Paycode EDAPT

The Problem

One billion people have no formal identity. They can't prove who they are which makes it difficult to access education, mobile phone services, jobs, financial services. Their mobility is constrained. Without identity, people, especially vulnerable groups, are denied opportunities. They can't exercise their rights as citizens and can't receive services and benefits they're entitled to.

The Solution

Paycode's EDAPT solution is a technology platform that makes it easy, simple, practical and cost-effective to create biometric digital identity for anyone, anywhere in under 5 minutes. When they access services and benefits using their Bio-ID, it can be validated and authenticated offline in real time.

How our Solution could positively change lives if it was scaled globally

EDAPT is a scale-ready digital solution that could give 1 billion people a biometric digital identity and enable them to access services and benefits they need simply by presenting their fingerprint.

Specific Problem

When robust ID systems aren't in place, people have difficulty proving who they are and whether they are eligible for social protection program. 

Countries experience administrative inefficiencies and are exposed to potential fraud.

People don't apply or register for an ID because of high fees to apply, travel costs, supporting documentation or they don't feel it's necessary for their daily lives.

Digital authentication mechanisms are often reliant on connectivity making them inaccessible to marginalized and vulnerable populations.

Scale of the Problem

Factors that relate to our solution

Biometrics can be used to create robust identity systems. The EDAPT solution uses the Morpho biometric template standard to guarantee proof of life. People are able to prove that they are who they say they are simply by presenting a fingerprint. 

The EDAPT system continuously checks for duplicates and it is not possible to register more than once, which reduces fraud.

The EDAPT system can create biometric identity at a low cost. We onboard citizens in their villages using our portable, 'Africa-proof' hardware / software system. 

The EDAPT authentication mechanisms and identity validation can be done offline in real time, so we can reach deep rural citizens in the last mile. 

Target Population

Our solution serves people living on less than $2 a day who have no formal legal identity and no connectivity (internet or mobile) where they live.

Our users don't know their birth date and often do not have a birth certificate. Their village has no street names. They live many hours away from the nearest town. They often never leave their village in their lifetime.  

Many of our users are beneficiaries of government social services and rely on social grants to survive. 

How we engage them

We work with government institutions, NGO's, village chiefs and local partners to understand our users. We customize our software to the specific needs of the user for every project.

How our solution addresses their needs

Working with governments, we create and issue a portable, interoperable, secure and authenticated digital biometric identity in under 5 minutes to people from vulnerable groups living in remote areas.

By enabling easy registration using biometrics, we help overcome barriers to identity including high direct or indirect costs, the need for supporting documents or the distance required to travel to obtain documents. We onboard users in their villages, making it convenient, accessible and easy to get an identity.

EDAPT stands for Electronic Data And Payments Technology. We make it simple, accessible and easy for people in deep rural areas to apply / register for an ID, use it to prove they are who they say they are and exercise their rights as a citizen. It is, at its core, an ID system that streamlines identity management for governments and other stakeholders.

We combine biometric digital identity with low-cost access to financial services into a data and transactions platform that can be used for health, social protection, voting and elections, refugees and migrants, banking and payments and humanitarian crises.

We make proprietary software called EDAPT (Electronic Data And Payments Technology). A core component of this software is that it is able to process transactions and information offline in real time. E.g. an identity can be validated and authenticated without the need for internet connectivity. This means that the solution can serve 1 billion of the world's most vulnerable people in deep rural areas.

We exclusively use the Idemia Morpho biometric fingerprint scanner. This scanner measures and compares deep vein blood flow. The innovation here is that fingerprint scanning used by mobile phones is a comparison of an image file against the fingerprint being scanned, but can be easily spoofed. However, a unique finger vein pattern can be used to authenticate a person more accurately, regardless of their change of fingerprint status (e.g. sweaty fingers or degraded skin). The result is that a fingerprint scanned with an Idemia scanner will guarantee proof of life. 

Paycode can guarantee that a user is who they say they are, enabling them to exercise their rights and receive services and benefits. Users don't need connectivity to prove who they are. We can operate at scale in areas that other service providers simply cannot reach.

