Dropp is a “pay per use” small-value transaction platform. It’s designed to make purchasing small-value goods and services secure without signups. Founded in 2020, the FinTech StartUp enables the “Pay-per-usage” model.

Headquartered in Newark New Jersey, the startup provides merchants with cloud-based data API, market data feed, and IoT sensor data.  Businesses can leverage this platform to offer their services in smaller increments.

InvoNews sat down with FinTech StartUp Dropp CEO and founder Sushil Prabhu to find how Dropp is helping small and large enterprises with its Fintech platform and changing the ecosystem of the fintech landscape.

Sushil, Tell us a bit about Dropp?

Dropp solves a unique problem for digital merchants who are looking to offer consumers small value goods and services under $20 dollars without paying exorbitant payment transaction fees.

Consumers are looking for cheaper ways to buy services, especially an alternative to flat-fee subscriptions. Dropp designed this cost-effective platform for consumers and merchants leveraging new innovative distributed ledger technologies and traditional regulated banking technologies.

This new platform that uniquely supports purchases in both FIAT and Crypto has opened up new monetization opportunities such as micro-royalties, micro-subscriptions, micro-donations, pay by usage, and more.

We believe there’s an untapped macroeconomy in microtransactions that would benefit both consumers and merchants. This new micro transaction-based economy will be a lot more inclusive and will include a much larger population of consumers that were previously left out of the digital economy.

Dropp is the world’s first affordable micropayments platform built to enable pricing flexibility and drive growth. This means merchants can use revenue models that were previously not profitable. Merchants save money and grow their business, while consumers get convenient access to products and services to enrich their lives. It’s a win-win.

Is there any specific reason you named your startup Dropp? We just want to grasp the idea behind this name?

We named our new company “Dropp” because similar to raindrops that fill a river and bring all sorts of prosperity, small payments quickly add up and result in immediate positive growth for digital merchants.

We believe these small “Dropp” based payments could level the playing field for merchants as they compete against the mega-size digital firms.

Note: the extra “P” in Dropp is because we could not get the “Drop” trademark.

The digital economy has been growing exponentially in the last 20 years. The internet and the cloud leveled the playing field giving everyone a voice, access to content and making it really easy for every startup with an innovative digital concept to launch a new service.

But even with this enormous growth digital merchants continue to use only two ways of monetizing goods and services: “Subscriptions” or “Digital ads”. Both these models require a merchant to make significant capital investments to acquire customers.

The “Digital Ad” model works very well once your service or website is popular. The subscription model, another very successful popular model requires you to convince a subscription fatigued customer base to make another financial commitment.

Each of these models is a tall order for a startup. We believe a “Pay-Per-Use” or pay for what you use model enabled by Dropp’s micropayment platform where a customer only pays for what they use and does not have to commit to a subscription is a lot more appealing and an immediate revenue-generating model.

Tell us about yourself Sushil? You were CEO of Open Crowd for 16 years and now you have started Dropp. Walk us through your extensive journey of 30 years as an entrepreneur?

I’ve been a technology leader, innovator, and entrepreneur for the past 30 years. I have been the CEO of OpenCrowd for the past 16 years, and now for the last two years, I’m the CEO of Dropp.

As CEO of OpenCrowd, my team and I dedicated a significant amount of time assisting investment banks and early startups in creating innovative products utilizing emerging technologies and new business concepts. Before launching OpenCrowd, I was Chief Technology Officer (CTO) of Scient Inc, starting in 1998 as part of the initial Management Team.

In this role at Scient (now Razorfish), I delivered enterprise e-Business solutions for several leading financial services companies worldwide. I played a critical role in helping grow the company to over 2,000 employees in less than three years, growing to an $8 billion market cap. Scient became the fastest-growing internet professional services company of the late 1990s.

I was also responsible for architecting one of the earliest internet-based Peer-to-Peer payment systems for a top global retail bank. Before Scient, I was the Director of Technology for Cambridge Technology Partners (CTP), the most successful Client-Server, Fixed-Time, Fixed-Price Services company in the early 1990s.

How does Dropp support small businesses and startups?

Dropp is the world’s first affordable micropayments platform built to enable pricing flexibility and drive growth. It makes small-value transactions affordable.

Dropp’s platform makes it economically feasible for small business merchants and startups to offer a compelling and affordable purchasing option for consumers.

Merchants who use Dropp can access an entirely new consumer segment who can’t afford or are oversaturated with subscriptions. Bloomberg has compared the current state of over saturation of subscription services to a game of stacking blocks where customers only add so many more subscriptions before they remove others.

Subscriptions are still a viable model, but all signs point to the need to augment them with pay-as-you-go. We believe there is a real need in the digital market to offer an alternative monetization model. Dropp offers this alternative model of “Pay per use” that will significantly benefit small businesses and startups as they compete with the incumbents.

In the physical world, Dropp is an alternative to carrying cash or using a credit card. Consider Dropp as digital cash made for small payments at parking meters, tolls, or even at an EV charging station. In general Transactions below $20 are expensive for merchants. Dropp makes it cost-effective for merchants and very convenient for consumers.

