All right, Joachim, should we start?
[Foreign Language]
Yeah.
[Foreign Language] Oh, sorry, we should be in English. Yeah, I'm ready if you are, so-
Yes, let's go ahead. Good morning, and welcome to this webcast together with Crunchfish in connection with the company's report for Q3 2023. I am joined by the company CEO, Joachim Samuelsson, to discuss the report and the company's current situation. My name is Filip Stenberg, analyst at Västra Hamnen Corporate Finance, and I will be your moderator today. As usual, I highly encourage you to send in your questions using the Q&A function as we go along. I will conduct the interview with Joachim at first, and then we will open up for questions afterwards. So just type your questions in the Q&A function, and I will present them later on. I also want to emphasize that it's important that the questions should be concrete and precise, and I will also like if you can write them in English.
I also want to inform you that this webcast is being recorded, and that the recording can later be assessed at Crunchfish homepage and on Västra Hamnen Corporate Finance YouTube channel. So Joachim, as usual, let's start with the title of this quarter's report, Scalable Software Solutions. Give us some more context, please.
Yes, well, yeah, I always try to come up with, what, what's a suitable sort of title. And, this, this sort of came out of, you know, we, we concluded our webinar series, and, with the, the last webinar was Ensuring Trust in Scalable Offline Solutions. And, as, as you know, we, we've always had for the-- on the digital cash side, a, a software-based solution. And, it, it was a realization that we had, which we haven't really understood that clearly before, is that payments today, it's yo u either have it on a, on a card, as an external card, you have, that's a whole universe, basically of all the functionality is on that card. Or people are using, which I think is, is where the market is moving, they're using smartphones.
On a smartphone, in order to, if you are an application provider, if you really wanna have it going out to everybody in the market, you need to sort of create also that same tightness that you have a secure environment around the application itself, the payment application. Just like you have on a card, an external card, you want that tightness also on a smartphone. So if you implement a solution for offline payments where you need that higher security, then what's required, the only really way to do it is, in our opinion, the only viable way is to do it in software, where we have this Virtual Secure Element tightly coupled to the app, because that scales to all smartphones.
The alternative, if you are, if you have a solution where you're gonna use hardware-based security on, on the smartphone, is that all of a sudden, if you are an app provider, you need to make agreements either with the device manufacturer, basically the one who have manufactured the phone. And as you know, well, look here in Sweden, how many mobile phone do we have in Sweden? Different brands, different models. It's almost virtually impossible, I think, to go that route. The other route would be to, "Oh, let's put it on the SIM card," because SIM card is also like a, a chip, a secure element, sort of, that, this is where you can have it. But then you need to make agreements with the mobile operators.
So you, you are not free to distribute your application without tightly couple yourself to mobile operators or then device manufacturers. And I don't think that the payment industry is interested in to take that step. I think the payment industry wants to be independent and sort of control their own, own environment, and we've, we've certainly seen that in India. I think they fully understand, I think, to, to become hardware-dependent on a smartphone with the fragmentation that is there won't work. But then you need also, if you want the security, I think you need a solution like the one we have introduced, to have that Virtual Secure Element, to heighten the secure, or heighten the security, which is necessary. And, and, and for that reason, I, I think we, basically put that b ecause we haven't understood.
We have looked at, well, if you're gonna have hardware, it's, you know, if you have it on, maybe on a SIM c ard, it's gonna be extra cost and all that. We've been more arguing for the negative of distributing and, having it, the cost for it, but, but not realizing that just to provision it, you need a lot of partnerships in the market. And I don't think that is at all viable. So what we have in Crunchfish is the solution for smartphones, for offline payments, that I think is currently the way, maybe right now, the only way forward if you're gonna have security as well as scalability. And I'm quite happy about that.
So that's sort of one realization that we talked about it in our trust seminar. For that reason, we put that as the theme. I appreciate it maybe doesn't come out that way. It's not easy to explain, but I think it's maybe easier to explain it this way, in a interview or a webinar, but I think that prompted me to put that title. I also think that scalable software solution goes with the gesture side because we don't. We've developed something in software which is not that dependent on, you know, specialized sensors or specialized hardware in order to get it to work. This is also a very scalable software solution we developed there.
So I found that to be a theme that could go for the whole company, both on the digital cash side and the gesture side. But what really prompted me to choose that was that realization, that if it's gonna scale on a smartphone, well, you better go for software, and we have that solution.
