Cash, cards and... selfies? How PayByFace is changing the game
As startups go, PayByFace is very much in its infancy, but in the four months since its inception, it has already garnered a notable amount of attention. FinTech finds out more.
Can’t find your phone? Left your wallet at home? The startup PayByFace does what it says on the tin. Through the use of facial recognition, customers using the platform can now make payments with their face. These are indeed exciting times.
The last decade has seen technology evolve at a whiplash speed. With smartphones becoming commonplace in the early 2010s, through to the surge of the digital-only unicorn banks from 2015 onwards; payments remains one of the fastest evolving industries today.
“We’re thrilled to bring a twist to the digital payment space,” said Founder & CEO Mihai Draghici. “We’ve simplified how consumers can pay for their favorite goods and services without their phones or wallets. PayByFace is much more secure but relevant during a time when most people are searching for ways to untether themselves from a mobile device in the event they forget their phone at home or just want to actively be more present in their day-to-day.”
PayByFace is among many fintechs in the race to commodify biometrics in the payments industry, joining the likes of Alipay’s “Smile-To-Pay”, Tencent’s “Frog Pro” and a number of other companies featuring in our top 10. Yet the concern around cybersecurity and data governance remains at the forefront for merchants and customers alike.
To meet these challenges head-on, PayByFace announced that it has implemented PAS 499 Certified Biometric Onboarding in a partnership with Facebanx.com’s unique IDauth.me. This live streaming technology enables the verification of customers while preventing fraudulent transactions. To support this continual growth is Nicola Coscione, one of the senior advisors on the board.
“I am more than honored to join the PayByFace Advisory Board, providing support for their work transforming the future of payment services. I look forward to working with the team to help PayByFace break into worldwide markets, including the world of motorsport that I have been involved in throughout my career. This is only the start line for PayByFace, and I am excited to be alongside their journey of innovation,” said Coscione.
Who is PayByFace?
PayByFace was cofounded in October 2019, by Mihai Draghici and Shefket Robelli in a drive to improve the efficiency of payments and create a seamless shopping experience.
PayByFace is headquartered in Bucharest Romania for its engineering, management and support; and Zurich, Switzerland for its sales, marketing and customer service.
Did you know? The first usage of facial recognition dates back to the 1960s, as pioneer and ‘father of facial recognition’, Woodrow Wilson Bledsoe, used the RAND tablet to track face shape with horizontal and vertical lines.
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Stripe backs Step - the digital bank for teens
The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise.
Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees.
The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account.
To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.
Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.
Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.
Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.
CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told . “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”
Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”
The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.
Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.
Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”