Clever Kealan
After a survival pivot, Kealan Lennon is an evangelist for digital token payments. They suit gift transfers but there are wider business applications too, writes Nick Mulcahy
paper cards were jettisoned as the venture went all-digital. Engagement was massive – in the hundreds of millions, according to Lennon – but monetising digital greetings was another matter. Then in 2015, on an Enterprise Ireland trade mission to China, Lennon discovered the way out of his cul-de-sac.
Like in Europe, the Chinese were moving away quickly from cash transactions. Unlike in Europe, they weren’t using plastic debit cards for the transition but their mobile phones. More specifically, the digital wallet in their mobile devices that effects purchases and fund transfers without the requirement for a bank account.
Lennon sensed an opportunity. The CleverCards digital greeting cards were cute, but the Irish startup was operating in a global arena dominated by US giants with bottomless pockets. With digital payments, CleverCards could pivot away from the mass market and into the business space, starting with gift cards but hopefully with a lot more to come.
Lennon sold the idea to his board and investor fan club and set about charting a new direction into payments. It helped that down the road from the CleverCards office in south Dublin was the global innovation centre for Mastercard, led by James Carroll.
What Lennon wanted to develop was a pre-paid digital debit card that can be issued to a customer or employee’s phone through SMS, email or WhatsApp. Carroll provided a sympathetic hearing, as Mastercard had just the solution CleverCards was looking for — tokenization.
How this works is that the CleverCards platform enables a user to configure and purchase a virtual electronic token in the form of a unique digital code representing monetary value chosen by the buyer. The buyer sends the token to a recipient in the form of a link, and can choose to add a personalised message. Sending this link can be effected by email, messaging apps, SMS, and in print too.
The recipient exchanges the value of the token for a digital prepaid Mastercard. By adding the card to a compatible mobile wallet, the
Lennon made the most of having Mastercard as a neighbour in Sandyford
individual can shop online or in-store at selected retailer websites. When the token is activated at a merchant, the Mastercard gateway associates the token with the card payment data and submits it for authorisation and settlement.
The first manifestation of the new technology was CleverGift, unveiled in 2018. This sits on the CleverCards platform and facilitates the dispatch of contactless gift cards. No more plastic or paper vouchers, instead a store of credit on the recipient’s mobile phone, redeemed at retailers who accept the digital wallet payment method.
The concept found favour with AIMlisted Appreciate Group plc, one of the UK’s largest intermediaries for gift card and gift vouchers. Chief executive Ian O’Doherty wanted to move with the times and adopted the CleverCards platform. According to Lennon, the Appreciate deal means CleverCards technology is available to use in-store at c.6,400 UK outlets.
Lennon is convinced that the CleverCards token offering has much wider business applications beyond gift cards. He sees CleverCards as having a role to play in the property rental sector, making it easier for landlords to facilitate instant tenant payments. He believes the payment technology also has applications for retail loyalty cards and accountancy software providers. At the national level, Lennon muses that processing child benefit or other welfare benefits payments through a card could ensure that the payments are spent only in Ireland.
Kealan Lennon has some smart guys in his corner as CleverCards seeks to expand. Alan Coleman, who flipped BriteBill, and Jimmy Murphy, who made a fortune when he sold Lifes2Good, joined the board of holding company KPTRS Investments Holdings Ltd in May 2018.
The pandemic has accelerated CleverCards’ opportunity, as it brings virtual solutions to the fore. Lennon says that in 2021 the company’s issued payments volume could reach €100m, though that will require more people for sales, support, compliance and tech back-end functions. He adds that he’s very confident of completing a €10m fundraise early in 2021, with the purpose of expanding the staff complement by c.50 people.
“Our rate of acceleration is very impressive and we don’t lack for ambition, but it needs to be steady progress,” says Lennon. “You need to make sure you do things in a steady fashion and that you don’t fall over. We have a very supportive investor base and some very interesting strategic and venture partners.
“The next big thing in the payments space, maybe in a few years’ time, is going to be identity. Regulators around the world are cracking down on anonymous, prepaid cards, and we’re geared up for that eventuality.”