Right, thank you. So moving into, to the Digital Cash side, last quarter, you signed your first Digital Cash deal with IDFC Bank. What has happened since then? Is the solution now fully integrated, and have people of India started using the product?
Yeah. Well, extremely happy. That was a milestone for us. It was our first commercial deal. I think we signed it just before, it was sort of end of June, and we've started revenue recognizing it in this quarter. It's a two-year, the revenue that we've got is for two years, so we're only recognizing it every month, 1/24th per month, really, according to accountancy rules. But they've also now started doing that integration, and they're just paying for what is the first bucket of users. So we have 7 layers of buckets, and they have a sort of t his is the revenue we've got from. And they paid, and we've started doing the work.
The application where they're gonna use our technology first has been for the Digital Rupee. The IDFC FIRST Bank have an application for the Digital Rupee, and this is where we have put our technology in. This is the same solution that we were part of the central bank's hackathon, and we won second prize for that. This is the one we call Digital Cash Telecom. It is that if you can really pay anywhere. You do a scan of maybe a static QR Code, and if you don't have connectivity over data, you can send an SMS to the back end, and then facilitate the payment. That's the solution that they're going ahead with. That solution, before they deploy it, they need approval from RBI.
We have heard from IDFC that it has been signed off from all the checks they've done. They've done some penetration testing and so on. But they are lacking some signatures from governor level before they can deploy it. So they haven't started it yet, but this is what they will do as soon as they will get it. Everything is ready in terms of integration and they're ready to go. But they need that last official approval in order to start rolling it out with their eRupee, the digital rupee app that they have in India. That's the status of it.
All right. Do you have an expected timeline when they will launch it?
I think I had hoped that it would have been already before this. We had actually two versions of our quarterly report. One, we said that it's been already, that they have started in full production, and it's out there. But they're still waiting for that. There's some sort of sign-off that the central bank will have to give them. We've heard from them that that should be coming, but they can't start before they get that official nod from the central bank.
I see. You have also encountered some competition during the quarter in form of UPI Lite X from NPCI. Please enlighten us about the similarities and differences between your products, but also, what's the way forward? What does this mean for Crunchfish?
Yeah, I think this is a very important question, because I think a lot of people with the, as you said, this competition from UPI Lite X, will that basically kill our chances in India that we've been hoping for? And I, I'm gonna talk about it here and explain. And we are quite, quite actually excited. That's sort of the news here, that we really think that this is. We've always welcomed NPCI's that they have this focus on offline payments, because I think, and also the central bank having that, because, that is certainly helpful to implement a new, say, way of payment, having it also offline. But we heard about this sort of during the summer.
We had rumors that NPCI would announce it, and that sort of stopped some of our banking discussions, because they had also heard that NPCI would launch something, and, and they were asking us, "Okay, what is the difference between digital cash and UPI Lite X?" We didn't know. We didn't have the specs. And at the Global Fintech Fest, which was early September, we attended, this was after the actual event itself, but they had a master class there, which we attended, and we realized that this is sort of a, a copy of what digital cash is. So yeah, you're right, competition, and, a lot of things that we have in our solution is what they have in their solution.
So that could, rightfully so, you could think that, "Would that kill it for us?" But we saw a few things. Well, we knew we have some patents. They certainly are sort of using that. We don't have them granted yet in India, so there's no infringement we can talk about, but we have it internationally sort of pointing to that this is patentable innovations. We understood that they don't have a tight security on the payer side, so they don't have that Trusted Application that we have in software on the payer side; they didn't have that. And we also saw that it was a use case where they had an NFC interaction between the receiver and the payer. It was NFC. They did a tap and pay over NFC.
There, there is a lot of them opportunity, I think, for us, functionality-wise, to extend that. We have the telecom solution. We can have other interactions than NFC, because NFC, you cut out the Apple side with NFC. You can only do it on Android, and not all Android phones have that NFC support, whereas we can demonstrate that we can do it over sort of any type of interaction method. And we also have consecutive payment. We've implemented that. So there's a lot of extra things that we have that this solution does not have. But we realized that, and we, I wrote a letter to the CEO of NPCI, indicating that I really think we should start working together because I think we can we can help you with this. What we didn't know then was how should we go about collaborating?
