PaymentGenes
QUARTERLY FINTECH MAGAZINE BY PAYMENTS PEOPLE. FOR PAYMENTS PEOPLE.
DIVERSIT Y, DATA &
THE FUTURE OF PAYMENTS FEATURING:
PGInterim plus more inside...
Q4 2019
FOREWORD Dear readers, 2019 has already been an exciting year in our world. We have seen a number of big moves including mergers (think Fiserv & First Data), acquisitions (WorldPay by FIS) and product launches (Stripe Capital). In fact, 2019 has already seen three of the four largest FinTech M&A transactions ever. Here at PaymentGenes we have also experienced fantastic growth, which has resulted in the expansion of our team, and the launch of our latest product - PGInterim. You can read more about this exciting new part of our business on page 10. This edition of our magazine hosts some fantastic articles from a variety of contributors. In the centre of the magazine, on page 12, you can read the first of a four-part series of articles by G+D Moile Security, in which they share their thoughts on the future of payments in the era of digitalisation. Keep an eye out for the next 3 editions of our magazine for their follow-up articles. You can read about the work that the European Women in Payments Network are doing to champion diversity in our industry on page 4. On page 16, leading FinTech commentator Marcel van Oost shares his overview on the next big thing for banks: Generation Z. Don’t forget to take a peek at our Events Partner page (19) for your chance to score discounts for your favourite upcoming events. As always, it has been a pleasure to bring you this edition of the PaymentGenes FinTech magazine and I sincerely hope that you enjoy reading it.
See you again in December!
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Justin Reid-Ross. Executive Editor and Head of Marketing
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10 PGInterim
CONTENTS 10 12 4 European Women in Payments Network
Introducing: PGInterim
G+D Mobile Security
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19
Generation Z by Marcel van Oost
PaymentGenes Top Job Picks
PaymentGenes Events Partners
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European
WOMEN in Payments
Network
The European Women in Payments Network (EWPN) is the first and only panEuropean not-for-profit organisation for women working in the Cards, Payments and FinTech industries in Europe. EWPN provides a platform that inspires, empowers and mentors women in financial services to help them realise their full potential and position themselves for greater personal success whilst continuing to develop and contribute to their industry. EWPN is the first European-wide platform specific to women working in Banking, FinTech and Payments irrespective of the level they have attained in their careers. EWPN’s primary objective is to champion diversity and inclusion (not just gender) in the financial sector. We recently spoke with Miranda McLean, Global Head of Marketing for Banking Circle, and Executive board member of the EWPN to get her thoughts on the current state of the industry.
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Miranda has built a considerable reputation for developing and executing successful marketing strategies for a wide range of financial services businesses over more than two decades. She has held senior positions at Reuters, Standard and Poor’s, LexisNexis, Equifax and Ukash. In 2015 she was appointed by payments start-up, Banking Circle (then known as Saxo Payments), to create the brand identity and marketing strategy which has taken the cross border financial utility to a multi-million-dollar business in less than three years. As a highly motivated marketer, Miranda believes barriers to opportunity only exist if vision is blinkered. She has committed to self-development and improvement at every stage of her career to build a wealth of experience in global and European brand development, execution and management. She is utilising her experience in the field of marketing to hone the messages and extend both the reach and influence of the EWPN.
Miranda McLean Global Head of Marketing Banking Circle
EWPN Exec Board Member
What is the most exciting thing about FinTech for you personally?
The opportunities. With new tech being developed all the time, the market is rapidly moving and broadening its reach. New developments offer opportunities for companies and financial institutions to work together and deliver solutions which meet the needs of both consumers and businesses in more sustainable and efficient ways than ever before. More and more people of all ages and backgrounds are entering the FinTech industry, bringing diversity and unique experience which enables the rest of the market to truly flourish. This is an extremely exciting time to be in FinTech; it will only be limited by the imagination – or lack of it - of those in the industry.
