Zevvle as a sustainable business

Zevvle Chat 🔥
#21

(Another Monzo payments engineer here, I’ve been maintaining our card processing systems for the past two years. :sparkles:)

In my opinion, there’s something even more valuable we got from outsourcing prepaid card processing - experience. We built a Mastercard processor in a year. I’ve told that to other people in the industry, and watched their heads explode. But that’s not only because we threw some of the best engineers I know at the problem - but also because we’d had a long time to learn from our outsourcing partner.

What do these message exchanges work? What’s the anatomy of a transaction, when you get down to the wire? And when we started to outgrow our outsourcing partner, we could also learn from where they were struggling.

The first documents may have been signed and the first line of code written after we got our banking license, but the first bit of Mastercard trivia was posted on Slack, and the first diagram scribbled on a whiteboard, probably on the day the company was set up.

We never would’ve gotten off the ground without the prepaid programme, not just because we could attract investors. The prepaid programme let us build a mature platform and an app around a third party, a whole ecosystem of the things that made us unique, rather than having to start by building the lowest common denominator and working from there.

It let us build fun features, put them out there, see which ones worked and which ones didn’t. And it let us build a community that let us know, loud and clear, when we were on the wrong track.

I’m going to be very curious to see how Zevvle handles this. But I think they absolutely can handle it, because they’ll have the same advantage that we did.

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#22

I think it was Jonas, Monzo’s CTO, who once said that even if all of our source code leaked today, we’d still have a reason to exist, because people can only copy where we are, not where we’re heading.

My high street bank now lets me freeze my card. I open the app, and I tap through a series of dialogues; it feels like I’m filing a “freeze card” form, and that’s probably effectively what’s happening on the backend.

That’s not because they can’t find good UI designers or app developers, who can make a toggle button and play a little frost animation over a picture of my card. They’ve thought about features in terms of forms for a very long time, they’re very good at it, and like any other technical decision, it was made for a reason.

To me, a millennial who grew up on the internet, time is short and forms are awkward. I expect anything which doesn’t have a confirmation, to be reversible. I can tap the “freeze card” button and see what happens. But if I lose both my card and my phone, I can’t walk into a Monzo branch and freeze it from there - with my high street bank, I can.

However, that’s just my point of view. My parents’ and grandparents’ generations grew up in a world very different to mine, and their expectations are different. Their banks made them a promise to hold onto their money when they were my age, and they’ve been honouring that promise, in largely the same way, ever since.

They expect every action they take to come with an explainer, and a confirmation, that makes them feel comfortable giving their consent. When their banks add a new feature, they add a new form, because they have promises and expectations to uphold.

In my mind, the advantage of a startup isn’t that they don’t think in forms - in 60 years, “thinking in REST” might be the new “thinking in forms”. It’s that they haven’t yet made any promises, and they get to choose which ones to make.

You can run a mobile network without stores, or a bank without branches, and replace them with a smartphone. It means there are some people you can’t reach - but you can promise more to the people you can.

(Apologies for the double post; I wasn’t sure if somebody would make another post by the time I’d finished this one. :sweat_smile:)

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#23

This is a valid point, but I think the legacy banks can (and do - see Mettle for example) work around this by setting up a new brand so they are freed from the promises and expectations set by the legacy brand.

I think the main problem with mobile (and why it’s a harder challenge than banking) is that the host networks are the only gatekeepers thanks to the government and the current rules regarding spectrum allocation preventing any competition in that space.

What Monzo and the other banks did is build on top of Mastercard/Visa, and they are lucky in that respect because those are not the blockers to a better banking experience (they would in fact benefit from it, since MC/Visa are happy to be the “dumb pipe” in the background and have no interest in a consumer-facing business) which is why Monzo succeeded.

In mobile, the data pricing and billing model (and potentially technical limitations of the host network’s infrastructure) is the main blocker so all MVNOs are bound by that, which gives the host carriers full control over their competition and the ability to “cut out the middleman” and replicate (or buy out) that competition if they see that their product sells better because they are already in the consumer space and explicitly don’t want to become a dumb pipe in the background.

In fact, you can see that with Zevvle where they tried to do something different (pay as you go pricing with no bundles) and were forced to backtrack because it wasn’t sustainable, which itself is purely because of the pricing and billing model (the carrier itself is enforcing data buckets, which is why they’re per-SIM and you currently can’t share the data allowance across the entire account) imposed by their upstream carrier.