To be honest, I don't think the CEO of NPCI, he didn't know that either. We were struggling to find what is the way that we can, Crunchfish, with our Digital Cash solution, which is very similar to what they put out, how on earth could we collaborate? And we did ask them that, "Let's sign an NDA, a non-disclosure agreement," so we could exchange more you know more confidential information between our about our approaches. That's been done.
That was done here in early November, and since then, we've been having talks in order to understand how could Crunchfish Digital Cash complement, and how could that be going about? In these discussions, what we have learned is that NPCI, it's not like they come out with a piece of software to all the apps that, "Use this, and then it works, then it works with UPI or UPI Lite X, then it works." What they provide is specifications, guidelines on this is how it needs to work in order to connect to our back end, our sort of central switch, central server, where they have built an account structure for these payments. The ones who implement this, that implements what is happening in the apps and what is happening in the back end, connecting to the switch, that's the banks.
The banks do that. It's only the banks who are allowed to do that. They are in NPCI terminology called PSPs, payment service providers. That's. They provide payments to the rail. But the implementation of how UPI Lite X works, it's the responsible for the bank to deliver that solution. And as you know, and that's what we talked about already in the Q2 report, so it goes very well in line with that, we have one bank. We have IDFC First Bank, so that's our bridgehead into the market. And we have agreed with IDFC First Bank that, "Let's implement digital cash now in your implementation of UPI Lite X. Let's make it as a combination of the Crunchfish solution with according to the specs of NPCI." So that's what we're gonna do. We talked to NPCI about that.
Let's do a proof of concept with that, and that's the next step for here. Because then we have, for IDFC, we have a way to scale up the number of users, so we are getting more revenue from them. Because they have apps that goes via their implementation for UPI. But likewise, any of the other banks have the same thing. They are also relying on, the bank have an implementation of what's called a Common Library, which turned out not to be so not so common anyway, because every bank has their version of the Common Library. But just like we can complement the solution for IDFC First Bank, we can do that for any other bank.
So I think what has happened, actually, is that NPCI have provided the infrastructure for which we could help now the banks, who are the ones who delivers the solution that ties to this rail. We can help them by getting it into the security that is required. We can help them that they can much faster, have much more use cases, the telecom case, the consecutive payment. They don't just have to be limited by NFC. And, well, if they sign an agreement with us, they can make use of our patent rights, which I think will come into play in the future. So this really has not been a disaster for us, rather the contrary.
This is the way where we have now a fully functional back end, really well done by NPCI, and a spec that tells the banks, "This is how you go about doing offline payments." And there, we complement that implementation with the digital cash. Because right now, we talked about that in our webinar as well, the way they have done the security is that they only have the cryptographic keys secured. When I say they don't have a tight security, the cryptographic keys, they are secure. A lot of people know that you can use on your iPhone or Android. There is something that these mobile phone can store keys. You have login keys. You can get that, and that's stored on their mobile itself.
You have very complicated keys that they generate, and they store that. That's the function that they are basically using. But they don't have support for a secure way of handling the offline balance, the rules you set up for controlling how much offline payments you can do, and any of the transactions. All these things are not protected currently, and all that is protected in our solution. I believe if you're really gonna do an offline payments that have adequate security, you need to add that. IDFC certainly understands that, and they like that they can provide that implementation of the solution. I think we will be able to convince others as well. So India is not dead for us.
On the contrary, I think India is. It's just getting started, and it's getting quite interesting because we can scale through IDFC, but also any other bank.
So this is kind of new information for me. So just to make it clear, UPI Lite X is more like a framework on how a bank should implement offline payments and—but not a full system. So, the bank-
It's not a system at all.
No.
It's the bank that implements the system.
That's where countries then could come into play for these banks?
Yes, exactly.
Yeah.
Because we've been thinking that it was called a Common Library, and it sounds like it's common for everybody, but it's a common spec for everybody. That's what it is. But then we've been asking NPCI, "Why don't you take on Crunchfish?" But they don't deliver that piece. They don't deliver the software. That's the responsibility of the app provider or the banks here that have to do this. And this is where our opportunity is, to go to them. And quite frankly, we didn't know this either. We thought that the Common Library was a piece of software delivered by NPCI to everybody. That was their contribution.
