Interview with DiviPay – Russell, Daniel
I was recently invited to chat with the founders of DiviPay, one of my favourite new financial products. I first made contact with Russell and Daniel after I wrote a post about DiviPay earlier. We have maintained contact since then and as one of their earliest and most active customers, I jumped at the opportunity to get some inside knowledge about the business.
In a light hearted conversation we talked about their future plans, their achievements to date and some of the challenges that they’ve had along the way.
The conversation jumped around a lot so I’ve combined Russell and Daniel ‘s responses into one to keep things simple.
To kick this all off can you explain – What is DiviPay?
DiviPay is a digital wallet designed to protect people against online financial fraud and theft. DiviPay lets you instantly create unlimited, multi-use virtual cards that replace your normal credit or debit card to make safe payments online.
In addition to this we offer one of the best foreign exchange rates in Australia. We do not add the 2-3% transaction fee that financial providers do, making overseas payments more affordable.
Wayne: This is exactly why I have already blogged about you guys – your lack of foreign exchange fees!
Why protect yourself from online fraud?
The introduction of chip, PIN and tokenisation for physical payments (e.g. Apple Pay, Android/Google Pay) does a great job of protecting people from fraud in-store.
However, this has pushed scammers to start targeting online payments. This, combined with an increased rate of online purchases has resulted in Australia having one of the highest rates of fraudulent transactions per capita in the world.
Moreover, recent data breaches from Uber, Deloitte and Equifax have shown that even big, reputable companies are not completely reliable.
This is where DiviPay can help. It’s a form of tokenisation for the online world which is good for older people who are worried about the internet because it is new to them. It’s also good for younger people who are increasingly aware of the importance of security and privacy online.
Who pays for fraudulent transactions?
The merchant typically pays the entire refund of a fraudulent transaction as well as the lost stock.
The consumer then pays indirectly through increased costs of products and services and the admin time spent replacing cards and redoing any direct debits.
The bank pays by spending time and money providing replacement cards and handling the customer service queries.
Ultimately, fraud is a drain on the entire ecosystem.
What’s your biggest achievement so far?
Firstly, getting the virtual card deal with Mastercard. This is a core part of the technology that makes DiviPay possible. It took 6 months and over 800 emails to finalise the partnership.
Secondly, being the only business in Australia to be able to issue virtual Mastercards is something that we are really proud of pulling together.
Finally, that DiviPay solves a real problem for our customers and that we get to talk to our customers all day, everyday. We are incredibly lucky to have this relationship with them because the golden ideas come out of these conversations.
What’s really pleased you about how customers have been using the product?
It’s really exciting to see people come onto the platform with a really particular payment in mind to then realise that they can use DiviPay for many other payments as well.
Also as we said before, it’s really pleasing hearing from our customers about how DiviPay has helped people protect themselves and their money.
What have been some frustrating customer trends that you’re willing to share?
The most frustrating thing is when customers try to put through fraudulent transactions. However, we have very advanced security systems in place so these people don’t get very far.
Another frustrating thing (which was our fault) was in an earlier version of the product we did not allow people to top up their card once they had loaded an additional amount of money. This meant that customers might only load $100 to their virtual card but then later realise that they needed $120. As a result they would refund that virtual card, make a new one and start the process again. Ultimately this was a really clunky experience for the customer and so we changed it.
How does the technology behind DiviPay work?
DiviPay’s virtual cards work a lot like a regular bank issued physical card. Each card has a BIN (the first 6 digits of a card) which are unique to DiviPay. The following 10 digits can then be assigned as a card number.
There are four parties involved for every payment that is made through DiviPay – the merchant’s acquiring bank, Mastercard/DiviPay, and the consumer.
If, for example, the consumer wants to pay a merchant $100 the merchant’s acquiring bank will kick off the process by contacting Mastercard to see if they have the money.
Mastercard will then turn around and say to DiviPay “can we debit $100 from this card?”. DiviPay says “yes, this card has enough credit” which Mastercard passes on to the merchant’s acquiring bank which then approves the transaction.
Once the transaction is approved then the funds are transferred to the merchant’s bank.
Can you ever run out of card numbers?
We won’t run out of card numbers because each card number can be reused by simply replacing the assoicated expiry date and CVV. This is what happens with your regular bank card.
What’s the difference between a DiviPay Card and a Prepaid Visa Gift Card?
At a technical level DiviPay virtual cards and prepaid Visa gift cards run on different schemes. Ultimately this is good because it means that DiviPay cards can be issued instantly, and for free, which is not the case with prepaid visa gift cards.
Are there any plans to implement Mastercard Securecode?
It’s on the list, but is not a high priority as the current setup already allows for quite a high level of security.
What’s the difference between chargebacks with DiviPay vs a typical financial institution?
There is not much difference. Chargebacks are completed via Mastercard and are a very slow, admin intensive process. Luckily, we’ve only had to deal with one chargeback so far.
If people have an issue, it’s better to resolve this directly with the merchant; they prefer it. However, if you are unable to reach a resolution with the merchant, we will act on your behalf and conduct the chargeback for you.
Why should customers be at peace having their funds with you?
Our customer’s financial data is not stored by us. It’s stored by an Australian provider who is supported by an Australian bank. We also have to comply with Payment Card Industry Data Security Standards.
Security is something that we take incredibly seriously and is part of the company’s DNA. Both of us come from a banking background with Russell working specifically within the security team.
Do you have any plans to accept AMEX again?
It’s not a priority at the moment. AMEX is currently very expensive to work with and our partnership with Mastercard has been excellent.
What are your future plans?
Our number one most requested feature is to enable in-store payments and we are getting really close to enabling offline transactions through Apple Pay and Android Pay.
Another thing in high demand is the ability to load more funds onto a DiviPay account. The current limit is $1k at a time per account.
We have also been trialling a beta version of a browser extension that enables one-click payments. We will be launching a public version of this within the next few weeks.
Is there anything else you’d like to add?
We’re growing very quickly and are currently hiring. We’re looking for talented full stack developers so if anyone reading this is interested please apply here: https://www.divipay.com/careers/.
One of the recurring themes throughout the interview was how much DiviPay talk to their customers. I can testify that they do indeed love hearing from their customers having been asked for feedback several times.
There’s this feel to them that other companies don’t have – that is, they are very engaged with their customers.