Our primary use case is the provision of financial services to marginalised populations. Our biggest competitor is cash. Card schemes, mobile money and traditional banks as potential partners who can use our technology to reach the last mile due to our strong focus on interoperability.

We go to villages in remote regions of Africa and onboard users by scanning their fingerprints and recording their KYC data.

A secure central data server (supplied by Stratus) stores users' Know-Your Customer (KYC) data including personal details, fingerprint biometrics and location data. The server performs real-time fingerprint matching and searching to detect duplicates. The digital identity created is unique and users can never be enrolled more than once, however, they can have their card re-issued if they lose it. Once registration is completed, the user is given a smart card which holds their biometric data linked with their Unique Bank Identity Number. The card also contains an electronic wallet which acts as their bank account. It is also possible to transact without cards, just using fingerprints. Data and transaction processing can be done online or offline in real-time.

Management Information System Dashboard:

Paycode currently has over 4 million users and 6 million e-wallets across eight African countries: Ghana, Namibia, Botswana, Nigeria, Malawi, Zambia, Guinea Conakry and Mozambique. Paycode's EDAPT solution is the technology behind the central bank, Bank of Ghana's National Switch called eZwich. 

CLICK HERE for a short documentary describing the eZwich system.

CLICK HERE for a video on the eZwich 10th Anniversary in 2017 featuring the Paycode team. 

CLICK HERE for a video which demonstrates a point-of-sale transaction taking place offline in real time.

CLICK HERE for a video showing two project implementations we did in Zambia and Mozambique that shows our technology in action.

EDAPT's digital data platform is a tool that can link formal biometric digital identity with many applications such as financial services, health, social services, refugee and migrants, voting and elections and humanitarian crises.

We partner with governments to provide identity to their citizens and have often been the enabler and creator of a government's population register when none existed before.

Our expertise lie in operational excellence in deep rural areas, reaching the last mile, taking identity and banking services to people in their villages. As a platform, we don't provide those services ourselves, rather we enable any institution to use our technology to serve the end user. 

Our strong focus on interoperability ensures that almost any organisation (private sector, civil society, NGO) can plug in to our platform in order to provide vitally important products services and benefits to anyone who needs them, anywhere in the world.

The core capability of the system is that biometric identity can be validated and authenticated offline in real time. Using our APIs, any existing identification system can benefit from incorporating the biometric identity provided to end users.

EDAPT was designed to be low cost and efficient. The solution can be rapidly deployed and implemented anywhere in the world. It works offline in real time and doesn't require connectivity to function. Our hardware ecosystem is physically robust and suited to rural environments. This makes the solution responsive to the needs of vulnerable and marginalized populations, and accessible to those who need it most.

Our solution has hardware and software elements as part of the platform. Together they create a fully functional digital identification system and end-to-end data and payments platform.

The biometric digital identity we create can be used by governments, private sector and NGOs to validate and authenticate a person's identity in a simple, easy, fast and convenient way. In addition, the platform could support a multitude of applications and use cases ensuring efficiency, security and protecting the integrity of the data.

Our expert software engineers are capable of ensuring that our solution could be incorporated or integrated into other digital identification systems, if needed. However, it is more likely that a government would procure the EDAPT system to create a country's national digital identification system and ensure that it is accessible to other organisations in order to streamline national identity management and provide a wide range of services and benefits to its citizens.

A key component of the EDAPT system is interoperability with existing technologies and open standards. In 2018, we built mobile money interoperability for the Ghana Interbank Payments and Settlement Systems (GhIPSS) who use EDAPT as their platform for the alternative national switch, biometric identity and banking services for over 3 million citizens. 

We provide open APIs for integration with other systems. We use RESTful web services for our open APIs and secure HTTPS for online data transmissions.

We use the ISO biometrics standard ISO-19794. We exclusively use the Morpho Idemia fingerprint scanner in order to provide bank-grade security requirements for the biometrics and guarantee proof of life as it reads blood flow through the finger during scanning. As a result, for biometric registrations and transactions we use Morpho Idemia tablets and Famoco biometric POS devices. 

