Velkommen til Lørn.Tech en læringsdugnad om teknologi og samfunn, med Silvija Seres og venner. 

Silvija Seres: Hello and welcom to Lørn. My name is Silvija Seres and our topic today is Fin tech. I have one of the coolest Fin tech founders from Norway here with me, that is David SalVail the co-founder and CEO of a company called Zeipt. Welcome David. 

David Alexandre Salvail: Thank you very much. 

Silvija: David. I've observed Zeipt for a while. Ever since you were a part of the incubator of the Norwegian Nordea Factory program. Supercool idea where you were you help people digitalize their receipts basically. Make sense of both travel expenses and everything else. We will talk about your company, both in terms of products and in terms of growth. But before that, I was hoping we could talk a little bit about you in terms of product and growth. Who's David and what drives him. 

David: David is a 25 year old entrepreneur. So, my back story is that I am born in Canada, grew up partly in the Parkland UK. Mostly in Ålesund. I have a Norwegian father and Canadian mother.

Silvija: Okay.

David: So yeah, I grew up in Ålesund, Norway's most beautiful city as they say. And then I started studying in Oslo, in 2013. 

Silvija: What did you study? 

David: So I went to BI. Started Bachelor's in economics and business law. And, I like to say that I kind of stumbled into startup. 

I always wanted to do something on my own, but I didn't know what. But then I met Sebastian, my co-founder. So me and Sebastian.. it is quite a fun story. We had a subject at BI called international business. 

And this was August 24th, 2015. We had a three-hour lecture and it became a discussion in class about Trump. This is when he just had gotten the nomination republican nomination. So then we were talking about this, and this was something that I was really interested in. I was doing a lot of research and trying to understand what this effect is going to be, positive and negative. And Sebastian also. So, we ended up having like a three-hour class. We're only me and him were kind of discussing/debating but kind of both on our side, and then there were two other people. So, it was fun. And then after in the library at BI he came over to me and I was actually working on this other idea that I was working on. And I'm really glad I didn't do that idea. Because that idea was basically Vipps, but it was paying for charity. So, I'm really glad I didn't do that because I think they made that better than what I could. 

Anyway, so Sebastian and I start talking and then he says, “I have an idea, I want to solve receipts” and I'm like, yeah, but why haven’t you done it yet. And he says ”I don't have a co-founder”.  And I just say “Now you do”. And then we had a couple of months, we started teaming up in some group project in school. And then we would also work on this idea on the early stages. And then we met the guy called Stian Rustad who started 24/7 office. 

Silvija: Stian is a good “doer”. 

David: Yes, and he had some type of thing at BI and then I went to him after and was like “We got this idea” and he said “Cool, We'll talk”, and then he showed interest and said “I think I can fund you guys a small amount”. So, what we did was that we started the company in January 2016. and we didn't even know what fintech was back then. And our goal was to replace paper receipts, and that is our goal today. So that's why we started the company. So, then he invested in us summer of 2016 and we were part of the factory, one of the three of the first cohort. 

Silvija: The Norwegian bank, Nordea is setting up a competition accelerator, or no?

David: It's not Nordea that set it up. But they are one of the main partners behind it. So, the factory has multiple banks, multiple partners, multiple mentors and investors. So, it is a fantastic set up, based in Oslo. So back then in the early days we were in the factor in Fårnebu, in Telenor Arena. That was Good times. 

Silvija: It's like a gathering for slightly older guys with a business plan. 

David: Exactly. 

Silvija: So, I want to ask you about the product then. First of all, you never had formal programming education, but you do some coding?

David: Sebastian is the genius on that side. So, Sebastian has always been Tech interested, but he's not a programmer. So, the last three years Sebastian basically went from a BI student to a fully blown Enterprise Architect. So, he's basically set up the whole infrastructure for the service. And, of course we are collaborating with a fantastic team. We have actually produced it now. 

Silvija: You and Sebastian do the architecting of your product yourself?

David: Sebastian. I'm not on the tech side. 

Silvija: Okay, but then you had some help with some of these coding. I'm trying to understand. What's the difficult part of digitalizing receipts? What have you learned? 

