White collar crime is not going away anytime soon. If we’ve learnt anything from the 2007- 2008 financial crisis, and the aftermath of the Lehman Brothers’ bankruptcy and Bernard Madoff’s ponzi scheme heist of the century, this type of crime has simply become more sophisticated in an increasingly digitalized world. According to Cybersecurity Ventures, cybercrime will cost the global economy an estimated $10.5 trillion annually by 2025. IQPay’s innovative solution to protect consumers within the payment ecosystem comes at the right time.
A South African born and bred innovative, cutting-edge fintech startup that is incorporated in both South Africa and the US is redefining how consumers and merchants interact and transact whilst mitigating the risk associated with financial fraud. IQPay co-founders Yannick and Michelle Ruiz share the tea with AfricArena’s Jabulile Sonya Ngwenya on their success story and how they are using AI to make payments more secure for their customers.
When asked what advice they can impart to fellow founders and startups on the African continent, Yannick, CTO at IQPay says, “The biggest problems are where the biggest opportunities can be found,” “We’ve all heard it before but find the most pressing problem and then solve it! Do your research. Network and seek guidance, you don’t always have to learn every lesson the hard way.” Michelle, IQPay CEO adds a few words of wisdom, “manage your finances wisely, be frugal where possible and allocate resources strategically. Build the right team – find people smarter than you and then convince them to join you!”
Yannick continues, “There is no denying the relevance of our offering based on the continued increase in fraud year on year. With a staggering 600% increase between 2018 and 2022, we are answering to one of the most pressing problems in the payment industry. This, together with our previous experience of building scalable and robust solutions, ensures that we remain relevant and answer to the needs of our partners and customers.”
For those who don’t know what IQPay does, Michelle explains, “Our technology is where security meets convenience. Consumers can transact without the need for a device or wallet. IQPay is a cutting-edge, future-proofed payment technology. Driven by autonomous AI, the solution aims to redefine how consumers transact in-store and online, facilitating payments and loyalty participation using a facial biometric template. In a digital era where online and in-store transactions are vulnerable to various threats, IQPay stands out by providing a secure and innovative solution. Our technology eliminates the need for physical cards, PINs, or passwords, removing the opportunity for fraud through online compromises or card cloning on devices.”
While facial biometrics technology is an evolving industry that is not without its risks, Michelle says, “in recent years, facial biometric technology has undergone a significant transformation, dispelling its earlier negative reputation.”
IQPay showcases the potential facial biometrics technology has to protect consumers’ identities and combat fraud, and in a world that is increasingly aware of protecting consumers’ data, Michelle shares, “Our platform at IQPay has taken a responsible approach to collecting, processing, and storing facial biometrics, prioritizing user security while harnessing the convenience it offers for payments and loyalty participation. Notably, we ensure that no actual images are stored on our platform; instead, the facial biometric is converted into a secure digital signature used for robust transaction authentication. To enhance security, our platform incorporates embedded liveness protection, preventing easy bypassing with static photographs or deepfake technology.”
She says, “We are committed to making our technology accessible to businesses, and, therefore, we've designed it to seamlessly run on existing devices and hardware, minimizing adoption costs.” The efforts of this husband and wife team determined to make a difference since founding their tech startup in 2022 has paid off as Michelle tells AfricArena, “our facial recognition engine has been recognized by the US’ National Institute of Standards and Technology (NIST) as being one of the most accurate commercial products across all skin tones.” A laudable achievement considering how challenging it is in the beauty industry to get a perfect foundation colour match for all skin tones.
Michelle adds, “facial biometric payments are poised to play a central role in the payment ecosystem, with the facial biometric payment market projected to experience remarkable growth of 113.6% between 2024 and 2028.” This means IQPay has a market advantage in being an early adopter of the facial biometric technology and utilising it to prevent and solve financial fraud and ride the AI solutions driven wave.
Fraud can happen to anyone, and Yannick emphasises that “it's crucial for individuals to take ownership of their security.” He says, “rather than relying solely on banks or payment service providers, consumers should educate themselves about the technologies they use as understanding the associated risks empowers individuals to make informed decisions about when and how to use these technologies.” It is important, he shares, “to keep yourself informed about the latest scams, and in the event of a breach, take prompt and decisive action to protect yourself and minimise the impact. To achieve this, advance knowledge of the necessary steps is crucial. Unfortunately, many consumers tend to seek information only after an incident has occurred, leading to a loss of valuable time.”
Driving product awareness has not been an easy journey. Yannick and Michelle relentlessly pitched their highly scalable tech startup to investors at several AfricArena Summits throughout 2023 and even showcased IQPay at the ENRICH in Africa Center Inauguration event.
Michelle describes how their AfricArena experience catalyzed IQPay’s success. “Engaging with the startup ecosystem served as a catalyst for fostering valuable relationships with partners, mentors, and fellow startups. Our participation in AfricArena’s events provided substantial exposure, while interactions with VC's and other stakeholders offered invaluable insights into structuring and growing our business. This experience not only ensured our investment worthiness but also guided us in remaining relevant and innovative in our industry. The AfricArena team also always went the extra mile supporting and assisting us beyond just the events.”