It is completely possible to port user data if required, however, we generally act as the technology platform and do not provide products and services to end users. We enable institutions and governments to provide products and services to end users through our technology platform. All biometric data is hosted and stored according to a country's data privacy regulations. 

We support open standards, interoperability and design-thinking that streamlines processes and procedures to make them as efficient, cost-effective, user friendly and useful as possible.

Our proprietary software enables transactions to take place offline in real time. This means that a person with zero internet connectivity can use their fingerprint to prove their identity, transact or have data processed. 

On the EDAPT platform a user's identity can be verified and authenticated offline in real time.

For users with low literacy and numeracy levels, we have created a user experience that is uses icons to help explain menu options on our POS device. 

Users are taught how to recognise icons on the screen and what they mean so that they are familiar with them when they are ready to transact. Merchants can assist users without them worrying about divulging sensitive information like PIN numbers. Nothing can happen without their fingerprint being present. 

When we onboard users, we work with organisations like FSD to provide training and education and teach users how everything works in a hands-on, practical way.

When distributing funds like pensions and social grants, we teach users to identify cash denominations by the colours and designs. For example, they come to understand that their pension should be "5 blue notes" each time they receive it and this helps to overcome the barrier of low literacy and numeracy levels. Our trained staff make sure that users check their funds before leaving the 4x4 cash truck pay station to ensure that they have received the correct amount of money. 

CLICK HERE for a video showing social grant recipients being onboarded and collecting cash payouts in Mozambique.

Currently: 4.2m

Within 1 year: 20m

Within 5 years: 100m

The 5 year goal is less than 20% of the number of adults without formal identity in Sub-Saharan Africa.

Paycode will enable biometric digital identity and affordable access to basic financial services to 20m people in Africa by the end of 2021 and 100m people in Africa by 2025. 

Our user acquisition strategy hinges on strong relationships with local partners, banks, government and actively driving and pursuing opportunities to roll out our world class technology across Africa.

Paycode has appointed Value Added Resellers (VARs) to work with local branches of funding organisations, financial institutions, Central Banks, Government Agencies and private sector companies.

We work with suppliers and industry allies to innovate and drive user growth. The Gemalto Dual Card was the first smart card in the world to support the EMV standard (open-loop card payment scheme), as well as the Paycode standard (closed-loop card payment scheme.) We have been approached by other industry players like Sopra Steria Banking Software to add the Paycode solution to their product suite.

Paycode has strong relationships with representatives of The World Bank, United Nations, national funding organisations, commercial banks and NGOs to enhance its position as the technology of choice for last mile delivery of financial services and the ability to guarantee proof of life, which reduces fraud and results in significant cost savings.

Paycode tracks and submits tender applications to governments across Africa as projects arise. We supply the technology that runs the Ghana Interbank Payments and Settlement System (e-zwich), INAS social grants in Mozambique and FISP agricultural loans in Zambia that all have biometric identity as part of the core solution.

Financial:

• OPEX: We are restrained by the OPEX required to hire staff for product development, sales and marketing Paycode in order to service a large geography.
• CAPEX: Our solution relies on the regular upgrade of hardware. A barrier to scaling is the cost of POS devices, cards and servers. 
• Contract funding: Funds to deliver existing contracts
• Scale funding : Sufficient funding to scale and penetrate new markets

Access to Markets:

• We have strong commercial networks in the countries where we currently operate. In countries where we don't operate, market penetration tends to be difficult.

Financial:

We require sufficient funding ($15m plus) to scale the business. Nearly all of the problems we need to address exist as a result of insufficient funding. This is because there is a requirement for CAPEX funding at the start of each project with a long tail of income and returns which you can only reach if you can fund the CAPEX. Whilst we can continue to deliver projects and growth steadily, to deliver the real benefits we are striving for requires investment.

Access to Markets:

Gaining introductions to decision makers in government, business, non-profits and academia will assist us in expanding our business network and take advantage of opportunities to provide our technology solution to more markets.

