"It's a seamless way to split the bill - as opposed to antiquated ways like sending money, or IOUs"
Startups around the world are jumping at an opportunity to simplify the bill-splitting process. While the method of how we pay has improved vastly over the years - the way in which we split the bill is as much of a cultural problem as it is a technological
one.
When attempting to solve the problem, a startup must ask itself - How should the bill be split? Does my software need to integrate with the merchant's POS? Do I need to work with the card issuer? How much extra work is this making for the customer? Is it
even worth it?
Rob Ianelli and Paul Cheek, CEO and CTO of Dutch have an answer. Dutch sees itself as a consolidator, a streamliner. Not just for paying restaurant bills, it speeds up the whole process of group transactions - and brings a social media aspect with it too.
Some bill-splitting apps work like a glorified calculator, they take your receipt and spit out a number informing you of your share to pay. Others tackle the payments part by integrating with a merchant's POS and removing the process of giving the waiter
multiple cards at the end of a meal.
Dutch is different. It doesn't require participation from the retailer. A person signs up to Dutch with their card and invites their friends through Facebook. When a group bill is paid for, the lead cardholder pays, gets charged the full amount, and the
others involved in the transaction automatically pay the lead cardholder a split of the bill.
It's easy to see why Dutch benefits the merchant - in a restaurant scenario, a waiter only deals with one card - saving time and transaction fees.
Dutch performs an equal split on the total bill. If it's a $400 dinner bill between 4 people, the lead cardholder pays $400 and receives $100 each from his 3 friends.
To assist in the transaction-routing process, Dutch are teaming up with MasterCard's inControl. Card details are sent to inControl and then routed to Dutch's servers so that it can associate the charge with an open group, split the amount and charge each
joined member their portion.
Dutch doesn't try and calculate who might owe the most in a restaurant bill. While some apps will - Rob and Paul don't believe it's the correct path to follow.
"We don't like that model - there's a social awkwardness trying to make those calculations and millennials don't want to do math," says Rob.
'What about the older generation who enjoy paying by cash and don't engage with social media as actively?'
I ask. The short answer is 'It doesn't matter what they do' - Dutch really isn't designed for those who are stuck to cash.
"A product for everyone, is a product for no-one," explains Rob.
The Dutch social-media strategy integrates invites with Facebook and includes a 'social payment graph' whereby users can chat about their group payments on Facebook.
I'm impressed by the maturity of Dutch's founders despite their youth (Rob is 28, Paul is 22) as well as their willingness to tackle a traditionally complex sector.
"It's terrifying and exciting - we have no fintech background - and nobody wants to get into fintech."
Despite the high barrier to entry, Paul's technical background and confidence puts him in a good position to tackle the regulatory pressure facing him.
"At its core, Dutch isn't complex - it works on the same premise as a relational database, splitting one transaction into multiple - the challenge is the regulation, the permissions, the legal and the compliance"
Dutch is planning a beta launch for Q1 2015 - right now they're building relationships with the card networks to get the traction they need. On top of this they have a patent pending to get ready for their US launch.
Enjoying a meal, planning for an event, making a group purchase. These are all experiences to be enjoyed, experiences hindered by the clumsy act of splitting the bill. An elegant solution is needed and Dutch is in a great position to relieve this headache.