For the GCBS 2022 in Berlin, the Mobile Ecosystem Forum’s Director of Programmes James Williams interviewed David Lotfi, CEO at Evina, about his 15 years of experience in the DCB market.
1. You are known in the ecosystem as the CEO and founder of Evina. Can you tell us more about yourself and how you came to start Evina?
I am a telecom engineer. At the very beginning of my career, I interned at a Parisian startup that sold services via DCB, stayed there for a while, worked my way up and soon became the CTO. In 2013, particularly pernicious fraud schemes started to appear on the market, which had a strong impact on our business. With my team at the time, I developed a dedicated anti-fraud solution. This project was a great success and soon several MNOs asked me if they could use my solution as they realized that only our DCB services didn’t generate any complaints. I was convinced that it needed to be developed further because cybersecurity had become a necessity to ensure longevity of the DCB payment world. I bought full ownership of the technology and founded Evina with those who had helped me make this disruptive technology a reality.
2. Carrier billing is a promising industry, but very often it develops under the radar of the start-up world and VCs. You have recently raised more than 20 million euros from an American VC. How did you get their attention?
Forward-thinking VCs understand the advantages that DCB has over other payment methods and that in a competitive environment, betting on DCB makes a lot of sense. DCB is a payment method that offers conversion rates up to 10 times higher than that of credit cards, allows seamless payment flows and ensures a particularly high level of user data protection. The only missing piece in many parts of the world is cybersecurity though.
The first action that truly allows DCB to flourish in regions where DCB is booming is always cybersecurity. We are fortunate to have partnered with a fund that is perfectly aligned with our vision: DCB will become one of the main payment methods of the future and its extreme security will make this possible. This is a great sign for the whole ecosystem of a bright future.
3. You’ve now been working in the DCB industry for more than 15 years. What are the key changes in the industry you’ve seen over the years?
This experience allowed me to personally experience the first golden age of DCB and then the eruption of fraud. This era created a real movement of solidarity and collaboration between the players in the sector. We’ve seen operators join forces to create best practices and set up self-regulation systems for the sector through the creation of professional associations. We have seen the emergence of working groups on cybersecurity issues in the DCB etc. Whilst all this is a positive step, I believe this isn’t enough. A lot more needs to be done.
A real polarization of the sector between those players who are betting on DCB and its full security through both regulatory framework and technical means and those who rely on the regulatory framework alone has emerged. This is true at both the operator and country level. The operators who gain the most market share are those who invest and secure their payment methods by using state-of-the-art technology, and the countries where DCB is most successful are the countries where it is best protected.
4. Why have the regulatory efforts and the self-discipline of the industry players not been enough to stop the fraud?
Because we are talking about a technology area for which the law or best practice recommendations alone can only be expected to provide a partial solution. Fraud has become automated and cybercriminals have rapidly developed new forms of attacks, by hacking DCB using advanced malware. It’s therefore necessary to provide a technological solution capable of adapting continuously and enforcing regulations. This means significant and ongoing investments over a period of years to be able to identify new forms of fraud and to stop them in their tracks.
5. What is the real impact on players who are not fully aware of this technical fraud?
The most immediate impact is the limitation of the activity. Many players have simply limited their DCB activity and have implemented more restrictive rules concerning their partners or the use of technology. This limits the universality of DCB payments and makes them progressively less competitive. The worst thing is of course that the lengthening of payment flows, the introduction of One-Time Passwords, and other restrictions cannot stop fraud, but it does drastically limit the activity. In most cases, growth is limited and the company stagnates trying to cope with the fraud. In the long run, the main risk is to be forced into shutting down, at least temporarily, because of a major attack.
6. What are the players with the highest growth and profitability in DCB doing to succeed?
They work on these basic fundamentals: conversion rates, end-user satisfaction, latency, and the quality of the partners they work with.
The ideal for the consumer is to pay in one click on an optimized merchant site, and with complete peace of mind.
To achieve this ideal, the best players trust their partners to build the most optimal payment paths, they take full advantage of all DCB has to offer and attract partners that are particularly valued by the end user. To do this, they invest in the right technology solutions that allow them to trust their partners and control their business. And this is what a great cybersecurity solution can offer, capable of tracking the entire sales funnel, having total visibility of the flows and stopping cybercriminal attacks.
The future of DCB is bright and we’ve reached unprecedented levels of satisfaction with our customers. And this is just the beginning for our industry. Juniper Research estimates that the market will reach nearly $100 billion by 2026, with the most secure players capturing a majority share of that pie. And by protecting themselves, they will grow the DCB market well beyond that level.