N/A

We have 24 full-time staff based in Johannesburg.

Our highly experienced and skilled senior management team are experts in delivering Paycode’s world-class biometric digital identity and payments solution in emerging markets. With a combination of exceptional leadership, innovative software development, efficient and effective in-market operations and end-to-end service capabilities, our team has a long track record of success across Africa and beyond.

CEO - Ralph Pecker

Ralph Pecker has over 30 years experience sales and management at companies around the world. A native Zambian, Ralph is the key contact for Paycode’s high-profile customers such as Presidents and Ministers across Africa. Ralph's extensive network of high-net worth individuals, C-suite executives and government representatives make him an outstanding asset to the company.

COO - Sandy Begg

Sandy Begg has a stellar track record in executive management at large corporates in South Africa. She is responsible for operations and driving innovation in IT at Paycode. She has experience in running large IT teams and ensuring the development of world class technology solutions.

CSO - Mirza Pillay

Mirza is a payments and central banking specialist, and has a deep understanding of the payment industry in Africa. He has strong technical background and extensive understanding of the challenges around payments in emerging markets. 

CFO - Grant Haarhoff

A qualified Chartered Accountant, Grant joined Paycode after 6 years at the South African Reserve Bank where he held high-profile roles including Acting Group CFO. He was an integral part of the SARB’s leadership committees, including the Fintech SteerCo which co-ordinated the Intergovernmental Fintech Working Group.

Our key partnerships are with our customers: Central Bank of Ghana, Ministry of Agriculture Zambia, Institute of Social Protection of Mozambique, SmartSwitch Namibia, SmartSwitch Botswana, MalSwitch Malawi, The Government of Iraq, The Ministry of Higher Education of Guinea and the Federal Government of Nigeria. We work with them to provide customized, market-specific solutions for their citizens.

In addition, we have strong relationships with our suppliers who we work with to reduce barriers to our financial technology ecosystem. For example, we developed an innovative new product, the Dual Card, with our supplier Gemalto (now renamed Thales), to provide users with access to all payments system hardware regardless of whether the hardware is supported by the EMV (EuroCard, Mastercard, Visa) standard or the Paycode standard.

We worked with our supplier, Famoco, to bring down the cost of biometric point of sales devices and supply world-class software for their hardware.

We exclusively support the biometric standard of our supplier, Idemia, ensuring the integrity of fingerprint scanning and reading when onboarding users. The way in which biometric data is scanned, collected, stored and used ensures that Paycode can guaranteed proof of life to its customers. 

Paycode partnered with FSD Mozambique, a financial sector deepening NGO, when we implemented the distribution of social grants to the citizens of Mozambique. In the partnership, FSD Mozambique teamed up with Paycode staff when onboarding new users. FSD Mozambique provided financial inclusion training to social grant recipients, teaching them about managing money, budgeting and saving.

A larger version of this image is available here.

Paycode is currently in a Series A fundraising round, seeking to raise $15 million. This funding will be used for capacity building, business development and marketing.

Paycode's business model is based on a 'software-as-a-service' model, where customers pay a monthly subscription for the use of the platform. 

Paycode derives revenue from reselling hardware from our key suppliers e.g. smart cards, Point of Sales devices, Biometric android tablets, Stratus servers etc.

Paycode derives revenue from licencing our software to 3rd party resellers.

Paycode receives a small fee for every transaction conducted by end users. At scale, this combination of revenue more than covers the costs incurred and is forecasted to provide an excellent return for investors and stakeholders.

This information is not publicly available. Full detail, including access to a data room, will be provided to bona fide parties under a non-disclosure agreement only.

Currently Paycode is privately funded via equity funding. It has revenues of $3m to $5m per year and is operating approximately at break even at the moment.

For more information regarding our funding sources, please contact our Chief Financial Officer, Grant Haarhof by email: grant.haarhoff@paycode.com

We would like to raise a minimum of $15m which can be any mixture of grant, debt and equity. We would like to raise it in this calendar year (2020). Much greater detail, including access to a full data room, can be provided to bona fide parties under a non-disclosure agreement on request. 