This is probably why despite all the venture capital available out there (and being spent on various startups, including very stupid and unsustainable ventures), nobody has attempted to disrupt the mobile space at scale because unless you get billions of funding (to win the spectrum auction and then build your own infrastructure) you will always be at the mercy of the host carrier who push you out of the market the second you start doing better than them.

Edit: speaking of stupid & unsustainable ventures, I think WeWork has the same challenges as an MVNO. WeWork does not own the properties, it rents them, so they assume all the risk associated with the business but ultimately the landlords are the real winners and would be able to raise their rents when WeWork’s lease is up for renewal if they see them doing well, or try to replicate the model themselves with their inherent advantage (which I expected to happen if WeWork, you know, actually worked from a profitability point of view). The only long-term exit for WeWork would’ve been to make enough money with the current system to be able to buy properties and then make back their initial loss. In the telecoms world this would be equivalent to obtaining the spectrum license and building out infrastructure.

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#24

Very much in agreement here.

You find out very quickly where the pain points are, and figure out how to not make the same mistakes down the line. The v1 Mastercard processor was built in a year, but it was built on top of years of reading and experience with the prepaid cards.

This was the best part of early Monzo, and I’m sad that it was lost over time. :heart:

It was. Your true value is in your direction and your people.

There’s that “Skate to where the puck is going, not where it has been.” quote that I often think of that applies well here, by having good people making decisions and making bets, you can start going in the right direction, and you can do it faster because you don’t have legacy weighing you down to start with so can sprint right to where you think you need to be (though it’ll be expensive on your energy and you’ll need to repay that debit before you can continue).

The benefit here is that the majority of people using a phone network are going to need a phone, and phones need a network. How you solve a circular dependency of needing a phone to buy a phone or pay for service will be a fun one to solve without retail stores though. :stuck_out_tongue:

Before Monzo, you had to spend forever in a branch to open a bank account. Monzo turned that into a couple of minutes in an app (at best, sure) and you immediately have an Apple Pay/Google Pay card. Having recently been through a certain large UK carrier’s in-store onboarding where everything was so many forms, systems, and paperwork that got messed up to the point where I had to file formal complaints and provide pages of evidence to resolve, there is a huge room for improvement here. :grimacing:

Imagine a world where you have your current SIM in an iPhone, go through the Zevvle signup process, load an eSIM beside your current SIM, and through Ofcom’s SMS switching requirements, immediately start using it, then when you’re happy to switch, kick off the number porting process from your old provider in just a few taps with a pre-filled SMS link and a box to type the returned code in.

I think eSIM, VoLTE/WiFi Calling, Ofcoms switch changes, and RCS can be transformative to Zevvle in the same way that Apple Pay/Google Pay, changes to the rules on banking app APIs/cloud usage, The Current Account Switch Service, and more was to Monzo. Yes, these things exist and are implemented by the bigger players but it takes someone new and willing to take risks with their own technology stack to take full advantage of them. :heart:

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#25

I think this is a bit optimistic. With regards to eSIM, the existing carriers have a network of branches all over the country (some are in-house, some are outsourced to franchises, some with partners like Carphone Warehouse). It would cost thousands of jobs and thus be a very bad PR move for them if they suddenly modernized the system by pulling the rug under those and made it “too easy” to sidestep them, whether it’s through their own offering or an MVNO.

I agree that there is huge room for improvement, and all these jobs need to go. They’re on borrowed time anyway, considering modern phones are so good that they last much longer and the premium handset makers (Apple and Samsung) are opening their own shops. However, I don’t expect them to go without a fight as there are too many people whose paychecks depend on these shops existing and things being the way they currently are and some of these people are also the decision makers whose cooperation is required if you want to make changes.

I definitely don’t expect Zevvle to be allowed to pull off what you’re saying anytime soon. It would be irresponsible for the carrier to let a competitor brand have the spotlight on such a user experience breakthrough. If this were to happen, the carriers will do it first and MVNOs will be in several years later maybe (for example, MVNOs still don’t have Wi-Fi calling despite it being “boring” and normal now and no longer a new and hyped up feature), and as I said before I don’t think the carriers are too keen on pulling the rug under their shops by making the online UX too good.