That's why we talked to them about, "Why don't we get part of that Common Library?" And they said, "Well, we struggle because we can't allow just one vendor. We need to be agnostic," and so on. But here, I think now, I think we are looking at a solution where we could work with each and every one of the banks. And we have one agreement already, as we talked about, which, you know, the scalability of the business is still there. We can. The money we can get from that business is if we scale it up. Right now it's small because it still hasn't really been rolled out yet, but that model we can replicate to other banks as well. So that's the beauty of the whole thing.
I see. You talked about patents a bit, just now, and my next question was: Why haven't your patents been able to protect Crunchfish Digital Cash from such similar products?
Well, I think the patent right is per country. And we apply first in Sweden, and then we apply for what is called an international patent. That doesn't protect the whole world, but it gives us additional time before we have to start what is called nationalizing our patents. Nationalizing is where we have to choose what countries do we want this protection to be valid in. We have chosen India for sure, but we are in the process of that. These innovations needs to be examined and then granted in India. But we have in that. When we file internationally, then we are getting an assessment of the patentability of our innovations.
For two of the key ideas that we have, the fact that both parties send up the transaction, not just the receiver of a transaction, but also the sender, the payer, and also that whatever the sender is sending to the receiver, the same transaction is sent to the back end as well in an interoperable system like UPI is. These two, we have a green light from an international review of our that this is patentable, and that is a basis for when the Indian Patent Bureau will start looking at this. But we can't really. Just because we have a patent doesn't mean that everybody, first, knows about it. Secondly, before we have a right in the country, we don't have any, we don't have any sort of legal actions we can take.
So we can't stop anyone just because we are at the state we are right now. So what they've done in India is not illegal in any way, but I think they now are aware, at least NPCI that we've talked to, that we do have some patent rights. But if you can look at it, what NPCI has done is to specify, you know, they haven't provided any software, but they have specified the way you should do offline payments is according to what Crunchfish has patented. And that's a pretty good position to be at. That the specs basically tells the banks, "Do what Crunchfish." Yeah, and I don't think they were aware. Again, there's a lot of people patenting left, right, and center in the world, a lot of things.
But that's what happened. So I think our position is good in that sense. But I don't wanna be a patent troll, really, and but I think there are a lot of reasons for India to look at countries and what we've done, and how we actually could help them accelerate their path for offline payments and for digitalization. And that's what we really would love to do, because I think we have the technology that complements it. That hasn't changed. And because this spec for a competing solution has come out, well, we can complement that spec. And each bank can then take a decision that let's implement it this way, because the security falls with them. The security doesn't fall with NPCI.
It's their responsibility. And taking it one step even further out, the apps that use that bank, I think they are also at risk. So, Google Pay, PhonePe, Paytm, the three big ones, they are taking risks here unless they have a tight enough security. And that's y eah, I hope we-- All our dialogue can be opened again. I think we've had a bit of a, I would say, we probably lost six months in India because of this. We didn't know. We didn't know what they had. We didn't know how it was implemented. Now we know. Now we have a way forward, and we have a willing bank who will actually n ow, we have already a contract with them, and we will start with them.
So yeah, we are, we're excited. Unless if NPCI hadn't done this, we would have been building it on what we did in the regulatory framework of the first half of the year, the solution we did with IDFC and HDFC, which was more of a proprietary back-end. That back-end has moved in center stage into NPCI now, who has the contacts with all the banks in the whole Indian ecosystem. So yeah, it's a good position to be in right now, and we hope to sort of utilize that in the best possible way we can.
I see. Thanks for clearing that up. Well, you now put your most of your efforts in the Digital Cash business. What does the deal pipeline look like? How fast do you expect to attract new customers?
Well, I think as we- I think the shortest to business is IDFC is scaling up. You know, they started with just their first batch of users that they can use for trialing out on the eRupee. That I think is the closest to revenue. But then going beyond IDFC, as we have been talking about here, I think that's sort of next, I think. We have also talked to a lot of central bank digital currency payment providers, and this is also sort of interesting for us, but I believe that is more longer plays. I think we are positioning us really nicely for that.
They are coming to us and asking that, "We have heard that you have a great offline payment solution for smartphones. We like to have that part of our platforms." And we are working with ye ah, we have announced one, that we've done it for a nonprofit organization, Mojaloop. We've announced that. But there are more to come, which is that we are getting into this market. Because I think the payment providers for CBDC, they are realizing offline payments is a requirement by the central banks. And as I said earlier, yeah, you can put it on a card, an external card. You can do it. That's a central bank, they can have control over that. But if it's gonna be a smartphone, well, right now in the market, it's our solution.