Perseverance is the hallmark of entrepreneurial success, and the funding winter didn’t dampen their enthusiasm to push through to the other side and win. Both Yannick and Michelle share that it was a combination of their perseverance, alongside with the encouragement and mentorship from their advisory board including Steven Freidmutter, Lisa Illingsworth, and Karl Bauermeister that helped them stand firm. Michelle explains, “in the startup world, the temptation to accept investment from any source is strong, but we understood the importance of knowing our value and convincing others of it as well as ensuring we onboarded the right partner. Fundraising proved to be the most challenging aspect of our journey. When traditional funding avenues were limited, we innovated, exploring alternative revenue streams to sustain our business's development and product-building efforts. Most importantly giving up was never and will never be an option, so with that in mind we just kept knocking on every door irrespective of how many “Nos” we received.”
It is not everyday that a founder finds the perfect co-founder match early on in the game. Michelle chuckles as she tells the story: “Initially, I worked solo, frequently turning to Yannick as a trusted sounding board for opinions, guidance, and insights. As the excitement and realization of our venture consumed every spare moment and conversation, it became evident that having Yannick full-time in the business was pivotal to our journey. This realization marked a significant turning point for us.”
Yannick smiles as he takes up the story, recounting what inspired him and Michelle to start IQPay: “The inspiration to start IQPay stemmed from a profound realization of the transformative impact it could have on addressing numerous challenges. It became evident that our solution had the potential to provide clear answers to pressing issues in the financial and payment landscape. Witnessing the clarity of the solution and its capacity to make a positive difference fuelled our determination to bring IQPay to life.”
The best advice this duo received came from a mentor’s reference to a quote from the Million Dollar Baby film, “Take them out in the first round.” Michelle pauses and with a twinkle in her eye, she shares: “This advice has resonated with me as a founder because my most precious commodity is time. Often, we find ourselves investing unnecessary time in certain matters or individuals. Therefore, I've adopted a fearless approach – if I can't see the value, I swiftly move on, ensuring that my time is dedicated to what truly matters.”
This fearless approach may ring a bell for some, bringing to mind Apple co-founder Steve Jobs’s opinion on the power of focus, as your focus is sharpened by how many times you can say no to hundreds of amazing ideas so you can zoom in on that one thing you must do with laser sharp focus.
Being a husband and wife team in a demanding environment may not be easy, but it is not impossible. Michelle says, “As a husband and wife team, our success in business is rooted in the foundation of mutual respect and collaboration. We leverage our unique skill sets, holding each other accountable and recognizing the distinct value that each of us brings to the table. This dynamic not only fuels our professional achievements but also extends to our private lives, creating a harmonious and effective partnership in both realms. The key lies in fostering open communication, valuing diverse perspectives, and allowing each other the space to be heard and contribute.”
Yannick shares that in his role as CTO, he is passionate about what he does every day. “My passion for what I do is deeply rooted in the thrill of overcoming challenges, the excitement of innovation, and the profound impact our solution can have on lives and businesses. The constantly evolving landscape of technology presents an exhilarating challenge that drives me to push boundaries.” He says a day in his life “revolves around actively engaging with our product development teams, many of which are dispersed remotely. I am deeply involved in ensuring that our teams stay on course and consistently deliver the quality we aim for. A significant part of my day is dedicated to refining our product roadmap and exploring opportunities for integration. As a startup I am also very involved in the business development component of the business.”
Michelle on the other hand shares that the field of facial biometric technology and AI is fascinating and that for her, every day is an adventure. “What I find most exhilarating about my role as CEO is the dynamic nature of each day—no two are ever the same. I am mainly involved in the commercial and sales aspects of the business, I enjoy the opportunity to interact with individuals spanning various verticals and industries. It's a continuous journey of understanding and learning, a facet of my work that I thoroughly enjoy.”
One of the most challenging aspects of being a startup in the fintech sector is, without a shadow of a doubt, legislation, “particularly in the context of diverse countries with distinct privacy and payment regulations,” says Michelle. “The complexity of addressing these legal intricacies demanded a strategic approach. To overcome this hurdle, we proactively sought guidance and collaboration with industry-leading partners, including IBM and Worldline, who had established footprints in various countries. This collaborative effort afforded us a comprehensive understanding of the nuanced needs and requirements within different regulatory frameworks.”
The one thing that has helped IQPay expand from their small beginnings to where they are now is “strategizing with the end goal in sight.” Yannick says, “we laid the foundation for IQPay with a clear global strategy from the outset. We were deliberate about the partners we wanted on board and establishing partnerships with industry experts possessing the right skills and infrastructure was paramount to supporting our go-to-market strategy.”
IQPay is busy initiating a funding round to fuel their expansion into the UK, Mauritius, Nigeria and Rwanda with a target of securing an additional $1.2 million to bolster their go-to-market strategy in these countries. This startup powering its way through different territories is not about to let legislation get in their way of succeeding beyond the odds. “We capitalized on the valuable support provided by programs such as the IBM Hyper Protect Accelerator Program and the Worldline E-Payments Challenge,” Michelle says. “These initiatives not only connected us with larger teams but also facilitated in-depth consultations, enabling us to comprehend compliance requirements and implement strategies to future-proof our business.”
IQPay is not here to play small, they’re here to give the lions a run for their money. The transformative impact of AI, says Yannick, can be felt across society and we haven’t reached the tip of the iceberg yet. He says “AI is reshaping the financial landscape, particularly in terms of accessibility and inclusivity on the African continent. With a significant portion of the population previously underserved by traditional banking, AI-powered solutions are bridging the gap.”
These technologies, he says, “enable secure, convenient, and affordable financial transactions for people who may not have had access before. AI-driven financial tools are streamlining processes, reducing costs, and enhancing efficiency, thereby empowering individuals to engage in formal financial systems. Moreover, the use of technology in finance contributes to financial literacy and education, fostering a more inclusive and resilient financial ecosystem across the African continent.”