David: Oh my God, that's more than 15 minutes. So, what we want to do, is we want to replace paper receipts. And what we what we saw when we start working on this is that, to be able to replace it. To digitize a receipt is not difficult, you go to a retailer you get an email receipt. You go to some retailers you download an app. There's a lot of those types of solutions. So, what we understood is that the problem is not the actual being able to design a receipt. The problem is actually the business model behind it. I normally use the payment industry as a reference. Visa and Mastercard. What do they do? They provided the infrastructure. So, they just said to Banks and retailers. “Look here are the playing rules so that any Bank in Norway can give you a card. I can go and use wherever I want in the world”. Because everybody's playing on an equal playing field. Some there is a standard there. So that means I have a Norwegian card. I go to the state's, I go to Asia, I go to Africa and I can use that Norwegian card because it's got a Visa, and it´s part of an international ecosystem. So, what we saw is that access to the systems that actually generate the receipts of the cashier systems. There is no standard on the technical side to be able to say any bank can connect to us. And that's what we're doing. So, we're bridging the gap between physical retailers and digital financial services. Such as your online bank, your accounting software, your mobile wallet such as Vipps. And our focus is not to create another app, not to do email receipts. But what we're doing is we're going to retailers and say look, here's a simplified API Platform that you connect to. The marginal cost is very low. And will make sure that we'll be able to send as many receipts digitally for you as possible. The other side, we go to the banks and anybody who's got an interface that are relevant and say “look, will make sure that will give you as many receipts as possible from the retailers that were connected to, once your consumers given consent of course” And that's what we do. So, the challenge on the market is not how to do a receipt. But it's Building a system that actually can replace 70, 80, 90 % of receipts, and that's not been done for before anywhere. And that's what we're going for. So, Norway is going to be the first country in the world that probably is almost receipt free within let’s say five years. 

Silvija: That would be very cool. That could work also for services, not just for products. 

David: Yes. We're focusing on physical retail products. What we say high value low volume. So, choose Furniture, Sporting Goods. The receipt matters a bit more and of course what we're building is the sum of or building is more than receipts. It means open banking to which you've talked extensively on your podcast earlier. So, I'm not going to lecture people on that. But in short terms it means that banks are competing with payers they never thought they would compete with, and are desperate to find new value propositions, to be able to keep their customer. 

Silvija: So, can you tell us a little bit about Banks and the new regulation and how that opens some new opportunities for you? 

David: So, we're in a sweet spot when it comes to PDS2 because we are writing the hype wave of Pst to open banking, in the sense that all the bank's want to talk to us because we can actually provide them with information,

Silvija: It's possible that not everybody has heard the other podcasts, or we can also tell people what it is. 

David: PSD 2 Payment service directive, that went into law last year. sure. PSD2 says that banks, if in interfaces go consult, have to share my information where I want it. So, if you've created a really cool app and I use that app, and I said, “I want to see my accounts”. My bank has to give you that information so I can see my accounts in that app for free. So, they have to have open API.

Silvija: Which opens up for all kinds of things starting from Apple pay, to basically connections in these financial industries that were not possible before.

David: Vipps is direct effect. The bank saying “Oh my God, what are we going to do? There's going to come some cool app that's going to steal our customers, and we can't compete with that”. So Vipps is like a direct effect of PSD2. So, my vision for post-psd world is that we're not going to use one banking app for all our banking, but based on our interests. We're going to have an app. So, for example if you're very sporty you have this app that's connected to the retailers that you buy your Sporting goods with. Maybe you have a car that you only use for that type of stuff. And then it's kind of a loyalty program connects to it, and then you use that for that. At and then you use something else for your car, which is activated all the gas stations, biltema, repairs of your car. So, our vision is that post-psd2 is that you're not going to use one app. You can have multiple apps for different use cases. You're going to use revolute maybe for traveling. So that's kind of the thing. And for the banks, that's scary. 

Silvija: Yeah, because I think there is this death by thousand cuts. You're being kind of bitten at the ankles all the time. But I think big Banks underestimate how this is going to add up. 

David: Yes, and no. So, what happened a couple years ago was fin tech were out there saying, “oh we're going to eat the bank's” but the thing is that there's going to be a dependency on the banks in Fin Tech. So, you're seeing now a very clear trend in SNB and in consumer Tech where Banks and Fin techs are collaborating, and I think that trend is going to continue for at least another three four years, before you start seeing that “omg, they're coming for our lunch”. But that was the initial hype, but then you see that this ecosystem is quite heavy and even though the API is opening for new ways, of course. So, I don't believe that Fin techs are going to eat their lunch and all that doomsday type of speech towards Banks. But it is going to happen because not all banks are going to be able to keep all their customers. Especially in Norway, there's an abundance of banks compared to what we need. And a lot of applications now, and the marginal cost of scale is going down. So, of course it will happen, but I don't believe that it's going to be some huge thing. And I think the banks are on it slow. And I know all about those processes there. But yeah, so it's going to be a hybrid.

Silvija: We're still going to need big banks at the stuff that they are uniquely good at. And then we'll have some other alternative services. And hopefully will be educated enough to know how to use what for what. 

David: Exactly I think that will happen natural. 

Silvija: Do you feel your generation is much better at thinking progressively about these new kinds of hybrid solutions?

