Malte Klussmann of Cringle on the FinTech scene

It is your lunch break and you haven’t got any cash on you but are reluctant to borrow some money from friends or colleagues? Cringle has the solution: the app lets you square up your debt immediately. Co-founder Malte Klussmann talks about how traditional banks and FinTech startups in the past years and why he is hoping that Berlin will be able to strengthen its position as an attractive “digital banking” location in the future.

Mr Klussmann, the IBAN number in Germany consists of 22 characters. Having to type in the number can be tedious, especially when transferring smaller amounts. With your app Cringle you offer a solution to this problem: users can send money to their contacts in a fairly straightforward manner. Sounds handy, but how safe is this process and how do you finance your service?

More than 90 percent of users of digital payment systems say that security is the most important criterion when deciding on a payment service provider. This is why security is one of our top priorities. We want both our users and banking partners to feel confident that our app is secure. One of the pillars of our business is our partnership with banks. This is why we use the same security standards that banks use. Encoding and two-factor authentication are two important examples of our security mechanisms.

More than 50,000 people in Germany are said to use Cringle on their smartphones with 1.5 million EUR having been transferred so far. What are typical situations in which Cringle would be used?

Most of our users use Cringle when eating out with friends or acquaintances, for example during lunch with colleagues. In addition, Cringle is often used during leisure activities, when going to the cinema for example, or to pay for transport expenses for taxis or car-sharing services. A friend buys the cinema tickets online or pays for the car-sharing service and the others simply “cringle” their share of the bill.

This surely only works when all of your friends have Cringle installed on their smartphones?

Not at all. You can send money to friends who do not have the app on their smartphones. Money can be sent to any mobile number. The recipient is sent a text message with a link to an encrypted website where the details of the account into which the money is to be transferred can be entered once-only. The openness of our system is crucial to the success of our product. After all, cash and money transfers are not subject to any restrictions.

One major point of criticism is the limit of 100 EUR per month. What is the reason for this and will this change in the near future?

The limit of 100 EUR is required by the regulations of the Money Laundering Act and therefore inevitable. However, the limit can be raised for customers of our partner banks, for example DKB. DKB customers have a monthly limit of 250 EUR. The more partner banks work with Cringle the more attractive Cringle will become to their customers.

Initially, the FinTech scene in Germany was sneered at, now it is all the rage. At the moment it is undergoing an exciting phase: Your competitor Cookies has only recently filed for bankruptcy. Cringle, however, has managed to collect 800,000 EUR via Companisto, with a company valuation of 4.1 million EUR. What's more, last year you were given the German customer innovation award. This year, you were even named one of the best German FinTech startups and received an award for your excellent payment services. How much potential does the German FinTech scene hold and how active are FinTech startups in Berlin compared to startups in other locations such as Frankfurt or London?

We are over the moon with the great success of our campaign on Companisto. Not only with regard to the 800,000 EUR invested but also in terms of the fact that many of those who invested were private investors. This shows that Cringle is a solution to an everyday problem that users from very different core groups have in common. Over the years, London certainly has become one of the leading locations for FinTech. However, following Brexit we have now reached an interesting crossroads which gives us the chance to re-group and build a stronger foundation for ourselves. In my opinion, Berlin offers a very good starting point for this. There already is a very active exchange between startups and institutions to strengthen Berlin's position as an attractive digital banking location. It is good fun to be part of this dynamic.

Initially, your company was funded not only by business angels but also through the EXIST grant and the IBB. As a recipient of public funding, what was your experience with public funding instruments like?

The public funds played a crucial role in the development of our company. Thanks to EXIST we were able to focus on probing the market and initiate first projects during the early stages of our company. In addition to that, IBB offers a broad and very attractive range of funding programmes that strongly support startups financially. ProFit and the innovation assistant are two funding opportunities that generate substantial added value for young companies.

Just a note on the established financial service providers that we mentioned earlier: your company not only works with DKB but with solarisBank as well. Am I mistaken or is the relationship between startups and traditional banks starting to change, with initial rivalry turning into cooperation?

There has indeed been a shift in the way startups and banks work together. When we launched our partnership with DKB in 2014 there still was a completely different mindset. FinTechs were seen as annoying competition and were ignored or belittled. We were able to show then that a partnership holds a great deal of potential and is the best way to meet the needs of the customer. By now this cooperative approach has been established with most of the banks and startups and there is a common approach to finding solutions for the problems of the end customer.

In addition to the partnership with solarisBank you have also entered into a media-for-equity deal with Axel Springer. At Cringle, all signs are pointing to expansion. What can we expect of you in the coming months?

With solarisBank as our partner we are currently preparing to go international. In the coming weeks, we will establish Cringle in Austria and make our product accessible for customers with an Austrian bank account. After that, we will gradually tap into other SEPA countries. On top of that, we are working on promising partnerships with other renowned banks.

Mr Klussmann, finally, could you please complete the following sentence: Berlin is...

... my home town and I couldn’t imagine a better place to live and work.