For more information regarding our current raise, please contact our Chief Financial Officer, Grant Haarhof by email: grant.haarhoff@paycode.com

This information is not publicly available. Full detail, including access to a data room, will be provided to bona fide parties under a non-disclosure agreement on request.

For more information regarding our estimated, please contact our Chief Financial Officer, Grant Haarhof by email: grant.haarhoff@paycode.com

We have a clear vision that we want to give biometric digital identity and low cost access to financial services to as many of the worlds 1.7bn unbanked people starting with the mission to enrol 100m of the 494m adults in Africa who have no formal identity using biometrics.

We think that Solve can help us  by:

• providing access to skills and knowledge that helps us to plan, implement and achieve rapid growth
• providing access to potential funders
• providing introductions to more parts of the UN and The Word Bank and other funding institutions and NGOs who would benefit from knowing about our technology
• directly or indirectly influencing Governments and banks in the developing world about the value to their economies of digital banking, payments and identity
• providing introductions to other innovative technology companies and potential suppliers with whom we can partner and/or integrate

Our partnership model in fundamental to our approach. We already use VARs and have partnership with key existing technology suppliers like Tandem, Famoco and Gemalto. We already work with some departments of the UN and The World Bank.

We are looking for more partners who fall into one of the following categories:

Solution technology: 

Companies that:

• Improve our technical solution either from a technology or cost              perspective
• Already work in the same functional area and with whom it would make sense to integrate or co-operate.

Product/Service Distribution:

Companies and organisation that have a need for our product/service like:

• Governments
• Banks
• NGOs
• Large employers

Funding & Revenue Model:

• Institutional and other investors that can provide funding to help us deliver our mission

Board Members/Advisors: 

• People with specific skills and knowledge of our marketplace who can help us move forwards

Marketing/Media/Exposure:

• Help to maximise our market exposure

We would like to connect with these Solvers and Partnerships:

• TeachMobile by Eneza (Ghana)
• Practical Education Network (Ghana)
• Tools for Teachers in West Africa (Ghana)
• Hands-On STEM Learning in West Africa (Ghana)
• LifeBank (Nigeria)
• Fresh Direct Nigeria
• TruTrade (Uganda)
• Lynk (Kenya)
• Afya (Kenya)
• Moringa School (Kenya)
• E-Heza (Rwanda)

We would like the opportunity to pitch our solution to and connect with these Solve members:

• Bill & Melinda Gates Foundation
• The World Bank
• Olam International
• Andan Foundation
• Calouste Gulbenkian Foundation
• DBS Foundation
• SOCAP
• Morgridge Family Foundation

We would like the opportunity to pitch our solution to and connect with these ID4D Multi-Donor Trust Fund (MDTF) members: 

• UK AID 
• The French Government
• Australian Aid
• Omidyar Network
• Centre for Global Development
• European Commission
• GSMA
• International Organization for Migration (IOM)
• United Nations Development Programme (UNDP)
• UN Refugee Agency (UNHCR)
• UNICEF
• World Economic Forum
• World Food Program (WFP)

We would like the opportunity to pitch our solution to and connect with these ID4D Advisory Council members: 

• Mari Pangestu
• Dr. Amani Abou-Zeid
• Mr. Achim Steiner
• Dr. Sri Mulyani Indrawati
• President Toomas Hendrik Ilves
• Nandan Nilekani
• Eric Jing
• Carolina Trivelli
• Dr. Benno Ndulu
• Mo Ibrahim
• Iqbal Quadir

We would like the opportunity to pitch our solution to and connect with these ID4D Technical Expert Group (TEG) members: 

• Joseph Atick
• Adam Cooper
• Alan Gelb
• Mia Harbitz
• Gus Hosein
• Sanjay Jain
• Frank Leyman
• Vijay Madan
• Tariq Malik
• Luis Bullón Salazar 
• Andrea Servida
• Dr Michiel van der Veen