The Product
The User Story
Product
Merchant Payment Mechanism
Campaign Platform & Business Intelligence
P2P (Person-to-Person, not Peer-to-Peer)
Digital Coin Creation
Deals & Communications
Ordering From the App
Honey Network
Virtual ATMs
The User Story
The best way to describe Honey is to walk through a user scenario. A Honey user (let’s call her Susan) is picking up take-out food at her favorite Thai restaurant and pays for her food using Honey. The payment mechanism is simple. The Thai restaurant creates a QR code from a mobile device (or POS system). Susan scans the QR code using the Honey app. The app displays the data and asks Susan to confirm the amount and vendor. Susan then confirms the payment, and the money is moved from Susan’s account to the merchant’s account. As you will see below, we do not use the Mastercard or Visa rails to process this transaction. Instead we use the banking system to process and move money (more on that here).
Two weeks later, the same Thai place is having a slow Monday and would like to drum up business, so they turn to the Honey app. In the app, they conduct a campaign to reach all their customers (including Susan) that have ever used Honey to pay at the establishment by offering them a timed BOGO (Buy One Get One) promotion. The merchant creates the parameters for their campaign and launches it directly from their mobile device to drive revenue on an otherwise slow Monday. As you will see later in the document, the campaign parameters are extensive.
Product
Merchant Payment Mechanism
Our merchant payment mechanism is QR code-based and requires both merchant and user interaction. This is important to note as users and merchants both require a physical confirmation process that NFC (Near Field Communication) does not provide (which we believe has led to a lack of control & trust). Honey does not require special hardware and uses our “proprietary” banking rails to execute and process transactions. Our method is very much like the way Transferwise moves money overseas using reserves. We developed this system to increase transmission speeds, reduce costs and generally control all aspects of the transaction. It’s straightforward and easy to use for both the user and the merchant.
Campaign Platform & Business Intelligence
Our merchant platform is easy to use and designed to be accessed from a mobile device. With a series of drop-down menus, SMBs can drill deep into data to get an exact campaign match. For example, a Thai restaurant can drill down into how many vegetarians are within 2 miles of their business that like Thai food, but haven’t ever visited their store; they can then use this data to explore building out a veggie menu or send a message to users that they are promoting a new veggie-friendly menu that evening. It’s important to note that the merchant never has direct access to a specific user. In this case, they will see how many users match their query and they will have the ability (if the user has provided it) to send them an in-app push notification.
P2P (Person-to-Person, not Peer-to-Peer)
P2P (Person-to-Person), while not a viable stand-alone product, is the backbone to any successful payments network. A network that only deploys P2P or mPOS (mobile Point of Sale) will be a niche player. Apple and Square realized this after failing to attract large customer bases early on. P2P builds numbers – and massive amounts of them. We tie unique P2P measures to Honey. Ubiquity is important to creating an effective payment ecosystem, and we believe it starts with bringing Mobile Point of Sale (mPOS) and P2P together.
We take a unique privacy approach and believe transactions should remain private, so in many ways, our P2P mechanisms work exactly opposite to Venmo. Our P2P starts with our signature Handshake technology that enables two strangers to exchange money simply by shaking their phones (yes, we do deploy a confirmation process) without exchanging user IDs, phone numbers or email addresses. This is great for tipping, Craigslist purchases or when a user just doesn’t want another person to know any of their Personal Identifiable Information (PII). Some have called it “StrangerPay”, but don’t make the mistake of thinking that a private transaction is an untraceable one (Honey’s AML policies – and U.S. regulations - will not allow that) as we know exactly who made what payment, where and to whom.
We also enable people who are not in proximity to each other to exchange money simply by going into their contacts and selecting the airplane next to their name.
Digital Coin Creation
This is a unique product built into the app that enables users to mimic cash by creating a one-time-use QR code, that we call a “financial token.” The user simply enters the amount they want the token to be worth and then selects “create.” The token is good for 72 hours, and the user can text, email or print the token to be used by anyone, anywhere in the Honey ecosystem. It’s a bit like printing money, as tokens are not coded to a particular user. The first person to process the credit QR code is the new owner of that money. This has many use cases (including enabling people to accept money without having the app) beyond what we will address here.
Deals & Communications
When a user pays a merchant, they are agreeing to get deals from that merchant. The deals come in via an in-app push notification. We believe users will use Honey to get deals from their favorite merchants. If they decide later they don’t want any communications from that merchant, they swipe left; if they like the merchant they can favorite them by swiping right; should they want to delete the deal but continue getting deals from the merchant, they can swipe a U-turn; if they want more information or want to order from the interface they simply select and hold.
Deals are time-sensitive, from their favorite merchants and are well-timed, so we believe users will snack on Honey often. We should mention that we have ZERO intention of letting big box retailers participate in this capacity. Small merchants know their community and can target specific behaviors. Few big-box retailers think locally – though, we have seen BIG signs from some such as REI and Walmart that show that they are starting to understand community.
While much of our communication originates from the merchant to the user, we will enable interpersonal communication to allow users (should the merchant agree) to communicate with the merchant. For example, a user could message a salon that they are running a few minutes behind, or perhaps add a manicure service at the last minute. People prefer text to voice, and we believe this will prove to be an invaluable tool for users.
Ordering from the App
Some call this the makings of a super-app. Yes; we intend to enable our users to order food or products to be picked up using the app. We will use call-to-action buttons to enable people to take advantage of a deal. A good example would be ordering tacos from the taco truck during lunchtime and stopping at the pickup window to retrieve your order without having to stand in line.
Honey Network
As we said above, we move money in a way that significantly reduces costs, decreases transaction times and makes settlements instant. Our network will go through several iterations before we get there. We will start by using some traditional legacy tools and will work our way towards creating an intra-bank network. The intra-bank network will enable Honey to move money in a way that is domestically incomparable to anything out there. We have already had some preliminary unsolicited interest from other apps and some large organizations to license access to our network, APIs and platform. See How Honey Moves Money for more info.
Virtual ATMs
Merchants are always looking for a way to increase foot traffic. Banks now charge many merchants to deposit cash at night’s end. To solve these problems, we will turn participating merchants into virtual ATM machines for users. Merchants get foot traffic and can save up to 3% on their money. Early feedback on the concept has been positive.
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