The payment market is characterized, on the one hand, by the high level of competition from payment services and IT companies and, accordingly, by low entry barriers to the market, on the other hand, by additional competition in the face of traditional banking that dominates the European region. The boundaries of the market for Kevin largely depend on what kind of PSD2 will be implemented in reality – but even with a favorable situation in the legal field, nothing prevents the nearest competitors - the same PayPal – to take advantage of the new opportunities in the European market, therefore, because of low market advantages are depreciating the advantage of the first player in the market. Kevin, due to the lack of a marketing campaign, will have problems with rmarket acceptance. Kevin's business, by virtue of its reliance on PSD2, closes around the Eurozone, as it is unlikely that regulators in other countries will come to the same vision of the institutional structure of the financial market in the medium term, which in advance puts the cross on the full-fledged Kevin international expansion service offering.
At the moment Kevin underestimates the potential of its solution for aggregating accounts – in its current form for the user is not obvious the difference between it and the same PayPal with its binding of cards. Debit card Functionality does not differ in variety and clearly loses to traditional competitors: the same cashback applies only to spending in virtual currencies, which, considering only about 500 thousand VC users (virtual currencies) throughout the EU, will be of little relevance to the Kevin audience. In general, Kevin is not able to oppose anything to loyalty programs in the context of the so-called «Daily banking».
In an effort to maximize the economic attractiveness of its card products for customers, Kevin has significantly limited the channels for monetizing its services. The company does not disclose any information about the significant points related to the pricing of both its own services and those placed on the platform by the developers. Part of the revenue will come in the form of tokens and, possibly, crypto-currency, therefore, the company takes on currency risks in connection with the chosen model. The need to use the token to gain access to Kevin services narrows the circle of the potential audience of the project to just 500,000 + people dealing with the crypto – currencies in the EU
The company does not provide a mechanism to ensure profitability to the token holders. The structure of the distribution of tokens is very untypical – 100% (250 million) is for sale, there are no attempts to reserve part of the offer of tokens as a compensation package to the team members in order to stimulate the adoption of weighted long – term management decisions, and for secondary market operations for management purposes dynamics of the KVT price. The company does not provide financial forecasts for its activities. Kevin clearly overestimates the final effect of marketing activities – the customer base at the level of 4 million users in 2 years, i.e. an average of about 5,500 new customers every day - obviously trying to find justification for a bloated 40 million marketing budget. More than 140 million potential charges are not described in terms of their spending directions. There is no scenario approach to spending the funds collected within ICO. The size of the ICO round, even at the soft cap level, is significantly higher than the average size of a venture involving early stage venture capitalists, approximately 6 million (according to Pitchbook data).
The lack of top-tier legal consultants in the project. Most of the team, including the management core, is not represented on LinkedIn - there is no way to verify and supplement through the social network the information about the team members in white paper. Not all the members of the team respond to the position they have taken from the point of view of their previous experience, in particular, Sergei Kolodii, who came to the position of Director for Business Development (CBDO), a management position close to the CEO of the organization, after working in the wholesale business in commodity markets. The team clearly does not have enough sales professionals and marketing specialist.
In terms of choosing a target market for Kevin, there is a certain miscalculation related to the fact that, according to the World Payments Report from Capgemini, the whole "explosive" part of the growth of the non-cash payments market will come from developing countries – CAGR for 2015 – 2020 years promises to make up about 20% against 5.6% for mature markets of developing countries, including the selected Kevin EU. However, more targeted research - for example, the European Payments Strategy Report from ATKearney – indicates that the number of non – cash transactions in the European market will only grow with the expected CAGR of 8% in 2015-2020, while the share of cash payments, on the contrary, will decrease from 71% in 2015 to 60% in 2020. Dynamics in the B2B segment of the business Kevin – API for accepting crypto – currency payments, in fact, e – commerce – for the year 2017 is forecasted at + 14% relative to 2016 – the market volume of online retail by the end of 2017 promises to make 602 billion euros, and in the EU there are still regions with a relatively low level of penetration of online purchases, which guarantees the growth of the segment in the future. However, it should be reported that the payment market is characterized by low barriers to entry and a high level of competition both in its traditional (PayPal, VISA and Mastercard, etc.) and crypto-segments (CENTRA TECH, TENX, WIREX, MONACO, XAPO, CRYPTOPAY and others). And, unfortunately, Kevin does not currently offer potential customers the number of its own solutions, sufficient to compete in the traditional plane – and its stake on the platform component associated with the aggregation in the Kevin mobile app of the grocery solutions of other financial organizations depends heavily on, first, whether Kevin will receive a new type of payment institution's license or not, secondly, in what form the PSD2 Directive will be introduced in the regulatory base of the EU payment market, and thirdly, what number of institutions will go to the meeting Kevin (if they are not really obliged to provide mandatory access), there are too many DKs in relation to the so far not existing PISP service market.
