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Breaking down the MIT $100K
If you are among those without a bank — either because of geography or economic issues — MIT spinout Dinube has a solution for you, as long as you have a cell phone.
The runner-up of the mobile track at the recent MIT $100K Entrepreneurship Competition, Dinube was launched in February by its four co-founders and current employees — CEO Jonathan Hayes, COO Oscar Howell, CTO Armando Valdes and Chief Software Officer Adrian Rodriguez.
The company has plans to remove bank cards from financial transactions by connecting customers directly with retailers through their cell phones. “By turning upside-down existing payment systems, we are able to generate revenues for the merchants as opposed to charging them like other credit cards or debit cards,” Hayes said.
A user would sign up for the service through one of Dinube’s retail partners and deposit $50 or $100 with the retailer. To make a purchase, they would send a text message through Dinube’s platform, which would deduct the amount, plus a small fee. Once Dinube has a pool of retailers, users would be able to make a purchase at any of them using the same deposits, Hayes said.
Dinube is in talks with a potential client, a Mexican retailer with locations across Latin America. “There is a 75 percent cell phone penetration rate in Mexico,” Hayes said. “Only 5 percent or 6 percent of Mexican towns have a bank. There is a huge group of people who have a cell phone and need to perform transactions.”
George Cooney, a partner at Summerhill Venture Partners, was one of the judges in the MIT $100K, and calls Dinube’s market — “the underbanked or unbanked in the developing world.”
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