I think that's the opportunity here. And a lot of people are talking to us. And how we can monetize that in the short term, I don't know, but we are certainly positioning us quite well for the future. We have also. And that's, it's also fairly recent. We started in another track, particularly in Africa, also in South America, and a little bit Middle East. There is that the mobile operators provides payments, and we have a way forward there, which I think for revenue-wise, will probably be sooner than what we can look at for CBDC. So we'll talk about that some more, but that is to use it. It's called Mobile Money.
The specs are provided by the GSM Association, and this is sort of. A lot of mobile operators are providing, it's basically Digital Cash Telecom that they have. They can use an SMS to start a payment, but what they don't have is full offline payments without any connectivity, and this is where we can complement all the solution with the Digital Cash, full offline, just like UPI Lite X is, similar things. And we've started to look into how to approach that whole market as well. So then we are still following up on some of our other payment partners, what they are doing.
But, closest to revenue is what we can do in India, and that's why I think I can understand the little bit how the market has felt. And we haven't been able to communicate because we haven't yet understood. We knew that UPI Lite X would be a game changer in some sense, but we had to first also then understand, "Okay, how are we gonna play this? How will we complement this?" We saw immediately that we would complement it, because we saw that it had some gaps that we could fill, but we didn't know how. How would we work together? Now, when we understood it, I think we have a really great way forward.
So, I think that's what you can expect from us. I think it will be continued focus on the Indian market.
Yeah. If we just look a bit in the rear view mirror, the discussions with HDFC, are they still put on hold?
So sorry, with whom?
HDFC, are they, those discussions still on hold?
I don't think they are on hold. But HDFC is one of them who have implemented UPI Lite X, for instance. They've provided that as a system. They haven't put it in their own system, in their own apps yet. And I don't think they have closed doors for us yet, because their implementation of their version of the Common Library, well, we can help that as well. In addition, they are very well aware of what we won, this, the Digital Cash Telecom, which UPI Lite X that don't have at all. And that conversation has been going on all the time.
I think, yeah, HDFC is probably one of the first ones we should. When we can present more or less like a recipe, a formula of how can a spec look like, which includes Crunchfish Digital Cash on the UPI Lite rail, how does it look? And we will work that out together with IDFC. Then I think HDFC will be probably one of our first banks that we will go back to. But we can go back to it. We have had a sort of, I don't know, handful of other banks as well that have expressed interest. Now we can go back, because their question was to us 3-6 months back, "Okay, UPI Lite X come, is coming out. What is your-
What's the differences?" And before September, we didn't even know the differences because we didn't know their implementation. Now we know also how to approach it, and we-- Yeah, I think that's gonna happen. So HDFC, yeah, we are in contact with them. We had a. Yeah, Magnus, our CPO, he was chatting with one of the key lead guys in the regulatory sandbox project we had this week, and he forwarded that conversation to me. So yeah, we're talking to them.
Great. I thought we should move over to just the interaction. A little less activity in this area for the quarter. And I do only have one question about this, and it's about the OPPO deal that I, if I remember correctly, will finish by the end of this year. Will the contract be renewed, and or is there any other discussions with potential partners or customers?
Yeah. That contract will not be renewed, unfortunately. Not that we know of, at least. And that's the big difference why the revenue in this, b ecause revenue recognized that last year. It was, yeah, I think it was $500,000 that we got.
About SEK 5 million. Yeah, yeah.
Yeah.
Yeah.
That that we got in the Q3 2022, and we don't have that. This was our old, our first selfie product that they use for mobile phones. They haven't renewed that. We still are talking to OPPO about things around AR, VR, and we are talking to other players in that area as well. Our new CEO, Fredrik Clementson, and together with Jens- Henrik, our head of development for—they were just in China and met with all the players.
One of the things that they showed in these meetings was that we have released a new version of our XR Skeleton that includes some temporal understanding, and that makes it if the hand was here, and then the computer doesn't see it the next frame, then you could assume that the hand is still there. So you take away a lot of flickering like this that might happen digitally that doesn't happen in the real world. So the product looks, yeah, really good, and I. Their report back from this meeting was that a lot of all our vendors were really impressed about what the product has taken us.
One thing they also came back with was a realization that gesture control is a must-have for these AR/VR manufacturers. And I think a lot of in-house development is happening in parallel because this is something that they will have to have. So hand gestures is sort of there. We hope to be able to deliver that to many of them. But some of them are also taking that now in-house, which cuts us out a little bit from that revenue stream.