Kevin's central solution for users is its universal debit card, issued both physically and virtually. The card itself has an attractive economy for customers in comparison, probably with any retail banking or payment competitor – so, both the physical and the virtual release of kevin Card are free, both versions of the card are free in service, currency transactions and card transactions are not subject to any commissions. The cost limit is differentiated: either 2000 euros, or 20,000 euros, or a complete lack of a limit. Perhaps, the only paid services associated with the card - it's delivery and withdrawal of funds from ATMs (a fixed commission of one euro). There is also support for contactless payments. An important feature of the card is the support for payments in the crypto currency and tokens, which is carried out by converting virtual currencies to fiat at the time of payment. In addition, there is a cashback of up to 10% for card spending in the crypto currency, the size of which is tied to the number of KVT tokens on the balance of the user at the time of the transaction. Another, to some extent even more important, element of the Kevin solution for users is its mobile application, which allows you to manage user accounts placed in various financial institutions via the Kevin card. The company plans to supplement it with another solution based on AI, which is designed to provide a high-quality personalized selection of services and banking products for the specific user's requests. Among other things, Kevin plans to develop its own and partner network of ATMs that support WTO. operations with tokens and crypto-currencies, as well as API for business, helping companies to accept online payments in crypto currency / tokens.
In the Kevin business model, one of the main roles is played by the KVT-token, which is the key to accessing the company's services – on the one hand, this measure will stimulate the token rate, generating community demand for it, on the other hand, will narrow the circle of potential customers due to requirements to be ready to deal with tokens and crypto-currencies – according to the report of the European Commission, the number virtual currencies users (VC) in the EU totals only about 500 thousand people. Thus, the business model itself limits the scalability of the project. Kevin implements both the classical commission business model of the payment institution, although narrowing down the range of monetized user activities through fiat before withdrawals through ATMs, and through tokens – until access to Kevin payment services, and the intermediary platform business model for creating and placing services in the Kevin ecosystem by the developers . In both cases, the company does not disclose any information on tariffs-for example, on ways to combat the volatility of Kevin's KVT-priced services, and how pricing of third – party services hosted by developers will be regulated, not to mention their monetization by the company . In addition, the company does not provide convincing grounds for cooperation of financial institutions with it – in theory, opening banks access to their accounts will significantly narrow their own monetization opportunities, reducing their role exclusively to "insured safes."
Within ICO, Kevin plans to raise from 15 million KVT to 250 million KVT, which is roughly equivalent to a soft cap of 15 million of USD and a hard cap of 250 million USD. Kevin plans to allocate the funds to develop new financial services and expand the financial ecosystem of the company. It is noteworthy that no bonus distributions have been planned for the project team by the results of the ICO – all collected funds are directed to the development and marketing of Kevin services in the following proportion: about 15 million USD (soft cap) will be spent by the company for development in the next 2 years, "surplus" funds received during the ICO, will be sent to offices in other countries and marketing. About 30 million USD will be spent on the opening of 28 offices in EU member countries. For marketing in the first 2 years of activity, the company plans to spend 35 – 40 million USD, hoping for this period to increase the customer base to 4 million people. - extremely unrealistic assessment. Also, Kevin plans to deploy its own network of 2,100 ATMs by 2022, which may require an investment of 20 million USD. Concerning the directions of spending the rest of the amount that could potentially be collected under the ICO – about 145 million USD - the company provides neither any information in its official documents, nor the mechanism for providing the yield to holders of the KVT token. Financial forecasts of the company's activities are absent.
When assessing the team, the obstacle is that the founders and co – founders of the project are not represented in the professional social network LinkedIn, which makes it impossible to perform the initial verification of the information stated in the whitepaper. As for the competence of the managerial core, Sergey Kolodii's role in the project under consideration is not entirely clear: his main previous experience is reduced to wholesale trade in commodity markets, which does not fully meet the tasks of the current project development. The remaining members of the team as a whole are in their places – a positive moment here will be the experience of creating and successfully selling the business in the retail banking sector by co-founder of the project Tadas Tamosiunas, as well as expertise in developing solutions for instant and other payments for banks from Pavel Sokolovas – the founder of Kevin. The project also has three consultants with expertise in the field of artificial intelligence, finteсh and other directions, but there are no legal consultants on this list that could help Kevin not only organize its ICO more competently but also resolve issues related to obtaining a service initiation license payments to the EU.