Person-to-person payment services haven't always fared well, but a year-old French startup, Flooz, thinks a P2P app can succeed in its home country if it has the right interface and steep social barrier to entry.
The Flooz app, which is currently available only for the iPhone, is similar to PayPal's Venmo. Both apps function like social networking sites, enabling users to post comments and emoji ("smileys") with transactions. But unlike Venmo, only a limited set of people can use Flooz.
Right now, consumers can use the app if they request and receive an invitation from Flooz or if an existing user invites them.
"I think French people have a reputation of being quite pretentious; we love exclusive things," said Marine Pastor, marketing and communication manager at Flooz, which is based in Aix en Provence. French consumers "need the social perspective but also the club perspective."
The app, which launched Dec. 16, will soon be updated to allow its current users to invite their friends through a streamlined sign-up process and will remove the option to request an invitation directly from Flooz. The invite-only system also reassures people that the profiles in the app come from legitimate recipients, Pastor said.
Flooz is targeting millennial consumers, between the ages of 18 and 24. Currently a couple hundred consumers have started using Flooz, which enables transfers in real time.
"The relationship French people have with money, we don't like to talk about money; sharing your payments where people will be able to see them is not very common," Pastor said. But the company thinks millennials, who grew up in the Internet era, are ready to break that tradition, she said.
Flooz has competition in the French market from Lydia and S-money. Lydia is a mobile wallet that uses QR codes to allow consumers to send and receive funds from a linked credit card or bank account. The app also allows consumers to request money via text message and send money via email.
S-money, a subsidiary of banking group BPCE, is a mobile payment app that allows users to link their Twitter accounts to make payments over the social feed. Users can send a payment by tweeting a message to @SmoneyFR with the hashtag #envoyer ("send" in French), an amount and the recipient's Twitter handle. This is similar to the way services such as Dwolla, Chirpify and ChangeTip work over Twitter.
S-money users can also send funds to others without Twitter, using the recipient's S-money username, an email address or phone number.
Representatives from Lydia and S-money did not respond to requests for comment. Pastor said these mobile apps haven't seen too much success (in the U.S., payments-only apps and Twitter-based payment systems have had similar difficulty).
Because Flooz is focusing on P2P and building a community, the company expects to fare better than its rivals have, Pastor said. In a year or so, Flooz hopes to have a big enough community that it can pitch the app to merchants, starting with e-commerce. Flooz does not charge a fee to consumers, but it plans to charge a fee to merchants.
Rentabiliweb, a payment solution provider, is Flooz' main partner, helping the company handle legal and regulatory issues. Hevea, an independent portal for stock investors, is financing Flooz.
Many other companies are betting that social media will mix successfully with payments. A "Buy" button went live on Twitter in September; a screen grab of a Facebook P2P service began circulating in Silicon Valley in October; and SnapChat unveiled a P2P payments function in partnership with Square in November.
The five-person team at Flooz is a well-traveled group, said Pastor. "We've seen our neighbors using technology we don't have access to," she said. "We want to enjoy the same [payments] benefits; Flooz is our little step to catch up with Europe and the U.S."
The name Flooz has some baggage in the U.S. Flooz.com, along with other companies like Beenz.com, attempted to create alternative currencies for e-commerce during the dotcom bubble. Most notably, Flooz.com had an $8 million marketing campaign featuring Whoopi Goldberg and ads in The New York Times. Flooz.com launched in September 1999 and had apparently vanished by mid-2001. (The French company's domain name is Flooz.me).