I guess the competition in that area should be pretty tough right now with all the development in AR/VR.
Yes, it is a, it is a tough space to compete in. It is.
Yeah. Moving along to some finances. You've just completed a rights issue that brought in SEK 35 million after issue cost and the payback of a loan. How will these funds be used looking forward?
Well, as we have specified in the prospectus that we had, is that we will be continuing developing. We can't stand still. But the majority of it is for marketing, and the majority of the whole thing is for the digital cash side. So it is to continue to try to spread this. And I think we will just intensify what we're doing. We have to. Then we have to also recognize that we only got 60%, because this, the share price was trading 10%-20% lower than the 775. So it was certainly undersubscribed, and we had to have the help of guarantors in order to get to the 60%. That means that we didn't get all the money.
So I think we still have to be prudent, and then on the cost side, and then yes, to basically have the cash we need for our runway before we become profitable.
I see. Last time we spoke, the message was quite clear that you wanted to fund the company via a directed issue and not a rights issue, to keep the dilution low. Why didn't this happen?
Well, we were relying on Socio, this what we announced in November last year, and I talked to them, I think it was last week, and they still don't have their funding. So, they--when we spoke last time, they said to me that this will happen in September. And when September came, and they basically told us that, "No, we have to push this now to October," then I think we just felt that we can't trust that we will get this money in October either. So we were forced, basically, to keep the company as a going concern, really, as to have the money.
We needed to go to do a rights issue. It was certainly not what we wanted to do, but we were t hat at the end became the only option as I. Now, in hindsight, I wish I wouldn't had relied and hoped for that so long. But they still don't have the money. As I said, I talked to them. So I'm glad we actually stopped hoping for that, and we had to take this measure. But I think this has hurt us, the fact that we waited so long for it. We could have probably acted a bit earlier. But we believed, and we didn't want to do a rights issue.
We really wanted rather to do a directed issue. But then, when Socio fell out, we were examining also some other options, but it was hard to find that in such a short timeframe in the climate right now in the market.
I see.
It became a rights issue.
Yeah
W hich, yeah, we, the company now have the money, and I think we have that money to run with to develop to profitability. Because on the Digital Cash side, certainly there is a very scalable business there that we have to show.
Yeah.
That's what we need to do.
That was my next question. With the money now that you got, is this money sufficient for the company to become cash flow positive?
I said that before. It's a hard question, but right now, we're If we certainly have it well throughout, as I've said in the Q4 report, Q3 report, well throughout 2024. So I think we have that funding. But I w hat we need to do now is to get this solution to scale, the digital cash side to scale, because there is, it's a profitable business if we get it going. Just the IDFC contract alone is sort of, yeah, paying basically for our operation. Then if we can scale, there are many banks. IDFC is just one. So if we get that to scale up to its potential, then there is a lot of business to be made here.
And then, it's a whole different ballgame. But, but, but, but I, I appreciate that we need revenue, we need to prove that, but, but I, I think what I'm happy about is that we, we know how to do it now. We didn't know that three months ago. We just knew that, we got competition, as you said. We saw what the competition was. We had to figure out how to coexist and complement it, and we have that. And now let's deliver on that.
You also wrote in the report that the company evaluates strategic options. What are you referring to when you say this?
Well, that's something that the board always does, in a way. But I think we wanted to stress it because we have engaged advisors on this. So we are starting to spend some money in order to look for strategic options. That this could be that we find an investor who wants to invest and become part of any of our two businesses, really. Or potentially that we would divest any of our side. But I think we are now at the point where we have to look at that as well.
So we've engaged an advisor to work with us and present basically other strategic options as well. I think. It's been tough to go through. We really thought, and we still have. The solution we have is still a very great solution, but we were stopped in how to roll it out because of what happened now, certainly here in India. I'm so happy we found a way to come back on the road again. But it shows how sort of challenging it is to be a small company. If you develop a new technology, if you can rely on that you have a big revenue stream from your cash cow in your company, then that's one story.
But Crunchfish, we are taking on two areas here without any sort of cash business, cash cow business that we rely on. So it is still a high-risk venture that we are at. But we still. Y eah, I think we come out of this quarter now, or this, after certainly now November, discussing with NPCI, discussing with IDFC, and how we can go about it in a quite a positive way again. It's been tough. I've seen a lot of disappointed people, and I can appreciate that. As a main shareholder, I'm also quite disappointed in the development recently, I must say. But let's turn it around. That's what we will need to do.