To date, in your view, what disruptors have caused the most innovation in the industry? I believe that innovation in this industry has come, not from any single disruptor but from the impact of the change in approach driven by the combined forces of the huge variety of FinTechs and banks now operating in the sector. The shifting tide away from each financial institution seeking to provide solutions to meet every financial need of their consumer and business customer, towards an ecosystem model where providers work together with third parties to provide the best solutions, has had a
significant impact and this will continue to gain momentum. No longer are smaller banks and FinTechs at a disadvantage due to lack of marketing budget and a smaller customer base. Working with other companies they can compete against incumbents. In fact, they can even work with those incumbents to take traditional propositions into the new world. As such, incumbents are no longer restrained by legacy systems. Instead they are working with third parties to deliver tailored, purpose-built, efficient and cost-effective banking solutions without having to commit huge amounts of in-house time and investment in building, running and maintaining new products and solutions. With this burden removed from their shoulders, incumbents can focus their resources on the all-important customer relationship, safe in the knowledge that their customers have access to the best banking solutions available. Financial utilities, like Banking Circle, are fundamental to this change, building and managing non-core functions such as cross border payments and lending.
What does the EWPN hope to see more of in the industry? The members of EWPN are committed to creating a more diverse and inclusive industry which celebrates and supports women’s achievements across the payments ecosystem and inspires future generations of girls into the sector. We believe this is vital for ensuring the sector remains disruptive for the wider good of society. It is therefore extremely encouraging to see more women than ever launching new FinTechs in 2019. This increase in gender diversity is a topic we look forward to raising through our EWPN partnerships as well as at our own events.
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PAYMENTS DATA | 2019 by: Jamyl Jonker marketing manager, partnerships & media
DATA IN THE CURRENT AGE In the current digital age, we no longer question the importance and value of data. With a variety of public discussions and uproar surrounding data privacy (eg. Cambridge Analytica), the topic seems to become increasingly important. If we look at the tech giants of the world; Google, Amazon, Facebook, Uber, Netflix etc. it is quite clear that these companies thrive off data. The data input by the vast number of users allows these companies to improve their business operations to such an extent that they have a major competitive advantage over others in their industry. The benefits and use of data in the payments industry is no different. Companies such as for instance Adyen, Amazon, Paypal, WeChatPay and AliPay all use payments data to outperform their competition and leverage this collected data to provide better services.
DATA IN THE PAYMENT INDUSTRY Payments data is collected, analysed, used and stored at various points during a transaction that is performed by core payment services (Card, mobile, wallet, cheques, ATM). Originally, payments data played a vital role in offering security during the journey that transactions made to reach their intended destination. Nowadays, however, payments data can create economic value in the sector through the selling of this raw “payments data�, the understanding of data analytics and the implementing these findings, among other things. Furthermore, payments data is used to create customer segments, statistical reports, provide personalised products and services, as well as recognise cross-selling possibilities, security and fraud related issues, and finally, to process payments and meet regulatory requirements. The value of data is therefore very clear. To get a better understanding of why payments data provides unique insights and why the companies that collect and process payment data have a privileged position have a look at the picture below. Payments processing companies have insights into data that very few have. Along with that, they also have a broad view on other consumer and merchant data. This data, in the broadest sense, is obtained in two ways: Data is actively provided by the end users, or data is passively obtained. (See graph on the next page: Payments Providers have particularly good acces to consumer and merchant data)
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McKinsey&Company
THE KEY DRIVERS OF EVOLUTION IN PAYMENTS DATA How has data in the payment industry gone from being solely intended for a transaction to go from point A to point B safely, to a key insight that creates economic value? Technological change has led to payments data being collected, processed, shared and used in digital form at lower cost and on a larger scale than ever before. The ability to access these increasing amounts of data, offers potential market opportunities such as business models based on collecting and processing data. This is all driven by an increase in computing power, affordable storage, and software that can analyse large data sets to gain new insights. The changes in payments data collection is not solely driven by technological changes. We, as “end-users�, are a big driver of the increased amount of payments data that is available. With a global increase in the use of non-cash methods, the amount of payments data that is being generated is naturally growing. Regulatory requirements within payments are opening up payment data to third parties. The most recent and disrupting development within the payments data sector involves open banking/ PSD2, allowing 3rd parties to collect, process and share payments data (with customer consent). With PSD2, companies can now combine data of individuals and payment data, which is GDPR compliant (for now).
