CORDIS - EU research results

Digiteal: European Payment and e-Invoicing platform

Periodic Reporting for period 1 - Digiteal (Digiteal: European Payment and e-Invoicing platform)

Reporting period: 2016-08-01 to 2016-11-30

The EU has standardized the banking and payment landscape, in part through its Single Euro Payments Area (SEPA) payment-integration initiative for the simplification of bank transfers denominated in euros. This has created SEPA standardized credit transfers and direct debit - SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD).

25 billion invoices being sent each year to SEPA-zone citizens and the majority are paper-based. The printing, packing and posting of paper invoices has a huge environmental impact and is a significant financial drag on the performance of European industry.

Typical paper invoice average processing cost in Europe is 30 EUR - e-invoicing offers an 80% cost saving
Savings between 1-3% of a company’s turnover are realistic objectives

Europe could realise €243 billion worth of financial benefits from e-invoicing adoption, significantly increasing competitiveness.

In addition, there are large environmental and social benefits:
Moving from paper-based to electronic invoicing decreases the carbon footprint of one invoice (lifecycle) by 63%
Switching to 100% e-invoicing can reduce the costs for businesses to produce these documents by €21.3 billion and reduce carbon emissions by 888,750 tons

Digiteal a European-first e-invoicing B2C/G2C bill presentation platform: a new disruptive software-based payment solution based on the SDD and SCT principles applied to e-invoicing. Digiteal makes invoice processing easy, cost-effective and very environmentally friendly.
The specific objectives for the Phase 1 execution were:
Technical feasibility: Development of technical feasibility assessment that will include: a) v2.0 integration with Speos and its clients b) Design and study the architecture of v3.0 with support of SDD as payment solution for Belgium. c) Study the integration costs with International DSPs and development integrations to offer our SDD payment solution abroad.
Business plan and Commercialization activities: Elaboration of a complete business plan including revenues and costs analysis, commercialization plan and deep assessment of the commercial risks associated with expanding our geographical markets. The business plan will include the go to market, management strategies and a financial viability plan.
Freedom to operate analysis: we will perform a Freedom-To-Operate analysis in our different target markets with special focus on the SEPA Zone.

Over the last four months we have assessed the technical and commercial viability of Digiteal. Activities include:
Detailed market analysis: verifying that our target markets are relevant, growing and offer significant opportunities. In Belgian 562 million invoices sent each year to citizens and the bill presentment and payment market size is €78.7 million a year (based on Digiteal (4 cent per bill presentment + 10 cents of payment transaction cost)). In the SEPA-zone 25 billion invoices are sent each year citizens and the bill presentment and payment market size is €3.5 billion a year (based on Digiteal pricing). The European regulatory and legislative context (Digital Single Market initiatives) is very favorable and we have verified that our solution (only B2C SEPA-wide solution and significantly lower cost offer) is unique in the marketplace.
Freedom to operate analysis: we have undertaken a global Freedom-To-Operate analysis, with a particular focus on the SEPA Zone. This work identifies and highlights patent or patent applications of interest in relation to the Digiteal project. 13 potential patents of interest were identified. They were reviewed and considered in the overall IPR management of Digiteal. There are no concerns surrounding potential infringement or constraints around freedom to operate.
Business plan: we have completed a detailed business plan including revenues and costs analysis, commercialization strategy and assessment of the commercial and technical risks associated the execution. The business plan includes the go to market, management strategies and a financial viability plan.
Technical feasibility: we have continued to work on the technology including the bill presentment solution and payment by QR codes. We have refined the design of the architecture to support SDD as payment solution for Belgium, and analyzed the integration costs associated with International DSPs enabling our SDD payment solution to be offered in the wider SEPA-zone
Engaging and profile raising: we have had discussions with a wide number of potential customers, partners, banking stakeholders, investors and competitors. Several of these have resulted in letters of support/intent.
Execution Plan: we have developed a complete execution plan for the Phase 2 project, including planning, organization, risk analysis and budget.
Our plan is to launch in Belgium and then deploy Digiteal across the EU member in the SEPA zone. The Digiteal solution addresses the limitations of current solutions in the marketplace. It is the only B2C SEPA-wide solution and it offers a significantly lower cost solution for bill issuers - 5.75 times cheaper than the nearest competitor.

It will deliver a huge reduction in the environmental impacts of paper, printing and postage associated with traditional invoices. It will also help deliver a step-change in business (and European) competitiveness and help make the Digital Single Market (DSM) a reality, delivering the EU’s eGovernment Action Plan.

The Teal IT business plan sees a gradual increase in the adoption of Digiteal by invoice issuers and end customers, to reach 40 million invoices presented per quarter. Even with the pessimistic scenario, Teal IT will generate sufficient income to become self-supporting and finance its further projects. In the realistic scenario, breakeven is achieved after 25 months of production. It enables us to reach revenues of €3.6 million by 2019.