Making It Work: Fintech looks to chat app commerce as the new ‘mega-trend’

The founders of Dublin fintech Cloda believe ‘conversational commerce’ will soon replace e-commerce as the most-used method of buying online

5th December, 2021
Making It Work: Fintech looks to chat app commerce as the new ‘mega-trend’
Mark Waldron, Ronan Murphy and Padraic Duffy of Cloda: ‘Everyone is going to buy something via chat app, and some people are going to buy everything via chat app.’ Picture: Fergal Phillips

In China, more than 80 million transactions take place every day via WeChat, the messaging app.

Companies based in the country have realised that they can better convert prospective sales into concluded transactions by communicating directly with customers on personal text platforms.

The EMEA business region – Europe, the Middle East and Africa – has yet to really embrace the trend, which is known as conversational commerce because it takes place via text.

But the founders of Cloda, a new Dublin fintech with backing from Enterprise Ireland, believe it’s only a matter of time before it takes over from e-commerce as the most-used method of buying and selling goods and services online.

“We see this as a mega-trend,” Ronan Murphy, Cloda’s co-founder and chief executive, said of conversational commerce.

“This is something that’s coming. The phrase we’ve been using is: everyone is going to buy something via chat app, and some people are going to buy everything via chat app.”

Murphy, Mark Waldron and Padraic Duffy, the founders of Cloda, are so confident in their idea that two years ago they decided to spin it out from Full Circuit, the software consultancy business they founded in 2018. They have spent the intervening period developing the technology to position their company as a pivotal part of how conversational commerce works.

Companies that partner with Cloda can use WhatsApp, Facebook Messenger and a suite of other messaging apps to communicate directly with customers and complete transactions over instant message.

Currently, the biggest messaging platforms do not offer payment options within their apps in Europe. In other parts of the world, you can pay through WhatsApp at the touch of a button.

Using Cloda, customers can add their payment details through a sign-up form which are then stored for future purposes. They can then pay for goods and services directly through their messaging platform of choice without ever having to leave the app.

“Cloda empowers businesses to sell via chat apps directly to their customers, using their most personal channels,” Murphy said. “The difference between that and regular e-commerce, which takes place on a company’s website, is that it has up to 10 times the conversion rate. It’s about making people more likely to purchase, basically.”

As in-app payment options evolve so too will the services offered by Cloda, which counts Badger & Dodo, Cloud Picker and Meath GAA among its clients. It is running in trial format with several larger Irish companies and is aiming for a European expansion.

“Eventually, in-app pay will be there, and that’ll make things even easier for both us and the client,” Waldron, the firm’s chief financial officer, said. “It’s imminent, and at that stage we’ll add that to our suite of offerings.”

For now, Cloda, which is currently operational in beta mode and plans to roll out properly in the coming months, is attempting to raise the funds it needs to fuel its growth. It aims to complete a “significant” funding round by the first quarter of 2022.

“Conversational commerce is estimated to be worth $290 billion globally by 2025,” Waldron noted. “It’s not a totally new idea we’ve come up with, but we think it’s in the right place at the right time.”

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