In Belgium, only ING, KBC and BNP Paribas Fortis support the option to pay with Apple Pay. For example, if you are a Belfius or Argenta customer and have an iPhone, it is difficult to pay without touching the smartphone. Bonsai payment app changes this in a roundabout way. HLN spoke with Jelle Baats, CEO of Antwerp, about the new position, the green startup’s business model and what it’s like to compete with giant Payconiq Bancontact.
Anyone who knows the existence of the Bonsai Payment App will probably know because of the promise to plant a tree for every ten payments you make. Ideal for those who want to clear their conscience or do something good when buying a white apartment in a cafe.
You can also send money with it to someone else using Bonsai. The app can currently impress about 10,000 users per month, Batts told our editors. In total, 90,000 people have installed the app on their smartphones.
With the launch of Google Pay earlier this month and Apple Pay last week, the Antwerp company wants to tap into a new market. This allows you to pay without touching your smartphone as you can with several bank cards, without having to access your wallet. Until now, you had to be the “right” bank customer to be able to use Google and Apple Pay. For example, Argenta does not support either method.
Bonsai changes that. The company behind the app is a payment institution recognized by the Belgian National Bank, and they can link to the checking accounts of almost all Belgian banks. When you do this, you can pay using Bonsai and the amount will be withdrawn from your account after a few days max without further steps.
Virtual MasterCard and high Apple fees
You can now pay via Google Pay and Apple Pay. For this purpose, Bonsai creates a virtual Mastercard that works like a classic bank card. You don’t pay with credit: the money goes directly from your account. Moreover, with Bonsai you cannot go below zero in your bank.
Customers of banks such as Argenta, Belfius or Beobank finally get the chance to use Google or Apple Pay by detour from Bonsai. Amazing, because banks that don’t support it say they won’t because of the cost Apple is asking.
Exactly how much Apple has to pay to support the service, Bonsai CEO Jelle Baats doesn’t want to say. “There are fixed costs and a variable portion. This also applies to Google Pay and Mastercard. It is known that Apple costs more than Google, but this is not so bad,” says the entrepreneur.
It is now important for Bonsai to recruit enough active users who pay with the app. Bonsai earns a certain amount from each payment. Once you make enough payments, the fixed costs for Apple Pay, Google Pay, and Mastercard are minimal. “Then we can break even and maybe make a little profit from it,” says Bates.
But bonsai also promises to plant a tree with every ten payments made using the app. This of course costs money, more specifically ten percent of the volume of business the company brings in through transactions. “We don’t look at the profit we make from that, because that’s not possible deceive had become. This is important to us because you cannot manipulate the rotation. This is black and white,” Bonsai CEO explains.
Meanwhile, the payment company that was founded in 2016 is far from profitable. In 2021, the startup lost more than 2.3 million euros. Jill Bates isn’t immediately concerned about this. His company follows what he calls the “American model”: take a large market share first, then turn a profit.
But this model has been under pressure recently. Tech stocks are falling, central bank interest rates are rising, making borrowing more expensive, and investors are spooked. Illustrative exampleDelivery company Speedcam Gorillas plans to lay off half of its office staff and refocus on countries where it generates 90 percent of its turnover. For this month, the company seemed to care less about taking profits and instead focused on capturing the market.
Bates says he’s not bothered by these trends, because bonsai are much younger and at a different stage in life. Our investors are part of that story. we are lucky. Let me tell you: our losses are likely to increase in the coming years before they fall again. What matters now is market penetration. That’s why we’ll be launching in the Netherlands, France, Germany and Luxembourg next year.”
Once it is big enough, Bonsai can start earning money. How exactly is not yet set in stone. “Actually, we’re a little bit like Facebook. We have a free product, like Facebook. At the same time, we’ll provide services to other companies,” explains Bates. Think of ways to communicate as a trader about discounts for Bonsai users. The Antwerp startup will then get paid in return.
The elephant in the room
In this user search, Bonsai bumps into a giant company: Payconiq Bancontact Company. This payment company is owned by major banks KBC, BNP Paribas Fortis, Belfius, ING and AXA Bank / Crelan. In addition to the well-known Bancontact payment system, it also runs the Payconiq payment application. The latter has a technical advantage: with Bonsai, you have to link your checking account again every 90 days.
However, Bates is not afraid of the biggest competitor. For example, he believes that the social story of tree planting will encourage people to use bonsai. Apple Pay and Google Pay are also functions that Payconiq does not have (at the moment). And worldwide, Payconiq Bancontact products don’t work, which Bonsai can now do thanks to contactless payment methods.
So the CEO is also ambitious. “By the end of the year we want 50,000 active users and by 2025 we want a million,” he says. That’s more than ten times as many users in three years. Whether or not this will work is a matter of coffee grounds, but at least Jill Bates and his staff have enough to prove it.
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