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BIG TECHS AND PAYMENTS DATA BigTechs are increasingly becoming active on the European payments landscape. With the precise information they already have on large numbers of personal data, payment data can give additional key insights into consumer practices and predilections. BigTechs such as Amazon, Facebook and Google have both a payment institution licence and an electronic money institution license. Allowing them to offer peer-to-peer payments. As of 2016, the Chinese Alipay also holds both licenses. BigTechs such as Alibaba, Amazon, Facebook, Uber and Tencent impose a threat to incumbents. This is due to the fact that BigTechs have the size, international presence, UX, financial strengths, IT excellence, customer engagement, outstanding data capabilities, and the newest technologies. Should banks and end-consumers be afraid of these giants entering financial services taking into account that they will be able to combine vast amounts of personal data with financial data? Or should we embrace the efficiency and innovation that BigTechs will bring to the financial services industry?
DATA TEAM PAYMENTS Also looking to gain a competitive edge in the current payments industry that is increasingly turning towards data for successful business operations? Function titles focused on data that a payment company should consider: • Head of Data • Data Architect • ETL Developer • (Big) Data Engineer • Data Scientist AI/ML • Marketing Intelligence Analyst • Data Management Specialist • Project /Program Manager BI • Business (Data) Analyst The positions above are integral in the creation of a payments data team. PaymentGenes’ latest product, PGInterim specialises in placing temporary experts in these roles. To hear more about how we can build your payments data team, read our interview with PGInterim Director Chirstian van Cosburgh on page 10. If you are curious about how leveraging data can help your payment business grow, or if your payment business unit is in need of specialst professionals, please get in touch via info@paymentgenes.com
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Our payments knowledge sets us apart from any other recruitment firm. We are experts in our field and offer a unique consultative approach. We are passionate about connecting people and we want to bring the human element back into our field. We strive to be “Recruitment. Personified.�
PGServices PaymentGenes is your one-stop shop for all your payments industry needs. You can come to us for: Recruitment & Executive Search
PGInterim
PGConsultancy
PGMarketing
info@paymentgenes.com
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PaymentGenes is proud to launch its latest product, servicing the fast-growing temporary recruitment market. We chatted with Christian van Cosburgh, Director of PGI, to hear more about his experience in launching this exciting new product.
To get in touch with Chris, you can connect with him on LinkedIn or email him at christian@pginterim.com. Don’t forget to follow PGInterim on LinkedIn to stay up to date.
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Chris, tell us a bit about yourself and your background in recruitment. A large part of my youth was spent living abroad. Growing up in an international environment always fascinated me and when it came time to start my career, I looked for something similar. Deloitte was the organisation where I found this. I worked there as a corporate auditor in the TMT industry and for financial institutions before starting in recruitment. Contrary to what people might believe, as an auditor you learn more than just about financials and data. It also allows you to see organisations from within, and to understand how they are operationally and culturally organised.
I wanted to discuss the challenges he ran into when setting up the business in 2014. It became apparent that they had already been playing with the idea of setting up a contract division for quite some time, and one thing rapidly led to another, as we shared the same values and consultative personal approach. I also should not forget to mention that the team at PaymentGenes is one of the most welcoming, dedicated and experienced I have met in my time in recruitment.
You’re busy setting up PGInterim, what are the challenges you face in starting a new branch of an existing business?
After more than 6 years however, I wanted to use this experience in an advising role on a more personal level. That’s when the world of recruitment came knocking. Using the knowledge I had gained, I was able to understand and support clients and candidates coming from a variety of backgrounds. This motivated me even more, as I got the chance to work closely with people every day.
