ProstoPay: The Story of Ukraine’s Leading Provider of Telemetry and Cashless Payment Services
Part One : From the Beginning to the Bombing
By PV Editor Ian Reynolds-Young
They say that many of your best ideas will come when you’re burning the midnight oil…
Ivan and Dmytro met as colleagues employed in the Kyiv branch of global auditing firm Deloitte. On the bottom rung of the career ladder, the young graduates would often work together, at all hours, to meet punishing deadlines. They had no issues at all with their challenging schedules; in fact their only grumble was that in the dead of night, there was nowhere to get anything to eat. Not even a bar of chocolate. ‘You lose track of time’, Ivan recalls, ‘until suddenly it’s two in the morning and you realise how hungry you are.’
Eventually, Ivan left the business; but as his new job was located just around the corner from his old one, he and Dmytro got together regularly for lunch. It wasn’t long before they started to blue-sky the possibilities of setting up a business of their own. It was a dream that was soon to become reality.
‘One of the things that we realised was that my old company could really use a vending machine’, Ivan laughs. ‘Starting a vending business was the gem of an idea; but we also got talking about how vending businesses were run, and coming up with theories about how they might be run better.’ With their backgrounds in auditing, a focus of those early conversations was the need for more real-time data, in the form of a telemetry solution.
‘Those early conversations are the foundations of the business as it is today’, Ivan says.
The start-up acquired its first snack vending machine in March 2012 and sure enough, their first customer was their former employer. ‘In those early years, we expanded our network quickly and soon we became the biggest snack vending company in Kyiv.’
‘A major reason for our success was our background in corporate auditing.’
From this position of strength, Ivan and Dmytro set up meetings with other vending operators in the capital. ‘They all asked the same question, ‘how is it possible for you to provide a snacks service at such a price, you have to be making a loss, you must be insane!’, Ivan says. ‘They shared with us how they were making money out of vending… by selling coffee. I remember being amazed at the margins they were achieving, compared to us.
‘Despite that, things were going really well and a major reason for our success was our background in corporate auditing. We created an accounting system that was tailored to our business processes and that proved to be a hugely important step along the way.’
2016 was a landmark year in the business. It began with a key customer asking if they could be provided with a cashless payment system. ‘They told us everyone was obsessed with cashless, that people were fed up with having to carry small change around to use the vending machines’, Ivan recalls ruefully. ‘The implication was that if we couldn’t deliver a solution, they’d have to go looking for a company that could. Yes, that was a little bit frightening.’
Ivan and Dmytro already had a technical boffin, Alex, working for them as a consultant, and it was to him that they turned now. Ivan laid it on the line: ‘I told him I thought the only way we could keep the client was for us to invest in very expensive unattended retail terminals.’ But Alex was one step ahead: he’d already been researching and experimenting in this field for some time, getting familiar with the various vending machine protocols, such as MDB and DEX, and he advised that the way to go was to create an RFD system. Ivan and Dmytro agreed: ‘let’s do it.’ The company suddenly had a third partner and it needed a new name that better reflected its trajectory. They chose ProstoPay – ‘prosto’ being the Ukrainian word for ‘simple’.
Within months, testing began on ProstoPay’s maiden device. ‘We immediately began ‘live’ field trials in conjunction with our client’ Ivan says. ‘Two months later, we went live.’ The client was delighted. ‘We’re still working with them today’, Ivan adds.
With the first project up and running, the original device was honed and modified; a never-ending process that demonstrated to the partners that, if they were to remain at the vanguard of this fledgling business sector, some serious investment was going to be required – and not least in terms of people. Plans were made… It was December, 2016.
The sense of expectation around the business was palpable
The next two years were spent in the development of new products, particularly robust – and stable – firmware, which was introduced to the Ukrainian market in the summer of 2018. It was a vending marketplace in which telemetry was notable only by its absence, so the ‘sales pitch’ largely consisted of explaining to customers why they needed a device attached to their machines, how it worked and how the monthly fee involved would deliver a serious return on investment. It was no easy task; but in the short period since then, as Ivan says, ‘there’s no such thing as a serious vending business that doesn’t depend on telemetry.’
Life was good. ProstoPay was acknowledged as Ukraine’s leader in a burgeoning marketplace and the company was eagerly eyeing other territories into which it could introduce its game-changing technologies. Activity was reaching fever pitch. ‘We went to our existing customers and showed them what we could do and asked them, ‘how could you use this technology?’’, Ivan says ‘and in many cases, after discussions the client would say, ‘ok, if you can do that, we’ll be your first customer.’ The sense of expectation around the business was palpable
And then, on Feb 24th 2022, in the morning, the unthinkable happened. Russia invaded Ukraine. Enemy tanks were rolling over the border and heading for Kyiv and missiles were falling out of the sky on the city and its bewildered, terrified people.
All bets were off…
*In Part 2, Ivan shares the impact the war has had on the company; how, against the odds, it continues to thrive and how – and why – ProstoPay is bringing its business to the UK. You can read it now, HERE.
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