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You Visit Tour. Webb Lion Fountain. June 1 2017. Photo David B. Hollingsworth

Young ODU Software Developers Are into Qwyvr

"Qwyvr." Remember that name, which is pronounced as quiver. It just may be the next big thing in mobile payment systems that use smartphones as "wallets."

"It could be another PayPal," says Bryan Sory, the Navy F-18 pilot who founded and leads Qwyvr LLC.

"This is the future," says Ajay Gupta, pointing to the Qwyvr app on his smartphone. Gupta is an Old Dominion University computer science faculty member who also has an M.B.A., and a background himself in entrepreneurial activities.

In the spring of 2014, Sory and his main partner, another Navy F-18 pilot by the name of Dave Whitmer, brought their partially realized idea for Qwyvr to Gupta and asked for software development help. "We had been involved (on the West Coast) with a third-party developer and we had overspent," Sory explains. "We realized we didn't have enough runway left to get this thing to market." That is Sory's jet-pilot way of saying that the startup company's money would have run out if he relied upon "high burn rate" developers to make Qwyvr a reality.

Enter Gupta and an eager band of eight ODU computer science graduate students who took to the Qwyvr challenge with a dedication and speed that Sory calls "incredible." Gupta and the students are affiliated with ODU's Department of Computer Science Software Development Lab. Qwyvr has given Gupta and the lab research grants to pay for the software development.

After eight months of work with the ODU team, the beginning of 2015 finds Sory confident enough to label Qwyvr as complete in its alpha version and nearing beta-minus status that will allow the system to reach a limited marketplace. "We need it in the App Store, and at that point we can get solid feedback - what users love about it, what they hate, suggestions they have. From there we can move to true beta status."

Sory's tells his story during an interview in an ODU computer science conference room where he sits beside Gupta and across the table from the grad students who have worked on Qwyvr. All of the students have their smartphones out, experimenting with the Qwyvr app and clearly wanting to move on to a demonstration that reveals what they have accomplished.

Their accomplishment, according to Sory, is unique. Qwyvr Pay, which is the core product of the company, is what the ODU computer scientists have developed. It is different from other digital wallets such as Apple Pay or Venmo in that it is a cash-based digital payment system that does not use credit card networks. It is also the only platform that uses Bluetooth Low Energy wireless technology in a consumer-to-business context for no-interaction - or "invisible" - payments.

It fell to the ODU computer scientists to make Qwyvr Pay user friendly, which, Gupta says, was no small task. The software had to be multi-platform in range, integrated with Google's Android as well as Apple's iOS operating systems. The "onboarding" process also had to cover two imperatives: to be seamless and secure. The process starts with a phone number, scanned id and random questions (pulled from the user's credit history) that must be answered. Later comes verification of the bank account from which Qwyvr Pay will pull a user's cash. From there, the user can use his or her smartphone, via the app, like a prepaid debit card for transactions with other Qwyvr users or Qwyvr-ready businesses.

"The work involved a lot of late nights," Gupta says, "and lots of battles with the entrepreneurs." This quip is followed by a smile directed at Sory, who nods his agreement, and the ODU computer scientist adds, "Entrepreneurs think they know what they want, but they don't always know. They allowed us to use creativity. Otherwise, it would have been no fun for us."

As for Sory, he acknowledges that Qwyvr is not quite ready for liftoff. "Building a payments network isn't for the faint of heart," he says. "There are times when I think about our decision to do this and wonder: Why didn't we just start a fly-fishing business instead! We get the perpetual chicken-or-egg thing a lot. A potential user asks, 'Why would I use it if there aren't that many businesses on it?' And the potential merchant asks, 'Why would I use it if there aren't that many people using it?' And seven more hairs that I badly need fall off my head."

Despite this moment of despair, it is clear from even an hour's interview with Sory that Qwyvr is a business idea he is committed to. In February he retires from the Navy and by then he hopes to have a better idea of just how high Qwyvr will fly.

This entrepreneurial idea came to him and Whitmer (who is still stationed with the Navy in California, but is due to get orders to join Sory in Hampton Roads soon) after they had been part of a Bitcoin pod on the West Coast that merged computer resources of its members to mine for Bitcoins. The two men came to appreciate some aspects of Bitcoins - rapid throughput transactions and inflation-proof money, for example. But they also decided that Americans are not ready to adopt digital currency en masse.

"So," Sory explains, "we asked: How could we eliminate financial friction and give people and businesses a transactional platform that did for both sides - consumer and businesses - what current systems can't do?" His thinking was influenced by his personal disaffection for easy credit and by the resentment he sees building among merchants about the cost of credit card transactions.

"I get a little dumbstruck when I read any economist offering up the tired, 'We just can't quite put our finger on why Americans' savings rate is so low.' Really?" He believes credit cards are the villain, and, in the end, bad for the economy because of runaway consumer debt and the inequities of richer people with credit cards actually being subsidized in the marketplace by poorer people using cash. Those subsidies come from merchants raising prices to accommodate the money they have to pay credit card companies for each swipe of the card.

Typically, the merchant loses 3 percent per transaction, but it can be much more. Sory offers an example based on his partner Whitmer's donut habit. "He's got a local donut place he likes and they pay 3 percent per transaction, plus 50 cents per (swipe). So their loss rate on a $6.14 tab is 11.14 percent. Obviously, the smaller the transaction, the deeper the cut, but think about all the low-margin businesses out there with an average sale of less than $10. They're getting stabbed pretty deep by using cards."

That same transaction with Qwyver, according to Sory, would work like this: "Let's say the merchant gives a 1 percent discount to Qwyvr users and pays Qwyvr 1 percent. That's a 2 percent loss rate for the merchant and 6.14 cents back in the customer's wallet."

The typical American consumer uses credit cards because swiping is a painless - and sometimes reckless, according to Sory - way get the goods they want. As much as they object to credit card fees, merchants feel they must honor credit cards to bolster sales, and, besides, cash transactions carry "fees" of their own. Merchants spend a lot of time and money guarding against counterfeiting, theft and incompetent accounting, among other cash management issues.

It is with these arguments that Sory builds his case for Qwyvr. He is convinced that merchants are simply not going to tolerate the current credit card system much longer. In addition to the per swipe cost savings, Qwyvr cuts down on the customer payment account information that merchants need to store, thereby lessening the chance that hackers could steal sensitive customer information.

Qwyvr also has another product that Sory believes could revolutionize transactions with vending machines, coin laundries, car washes and in other unattended sales environments. It is called Qwyvr UE or Bertha, a bolt-on box that functions across Bluetooth Low Energy and allows smartphone tokenization of disconnected devices to execute transactions. "This eliminates the requirement for vending operators to buy Internet connectivity, which is a costly and unprofitable proposition," Sory says.

The Bitcoin buzz early this year was responsible for Sory looking to ODU for help. A Hampton Roads entrepreneur who had invested in Bitcoins - and met Sory in the process - suggested that he get together with Gupta.

"A lot of folks say that you can't start a tech company in Hampton Roads," Sory says. "My answer is, 'Why not? Have you seen how many bright, young, hungry coders there are at ODU?' I've dealt with a lot of software companies and I have never been part of a faster, leaner bunch than Professor Gupta has assembled at Dragas Hall."

This month, Sory reports that he has inked deals with several Hampton Roads food trucks, a major e-commerce player and four retail outlets in Pittsburgh ("of all places") to allow payment via Qwyvr. "I do think we're well positioned to compete in the barren wasteland that is almost exclusively held by Paypal. And this platform will be known as one born in Hampton Roads."