Monzo didn’t have this problem because they didn’t need any help or cooperation with the existing legacy banks beyond what’s required by law (which is just payment interoperability). If Monzo needed the legacy banks, went to them and said “hey we’re gonna make this amazing app that’s gonna remove the need for all your branches, plus it’s cheaper than your offering and easy for customers to switch over, wanna help us?”, do you really think they would’ve had any kind of positive response?

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#26

With de- and re-activating SIMs (coming to the new data plans soon; works with the older tariffs); that instantaneous feedback is the gold standard. Unfortunately being out of the data/call/sms flow means we’re totally reliant on our supplier and EE, so it does take a few minutes.

Call me ridiculous but I’m optimistic it doesn’t have to stay that way. With the right people + the effort + a movement, if Ofcom are really about competition they’d be open to a different model; maybe a pay-for-what-you-use spectrum free-for-all, or something at least to lower the entry barrier.

eSIMs are the only real blocker here; the tech exists and already works with IoT SIMs. Our UX could do with a real designer though… in fact the SMS link flow could be a lot better already; I’ll set some time aside for that.

Number porting could really do with an overhaul as well; in Belgium it happens within seconds for example.

Those 2 are actually unrelated — it being unsustainable and an imposed billing model. Wholesale we do pay for per-SIM data buckets, but our billing is completely separate and free as a bird. E.g., our supplier don’t have add-ons or rewards; that’s something we’ve setup. Account-wide data is effectively the same as the previous PAYG model, but with less uncertainty and risk.

The reason for not doing it immediately was to get up-and-running quicker, plus get some experience with the bundle model. There were a few times when implementing the data plans I thought “This is awful, a shared plan would be such a better experience” so yes, we will do it! We need to spend some more time thinking through the pricing; not sure we got it right when we suggested shared-plans the first time. :sweat_smile:

Sky seem to be the only MVNO with Wi-Fi calling (and Visual Voicemail, according to Apple at least). I’m not sure whether that’s O2 letting them or Sky putting in the effort; maybe a bit of both?

I can say that with Virgin leaving BT, their MVNO arm is getting more attention, soo… watch this space!

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#27

I remember being interested in Monzo not super early, but still early-ish… it definitely changed a lot. I opened a new account with Lloyd’s today (who I left a couple years ago). I kinda needed another bank account anyway as Monzo doesn’t officially support payments from my employer (and that’s not something I want to be unsupported by my bank!), but… yeah… it was time. I’ll keep Monzo around as another account, but it lost most of its magic. It’s just another bank, albeit a better-designed one than most (really, Lloyd’s, I need to wait for a letter in the post to use online banking? Really?).

I signed up for Zevvle not because I need another SIM - I don’t. But I do want one. Not because I could afford to switch my main phone number over - Zevvle is far too expensive for that. But because the developer aspect and experimental nature enticed me. That’s something really valuable it’s important not to sacrifice in the name of growth.

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#28

Wasn’t the current system - requesting codes via SMS and one day switching - only introduced less than a year ago?

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#29

Isn’t that just for the front end process? In reality, the UK doesn’t have ‘true’ number portability (i.e. all-call query).

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#30

Yep it was updated last July (Ofcom had a field day). I believe next-day switching existed before that, but it was more about improving the existing system by getting rid of notice-charges and not having to contact the network for the switching code.

It’s still a bit obtuse with how long it can take and the unpredictability, i.e. what time exactly will the number change? It’s understandably stressful :confused:

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#31

I know at least one carrier where number porting on their side involves an email (and possibly Excel files) being exchanged manually. I wouldn’t be surprised if this was the norm.

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#32

I feel obligated to say, it could be worse - it could be the Swedish system, in which you until just recently had to snail mail your new carrier a power of attorney, and then had to wait close to a week for them to faff about with it.

(Recent improvement: You can now give the power of attorney online, and it only takes three days! Each of these is individually true… some of the time!)

#33

I think with the recent news @Monzo might have some going spare?

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#34

At least at the end of it you’ve actually transferred your number, unlike here - where it’s just forwarded forever.

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#35

Came across this blog article today from the owner of SourceHut, which instantly made me think of this topic. :smiley:

Our model is customers first, investors never

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