Genoapay founder gets $1m infusion

Genoapay founder Shaun Quincey said surveys had shown consumers were happier to purchase on instalments than load up their credit card or take out a loan

Genoapay founder Shaun Quincey has attracted $1 million of funding from an accelerator programme co-funded by Callaghan Innovation but says he's intent on building his instalment payment platform into a $1 billion business.

Genoapay lets shoppers pay for goods or services of up to $1,500 in 10 weekly instalments using their debit or credit card and attracting no interest. Instead, it charges merchants a fee for being able to offer the instalment payment option. The platform is bankrolled by Finance Now, a finance company owned by Southland Building Society, and uses Debitsuccess to manage its payment systems and credit services. Finance Now has taken a 10 percent stake in Genoapay.

The company's board includes former Paymark chief executive Mark Rushworth and has an advisory board that includes a former head of engineering at Linked In and a former executive at Amazon Payments.

Genoapay is already offering its service in conjunction with an auto-parts business and a dental company, although Quincey declined to name them, saying he wanted to get as far ahead of potential rivals copying the idea as he can. Quincey said surveys had shown consumers were happier to purchase on instalments than load up their credit card or take out a loan.

"Most merchants like it - it's very low friction and much faster than having to sit down and apply for a credit card or personal loan," he said.

Debitsuccess is part of Transaction Services Group which began in 1994 offering payment services to the fitness industry. According to its website, it handles more than 22 million transactions a year with a value of more than $1 billion. Quincey says Debitsuccess provides his company with "scalability" so that it can work with large-scale merchants. While the terms to consumers are interest-free they would be charged a $10 default fee if payments aren't met and ultimately a defaulter would be referred to debt collection if amended payment couldn't be agreed.

Quincey raised the $1 million after pitching his product to investors at a demo day after the six-month Flux Accelerator Programme co-funded by The Icehouse and Callaghan.

"It's no surprise Genoapay attracted the support they did," said Robbie Paul, Icehouse's head of startup. "They have many of the features that our investors and our funds are looking for in startups: they're targeting a market that needs disrupting and they've attracted support and interest from key users and supporters in the ecosystem."

(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation)

(BusinessDesk)


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"DIsrupting" --- term of the year for all startups. This is not in my view disruptive it is incremental. ......may still prove to be a very good business but PR hype is just a con.

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Good Comment, only consumers can disrupt through choice and adoption. Genoapay will need to prove this and we will through creating significant value for users.

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My comment on the term distupting etc was really in response to the Robbie Paul comment. Consultants / brokers love banding about terms that are flavour of the month to create hype etc.

Given that in 15 years of running an incubator the Ice house would struggle to point to any significant disruptive technology / company that they have identified and supported the fact that their investors are backing this or any business should not be viewed as significant.

But for the company well done on getting the funds. Like a further commentator below I have reservations about the social impact of the business. If it can divert people from loan sharks great, if it just adds to consumers buying things they cannot afford that is not good.

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Pay day lending in disguise. This is the exact opposite of what the government should be encouraging

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Interesting comment, I disagree entirely, no interest ever, no fees, and 10 weeks to pay. If you like it or not consumers still need access to payment options for the services they need and this is the most affordable option for people who can afford to pay just not all at once. Genoapay will save consumers millions in interest.

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No interest really - while the retailer might actually pay it gets built into the consumer price.

No fees really - $10 fee on default. Miss one or two payments and any interest saving is lost.

The only people this will work for are those that cannot afford to pay.

Many will think an extra $150 a week is doable, until the car needs a new tyre to get a WOF etc.

Only way this makes money will be via default fees.

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Thanks for your comments on the business. You might be new to this model and how effective it has been in other markets. It is certainly not a solution for consumers who can't afford to pay. There are checks in place to ensure responsible lending takes place.

It's a solution for consumers who can afford to pay just not all at once. You probably own a credit card and pay fees on that card every year and interest from time to time with a Genoapay account you will save you these fees and potential interest.

Genoapay is not for people who can't afford to pay it's for people who don't like fees or interest.

There is no margin on default fees at all

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Good luck, but if you arguement is that the consumer saves on credit card fees, and maybe on interest I think you will be shocked to find most people will not get rid of their credit cards.

The model may work overseas, and it will probably work here but the scale in NZ is inadequate to in my view create a viable business. This is the issue that has been faced by the likes of Harmoney etc.

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Looks like Shaun may have seen a gap in the market.

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Interesting article in the NZ Herald on this type of business. Raises the concerns raised by others above.

Also with 4 companies identified in the article already operating in NZ again raises the question of how "disruptive" this is.

If NZ's so called leading incubator and angel group can not even do basic DD to indentify the level of competition it is no wonder that the NZ angel groups have such poor performance.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1191...

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