That sounds good. That was all my questions, and we will now open up for questions to those who are listening in. I highly encourage you to use the Q&A function, write your questions concrete and precise, and also in English would be preferable. We have already got one, so we could maybe start with that. "Is the DC solution a good option for Apple and Android, as they perhaps don't need to build in a secure elements into their phone anymore?
Well, Apple and then o n Apple and then Google for Android, they are working in this area. And they are developing, I think what's called on Android, it's the Keystore, and they are enhancing that, developing something called a Strongbox. That's on the Android side. On the iOS side, it's called Keychain, and they are working. That is embedded in something called the Secure Enclave. The Secure Enclave is b ut it's a system where they provide it for a specific function. This could be for biometrics, or it could be for that you identify yourself with the on the phones, you log in, and it could be for things like keys that you have for various systems.
But what these systems don't have currently any plans for is to provide a way to provide third-party application development. So you can develop an offline payment system that could fit in that secure element. They don't provide that. This is the beauty of what we provide, that we have this virtual secure elements that can go anywhere. I haven't seen any plans from either Apple or Google to have third-party developments in their Secure Enclave or the Strongbox. It is only for the functions that they define, like the keys or biometrics login and sort of on that. And it's yeah, so can we then- will they stop doing it, as the question was? I don't think they will stop. They will- they wanna have that for various things.
So the very insecure operating system, the Rich Execution Environment on these phones, needs to have some functions which are more secure, and they provide that. But a third-party application, like offline payments, which is specialized rules for how the balance, maybe that's they can put in maybe, I don't know. But there are risk rules. Everything has to be customized in some way of the risk appetites of the central bank. That has to be a third-party application. And I think we provide a secure element there for that.
Super. Okay, moving to the next one. "Hi, Joachim. You mentioned your initiatives towards African and maybe other geographies operators. When would you see these work streams potentially convert into revenue, and which levels of revenues?" Yeah.
I think our business model, the way we have it, would be similar to what we have done in, say, for India, that we would charge per, ye ah, most likely per user, of how many have access to this. The partners that we are talking about that have local partners, they've worked in the mobile money space before, and they are the one we are talking about right now, they think they can be fairly aggressive and work fairly quickly here. I don't know if they can deliver on these promises, but they are saying, sort of within a year. They're even saying six months. But I think it will- some things here will take time.
But I think 2024, I think we can maybe see, yeah, something happening in this area. I think it's good that we, w hat we need to do, we've for long been working on the Indian market, and we are well-known there, and we have a chance to scale there quickly. I think for the CBDC area and for mobile operators, I think we need to start working that whole market. I think we should be there because these are areas that needs offline payments. The central banks are replacing cash in some sense with digital payments, and cash is offline, so digital cash probably needs to be that as well. And then we have the mobile operators, where they are handling the payment function.
It's in many emerging markets where people are unbanked, and this is where you also have quite poor internet conditions. So that's why an offline payment solution is good. I've heard that in South Africa, in many townships, they cut off power for maybe 12 hours a day. That means that even the mobile towers are going down, so you don't have any connectivity whatsoever, no telecom and no internet. And that means if that also means that you can't. You have to stop paying as well, if you don't have cash. That's kind of bad.
So I think in many of these emerging markets, our digital way of paying here, I think is a really neat solution for some of these markets, and we like to explore that some more, where the back end is developed by the operators, just like NPCI has developed the back end for the UPI system in India.
I see. We haven't received any more questions yet. Maybe we should wait a bit.
Yeah, we have-
If you have any questions,
If you have them now-
the time is now. Yeah, so.
Yeah.
I f you have any questions, please write them now.
I will cut out this awkward silence.
That sounds like a good idea. Usually, we get a lot of questions on these webinars.
Yeah. Yeah.
All right. Any updates on Wibmo or the e-wallet?
Wibmo is a payment platform partner in India, and they've been, they, they've actually come to us with one African project. Wibmo have said that they wanna start working with-- They have an online payment platform, and they wanna have adding offline, but they wanna do that when they get sort of customers asking for it. And they've come back with an African case. And we've together with them, we've looked into that. That's basically the status of it. I think we had hoped that that will go faster with Wibmo than it has. But that's been slow, unfortunately. The e-wallet, this is the e-wallet in India, one of the major apps of India. There, the discussion is still ongoing.
