Step by step, Lydia is unveiling its product strategy to handle all your payments. When I last covered the French startup, it was still mostly focused on growing its user base by providing a Venmo alternative for French users. But now, Lydia also lets you pay on e-commerce websites, starting with PriceMinister. The app is now also available on the Apple Watch so that you can just tap on your watch notification to order something online.
“We think that Lydia’s mission is to make it easier to use your money,” co-founder and CEO Cyril Chiche told me. “We don’t want to be a great app to pay back your friends, nor a great app to pay online. We want to offer as many use cases as possible to our users.”
There are now three use cases for Lydia. The Venmo-like feature lets you pay back your friends in a few taps without having to pay any fee. It uses your good old debit card to pay someone. And if you don’t want to keep any money in the app, you can withdraw it to your bank account — it’s free as well.
Second, retail stores can accept Lydia in addition to cash and cards. When someone wants to pay using Lydia, they can open the app, enter the amount and show a QR code to the merchant. Merchants have to pay 0.3 percent per transaction and a monthly plan between €4.90 and €49.90. It is a lot cheaper than credit card terminals.
Finally, e-commerce websites will soon get a “Pay with Lydia” button as well. When you click on the button and Lydia detects that you already have the app based on your phone number, the company’s servers send a push notification to your phone. You open the app, enter your PIN code, select your debit card and you are done.
Once again, Lydia bets on very low fees to attract e-commerce merchants. Processing a transaction costs 1.5 percent and a fixed €0.06 fee — it’s much cheaper than PayPal or Stripe. “Before launching our e-commerce offering, we needed a great user experience, and of course fraud protection and very low fees,” Chiche said.
And the user experience is even better if you have an Apple Watch, because the notification will show up on your wrist. It’s totally optional, but early Apple Watch users should appreciate the integration. And it’s true that tapping on your wrist sounds much easier than typing your credit card number.
The company raised $3.9 million late last year (€3.6 million) from XAnge Private Equity, Belcube and Duval’s family office. Now, it is facing an important challenge. If it wants to become a ubiquitous payment solution on the web, it still needs to convince multiple big e-commerce partners to work with the company.