. They give business owners, CFOs and finance teams the ability to issue everyone in their organisation with their own unique corporate card. The main cardholder can set up granular spending controls on that card. It is essentially a way of building your expense policy into the actual card itself, locking into a merchant, transaction size or time of day. Additionally, when a team member spends using a DiviPay card, you can use that transactional data to automate the expense reporting. Finally, DiviPay pushes all the transaction and automated reports into a connected cloud accounting software, whether it be Xero, QuickBooks, or other accounting platforms.

Daniel shares that their first step was talking to the customer and figuring out their pain points. After that, they started the strategic and execution side. Daniel says, banks used to be the only ones with access to payments infrastructure. Now, that infrastructure is becoming much more accessible, which has allowed businesses like DiviPay to build on top of payment utilities. DiviPay doesn’t have to build payment processing capability from the ground up, and they can focus on building a better customer experience.

Daniel introduces that they are partnering with a few financial institutions. The investment arm of ANZ bank has made a strategic investment in their business. He thinks partnering with a brand like ANZ because it’s helped to create a sense of legitimacy among small businesses. He states, as a financial product and a start-up, this sense is really important. Partnering with ANZ might open up the ability to tap into a lot of the banking services in the future.

The Virtual Card

Danial introduces that their product is 100% virtual. However, it essentially works in exactly the same way as a physical card. The only difference is that lives on a smart phone, rather than in a wallet. A customer can get access to the 16-digit number and CVC through the app, then make all the online payments.

What’s more, the customer can instantly set up a new team member, without waiting for weeks to get a physical card in the mail. Likewise, it’s very easy to cancel that card and withdraw the access if a team member leaves.

There is also no printing of paper receipts, not even taking a photo. All of the tax compliant receipt information, including the itemisation, is sent directly in a digital format to the paying app. All of the information is real-time and 100% tax compliant. The business owner can see exactly the GST component; you can see all the itemisation of what and where the money was spent from anywhere.

A Piece of Advice

Daniel suggests that listening to your customers is essential for anyone building a business, whether it’s a FinTech start-up, accounting or bookkeeping practice. He says that before you build any feature or offer any service, make sure you spend a lot of time listening to your customer and understanding their pain points or the job they’re trying to do.

Daniel points out that it’s really easy to start building something but only later to realise that no one really wanted it in the first place. If you build a solution to people’s problems, you already guaranteed that they’re going to want it and happy to pay for it.

If you build a good product, your customer is going to spend a lot of time thinking about what they want to see next. You have to listen to the customer and extract from them, because the roadmap is in their head.