Through Dropp, consumers can acquire access to goods and services previously financially unattainable. The US’ obsession around credit and credit cards is a severely polarized payment system that disproportionately excludes consumers who don’t use credit.

For reference, in 2018 alone  42% of payments under $10 were made with credit and debit cards. Dropp’s solutions are created with the vast inequity issue in mind. Credit cards highly influence the current merchant-fee structure, which kills the profit margin for small-value transactions and requires many merchants to end up paying nearly 40% in fees for each transaction under $1. On average, Dropp is over 25x cheaper than current credit cards for transactions under $1.

Dropp turns customer micropayments into a viable money-maker for merchants that the current merchant-fee structure doesn’t provide. Dropp is the first platform to bypass the high-fee credit back end. 

Dropp is a “pay per use” small value transaction platform? Can you explain this to our readers?

Dropp designed its pay-per-use transaction platform with consumers in mind who want to purchase small-value goods without sign-ups. Dropp’s platform is explicitly designed for ad-hoc purchases as a substitute for credit card payments.

Dropp’s simple “pay per use” capability is a good alternative to the only two monetization options that merchants currently have: charging flat fee subscriptions or implementing digital ad-based revenue.

Dropp is a solution for the vast subscriber fatigue plaguing consumers. We believe this new “pay per use” economy will enable purchases of products and services in small increments that the consumer can decide for themselves.

Imagine renting a single movie for 50 cents, or playing a single video game or even purchasing a 5-minute exercise video from a private instructor or activating an electric scooter and only paying for 20 minutes of use, without a subscription or being able to pay $1 to a parking meter from your connected car’s dashboard or accessing a gym on a business trip, where you pay $5 just for using a Peloton for 30 minutes.

This micropayment approach empowers customers with much-needed pricing flexibility that credit cards don’t currently provide and offers a more affordable option to the general population.

How did you come up with the idea of establishing Dropp?

The journey and the timing to launch Dropp have been in the making for a while. In early 2000, I architected and launched a Peer-to-Peer payment platform for one of the top retail banks.

Over the last 17 years, as founders of OpenCrowd, a FinTech innovation company, we developed a wide range of FinTech products for large investment banks and early startups. My focus has been primarily on building distributed ledger technology (blockchain technology) based on FinTech products in the last five years.

Dropp, the micropayment platform, is a spinout of OpenCrowd. The concept of micropayment has been talked about for the last two decades. We believe the timing is right to offer such a service as there is a real consumer need and the technology is ready. In the last few years, the digital economy has had exponential growth.

We continue to see new services being offered every day. But there is a limit to consumers’ appetite for subscriptions. Any more change for emerging digital companies that are trying to compete with the incumbents will have to come from new purchasing options. “Buy now pay later” services and their success prove that there is always a need and appetite for new purchasing options.

Additionally, privacy is also playing a pivotal role in consumer decisions on the use of services. Digital ads and other methods of attracting customers to use services are becoming problematic. In many digital purchases, consumers would want to stay anonymous or limit sharing of data.

One of the other factors that led to our decision to build and launch a micropayment service was the new possibilities offered by emerging technologies. In the last few years, distributed ledger or blockchain technologies have made payments easier as the ledger is specifically built to track the transfer of value and ownership.

But in many distributed ledger or blockchain platforms, the transaction cost is very high, and the throughputs are anemic, making it impractical for microtransactions. Fortunately, we were involved as the development partner of Hedera Hashgraph, a unique public distributed ledger network known for very low latency, high throughput, and low transaction costs.

Consumers are demanding “pay per use,” privacy, and convenience with their digital dollars. Consumers continue to demonstrate that they are happy to skip the frills and just pay for precisely what they need. Merchants are looking for alternative revenue models and continue to look for new approaches to acquire new customer segments as the competition heats up in the digital sector.

The technology required to enable microtransactions has matured in the last three years especially with blockchain/distributed ledger platforms. All of these factors influenced our decision to launch Dropp.

As an entrepreneur what do you think is one thing a startup should have in order to succeed?

Your concept or vision should be something that appeals almost instantly to your relevant audience. The success rate is higher when the problem that you are trying to solve is a problem that your customer base is currently facing. When we shared the concept of micropayments that can enable “pay per use” options to consumers as an alternative to subscriptions it resonated very well. In fact, after every sales meeting, folks continue to have merchants reach out to us with new use cases for micro-payments and how it will benefit the masses.

Do you agree with the statement that Fintech possesses the potential for financial inclusion?

Yes, completely – All the advancements in technology including blockchain, digital currency, central bank digital currencies, and many AI technologies detecting fraud, etc are all trying to include the unbanked, underbanked, or the population that has currently no means to borrow or be a part of this enormous global digital economy.