But as with many other wallets, the discussion has been that it can't just work on our wallet. A wallet is where you deposit money on a wallet, and then you are using it within that ecosystem. They are saying that UPI has become so dominant now in India, so even if we can't just make a function that works only for the e-wallet, it needs to work on UPI as well. If you have a system that works on UPI as well as our e-wallet, that's fine. But to do it exclusively only for our e-wallet is something that we don't anymore wanna invest in.
The good thing here now, as I've talked many times, we know how to help this major e-wallet, because it is to approach their banks, maybe with their help as well, and say that, "Why don't you implement a version of the UPI Lite that have Digital Cash as well? Then, we can support you with that one solution, both for UPI as well as then for your own e-wallet." So I think we have a way forward there. They were sort of indicated to us that, well, we wanna wait until we. You need to have a response to what are you gonna do about UPI, because UPI is just becoming a big elephant, a big dominating force in India.
Yeah. Hi, Joachim. Can you talk a little bit about the opportunity for mobile cash in South America? Do you see the same picture as in Africa?
Yes, I do. Yes, I do. And it's also that there are mobile money operators in, as in Africa. But I think what is also happening is that in Brazil, they have a system called Pix, P-I-X, which is the equivalent really of the Indians' UPI. They, t hat's a huge market as well. And they have experimented with offline payments, but done it on a card. Pix offline is, they've developed that on a card. If we could come there and provide functionality for a smartphone for that market, that would be great. So it is a mobile money opportunity, just like Africa, but they do also have a platform like UPI is in India that, y eah, Pix presents that as well.
I believe that their implementation of it is, even if I don't know it in detail, I think it's similar as in India, that the banks needs to provide the infrastructure for it. So I think Pix is interesting, as one of the big, really successful real-time payment systems in the world, the Brazilian system.
Next one: Any new information regarding the CBDC projects in Caribbean?
We, Bank of Jamaica with e-currency, I think they are not yet with offline payments. That hasn't really happened. We have one agent that has been approaching some other sort of projects, but it hasn't really led anything for us yet. We believe we need to get close to the payment platform partner of the central bank in order to complement with our offline payments there. So we are less focused on Caribbean per se, but we are focused on to get close to the payment platform provider who works with the central bank to give their online platform, and then we complement with offline around that.
Yeah. Hi, Joachim. It seems like fairly high turnover volumes in Africa and South America. Would you agree?
Yeah. No, it's, w e've been very focused on India for a long time, and we hoped that we now have a way forward, that we know how to do it, even with UPI Lite X. But other ripe markets is both Africa and South America. And that's why I said, we think in many of those countries, it is the mobile operators that serve to provide. People may have heard of M-PESA or Mobile Money, which Ericsson provides as a system here. But these systems are basically Digital Cash Telecom. It's a way to connect over sort of telecom or the telecom network back to the back end.
But they don't have proximity payments, and this is what we like to add, and yeah, the opportunity is there for doing something around that.
Yep. Haven't got any more questions yet.
I think one thing I can say, if you go to our website, I think it's on Digital Cash side. We just. That was just a couple of weeks back, we put out new videos. You can see what Digital Cash Telecom is. I think it's the last-
Yes
six videos, and then there are five other recently released videos that show. And they're all about the proximity payment that we do, paying without any connectivity whatsoever, using various forms of interaction, not just NFC, but also using Bluetooth or QR or even ultrasound.
Yeah. Yeah, the demo videos. Yeah.
Yes.
Yeah. I've seen those. Maybe we won't receive any more questions. Do you want to wait three more minutes until 10, Joachim, or should we
I don't think we have to be to 10 o'clock.
No
precisely. I, I think we can wrap up,
Yes.
That's fine.
Super. All right. Thank you, Joachim, for answering all my questions and taking the time for us today.
No, thank you, Filip. I think it was important, yeah, to give our feeling about the things. Things are looking grim if you look at the share price right now. But I think we have a way to bounce back. And that's, as I said, as a major shareholder, I do appreciate that, which I think I know a lot of other our shareholders will as well.
Yeah.
You can do that.
I hope so, too. Super. Best of luck. Thank you.
Thank you, Filip.
Bye.
Thanks, everybody. Thanks.