David: I'm not sure about that to be honest. I wouldn't say my generation is any more advanced. We just have a different mindset and different demands. I only speak for our team basically. 

Silvija: You're being nice now, that's okay. So, you recommend the company, or a project called Libre. What is that?

David: So, Libra is this new cryptocurrency/table coin that Facebook just launched. I don't know if I recommend it, but it's very interesting. 

Silvija: Why is that interesting if Amazon or Facebook starts their own cryptocurrencies?

David: What's interesting with Libra is not that Facebook started. This has been an open secret but look at the players that are part of it. I'm looking especially to Visa and MasterCard. I haven't done extensive research on this, but I think it could work. And that's kind of cool but kind of scary. The biggest problem with Bitcoin wallets, and Bitcoin payments is the fact that who's going accept it. If it turns out the way I think it is, or if their partnership is where you could connect some dummy. Because that's the thing with apple. They launched a card not so long ago. And that card was like a dummy card. It's just connected to other cards. So, there's not really any tech in the card, it's connected to Apples virtual card, basically. So, what that means is that, since they have Visa and Mastercard. Since they have the backing of so many merchants, or not so many merchants, but uber and the other unicorn merchants of the world. I think that can work. I think it could work. And I don't know if I 100% positive, because that's a bit scary. Utopia wise you can replace fiat currency. 

Silvija: You are growing in Norway? what plans do you have? 

David: We have a couple of Scandinavian countries that we deem very homogeneous to Norway. So that we're looking into, and that we're going to try to scale because it's all about our partners basically. So, we're working towards some larger cashier systems right now. So, it kind of depends where they want to take us, where they want to put us. “We want you to go that market there, or that market there”. So that's kind of what we're waiting for. But our goal is to do this properly in a couple of markets. Two or three markets, and then our goal is to start licensing out our Tech to markets that are not far-fetched, but downwards Europe. And then collaborate with central players in the payment Industries there. Because of course payment Industries is so different from country to country. So, what we want to do is kind of like a semi Vipps strategy where we just say “look we've got the IP just licensed it out. You guys get a bit of ownership of that, and yeah enable it that way. 

Silvija: Do you have a quote you would like to share with our listeners as a parting gift? 

David: Competition are for losers. 

Silvija: But what does Peter Thiel mean by that? What do you think? 

David: I love it. I love it because it is so true today. 

Silvija: We are obsessed by competition is that it?

David: No worries about finding a business model. Back in the days what you do is you create cops, you'd sell them, and you try to compete. But today. Especially in Tech, it's not about competing. It's about creating Mutual. So, what we say “we don't compete, we compliment”. That's the most important thing about our business model. And that's what we've used three years to kind of understand, is we don't compete. We go to the market say “look, this is what the market can do. Get access to the information structured, cheap enough and more scalable so that more bags and accounting software can receive receipts, and more visas can send out receipts”. So that's what we're doing. We're saying, we're going to complement the market. So, we go on the market and say “look, anybody can do what we can do” technically of course. But we're going to do it cheaper, and we're going to do it to facilitate your business interest, so that we make money on the volume of solving this problem for multiple players. We lower the marginal costs for all the players that will want to do this, because then they'd have to do this dirty work. We basically do the dirty work. We're the ones who get our hands dirty with the integration of the cashier systems and Banks. So basically, what I mean with “we don't don't compete, we compliment” is that we always focus our business model and creating mutual value to your value chain, because then you position yourself as a necessity.

Silvija: I think if you focus too much on competition, then you can only grow on your own power. If you focus on complimenting as you do, then you grow when everybody else grows wich is a much nicer way to grow 

David: So that's our biggest advantage and main challenge, the fact that our for our business model is so focused on creating that network that early stages. We're not really doing anything else than that Network. So, we're selling the value of a network without having the network per say today. We do have good traction, but then on the flip side, it's much more scalable, and more internationally scalable. Because we didn't go to the value chain and say “oh we're doing this dashbord and we're doing this, and we're doing this” We're very focused that enables scale and scale is good. 

Silvija: If people have to remember one thing from our conversation, what would you like to be? 

David: Norway is going to be the first country that has replaced digital receipts. Norway is going to be in the forefront of replacing digital receipts in the next coming years, and Zeipt is going to play a good role in that. 

Silvija: I really look forward to that David SalVail, co-founder and CEO of Zeipt. Thank you for helping us understand the new ecosystems in Fin tech. 

David: May I add something?

Silvija: Yes please 

David: If anybody's interested not only talking about receipts but learning about the impacts of how digitalization and Retail, the sustainability impacts of solving receipts and general things like landscape, please check us out on the Zeipt project on all social medias. 

Silvija:Very good, highly recommend it, Zeipt. Thank you for listening. 

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