Internet, Smartphones, Blockchain, Digital currencies like Stable coins, and the introduction of micropayments are all financial inclusion enablers. In the next five years or so every person with a smartphone and a digital id will have access to the same privileges as one with a bank account.

Do you think that financial technology is disrupting the banking system?

Absolutely, the internet disrupted the banking system in early 2000. But now as we see more new internet-only or online banks being launched it is definitely disrupting the banking systems.

Fintech is not only about being better, faster, and cheaper. New services like “Buy now pay later”, online lending, community-based borrowing, instant cross-border remittance … many such services are being shaped in the Fintech world and influencing the banking roadmap.

Do you think there are disruptions occurring in the banking industry due to the pandemic and seismic shifts in consumer habits?

As with many other industries, COVID-19 has exposed the need for a digital transformation in the legacy banking industry. Limited face-to-face customer service during the pandemic may have challenged customers’ faith in the centuries-old institutions. 

The result: the accelerated opportunity for emergent FinTech solutions and a willingness among traditional financial institutions to test and trial strategies that leapfrog established practices.

The number of financial brands which have quickly adopted digital innovations such as blockchain, mobile banking, and AI customer support in the past year has accelerated dramatically.

These disruptors encouraged the seismic shift in the banking industry by appealing to customers with lower costs and intuitive transactional processes. Newer technologies also guarantee transparency, privacy, security, and minimization of risk.

Walk us through your journey in the development of Dropp? Tell us about your struggles while establishing Dropp? How did you gather your team? Did you hire locally or preferred off-shore developers?

We came up with the concept of micro-payment for digital purchases in mid-2019 while  I was the CEO of OpenCrowd. At OpenCrowd we had then recently launched a platform called DragonGlass. A blockchain explorer that gives you instant access to data generated in Hedera Hashgraph (a distributed ledger platform). Dropp micropayment is built on top of DragonGlass.

In early 2000 just before the pandemic, we came out with the first MVP. After the success of the MVP we spun out Dropp as a separate entity and many of us including some of the team members moved to this new startup. 

Our first major challenge was a non-technical one, trying to figure out if we are a money service business and what kind of type of money transmitter license we need to operate in the US.

After some serious guidance from one of the top law firms specializing in banking, we had to re-architect our system to ensure compliance. This was quite a lot of work.

The other challenge being an early startup was to open a bank account to operate and hold our customer’s and merchants’ funds. We were finally approved in early 2021.

As we got closer to launch we had to work with the major app platforms to ensure we were operating within their guidelines to launch our mobile apps. The pandemic was another challenge as all discussions and design sessions were virtual. Working remotely helped us in some cases as the commute time in NY/NJ is really long.

Working remotely saved us a lot of time especially in the winter when there are frequent disruptions because of snowstorms etc. But it was really challenging having brainstorming sessions on a video call. We had them very frequently and this was the most difficult aspect of the pandemic.

A lot of pre-planning, notes gathering, and replaying previous meetings helped us. Digital technologies do help. But it is not a complete substitute for meeting in person. We have mostly local resources and a few off-shore programmers.

Do you plan each and every step in your life or do you just prefer to go with the flow?

There are no typical days for a startup that recently launched a significant platform. I spend a lot of time organizing and planning to stay ahead of the game and keep us on track.

In the end, customers largely influence the day. But to maintain some degree of normalcy and to keep sales, marketing, support, engineering, product cycle, etc., on track, I have allocated specific time slots on the calendar to meet every week with each group.

For example, we have a 9:00 am mtg every morning with the engineering team daily no matter what.

I plan all my activities for the day early in the morning (6:30 am) before our first standup mtg at 9:00. Most of my planning for the week typically happens on Sunday evening, getting ready for the week.

Depending on the day a typical day includes meeting with potential merchants, lots of Zoom discussions on new product features, meeting with potential investors, or meeting with possible alliance partners to extend the product reach.

A typical day during mid-week will include working with the team to create social media outreach messages or being interviewed by the media. Lately, a typical day also consists of many recruiting activities as we are hiring to build up the team.

Where do you see Fintech in the next five years?

First of all the term “FinTech” like the term e-business from the ’90s will become a term of the past. All aspects of finance will utilize automated technologies or will not be able to compete. In the next 5 years, technologies like AI, Blockchain, Digital currencies, DeFi will play a central role in all aspects of finance. DeFi (decentralized finance) and CeFi platforms will merge.

We will see very soon some of the cutting-edge technologies in the DeFi world influence the CeFi market. Once the crypto market is offered a regulatory framework many of the traditional financial institutions will rush to adopt digital currencies or at least try out the underlying blockchain platforms to offer new digital services. 

How do you think financial technology can help the developing countries in the conversion of people from informal to the formal economy?

Financial technology solutions will help developing countries in their transition from informal to formal economies by making goods and services, especially digital goods and services more cost-effective, accessible, and consumable to people of all walks of life and income levels.

Dropp will help in this transition as it facilitates these very attributes at the core of its platform. Blockchain technology also has the promise to both raise transparency and privacy for transactions conducted on-chain.