PGInterim operates by itself, but uses PaymentGenes’ existing infrastructure. The challenge is staying up-to-date with the database. You need to act fast and be precise in the contract market.
What excited you about the opportunity to join PaymentGenes and to set up the Interim recruitment arm of the business?
To add to that, the continuous change in law and regulations is something we need to keep a close eye on, especially here in the Netherlands.
Initially, I intended to start independently as an interim recruiter and eventually create a partnership with someone who has an identical approach and value set. That second part ended up going a bit quicker than expected. I called one of the Co-Founders of PaymentGenes, who is an old colleague of mine from Deloitte.
Also, the current technological revolution of our clients, as well as the growing economy, results in greater scarcity of expert contractors.
What are the major differences between interim & permanent recruitment? The reason for hiring a contractor is because it relates to either a specific project, the requirement of certain specialized expertise, a temporary replacement
or simply that there is no permanent candidate available (soon enough) in the market for a client to get their work done. In other words, there is a problem and an immediate solution needs to be provided by a contractor who is up and running in an instant. We therefore look more at past experience from a technical perspective. In permanent recruitment, we focus more on the personal and professional growth path of the candidate and how they can develop and integrate into an organisation in the long-term.
What will the key focus areas be for PGInterim and which sectors will you operate in? We will focus on Data & Analytics, Change Management and Compliance for now. Being active in the Payments and Fintech sector we have been receiving an increasing amount of requests from our clients for expert contractors. PGInterim, however, is not limited to these sectors and we are now also working with numerous different clients where the expertise of contractors can be of value as well.
When will PGInterim launch to the B2B market? Internally, we have been working on PGInterim with PaymentGenes for the last few months and we have already been informing clients and candidates about our plans. We officially went live on Monday September 9, 2019. An exciting moment for both companies!
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Meet the Expert: Gabrielle Bugat, Head of Division for Financial Solutions at G+D Mobile Security gives her view on the Future of Payment in the era of Digitalisation. While simultaneously being encouraged to go paper free when it comes to our bank statements and use biometric authentication for payments. And even if many companies have taken a new approach in their digital strategy, these outdated processes are holding back the development of customer friendly services, as they aren’t putting the customer and the customer’s security first.
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W
hile the mainstream media discusses the idea of a cashless society, the payments industry is already talking about the disappearance of payments completely. Not disappearing in the sense that vendors will give away their goods for free, but that the act itself will slip into the background, unnoticed, playing with the ideas like paying by using AI for behavior tracking and customer recognition.
The digital era is making our relationship with money both more complicated and easier. Our “Money” is moving beyond the physical to a string of code in cyber-space, allowing you to pay on the fly, tap&pay, just swipe it and go. But financial services companies are struggling to keep up. Mostly due to legacy systems - built to secure the company itself. As customers, we are overwhelmed with paperbased forms and hard copies of utility bills or driving licences to authenticate ourselves.
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New products and financial tools need to promise simplicity, high levels of security and convenience. Our aim is to look beyond our customers, to understand what our customers’ customer needs.
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Even though regulatory initiatives such as Open Banking and PSD2 are the drivers of much needed change, having the rules of digital business changing, companies are still not keeping pace with the needs and wants from their customers. But it is those companies that satisfy today’s digital expectations that will be able to make the most of tomorrow’s opportunities; the financial world is not only digital, but mobile, cross-border and omnichannel. As security is a critical element of this digital transformation, the risks of a security failure are high when today’s payment providers need to be able to provide systems that work anywhere, anytime and on any device. Here the payments industry need to move to the next level in order to meet the demands and transformational potential of today’s omni-channel ecosystem. The need for convenient ways to pay securely and create innovative payment processes, are the drivers at G+D Mobile Security. Always with the customer at heart and with security by design!
G+D Mobile Security is a part of the G+D Group (founded in 1852) with more than 11,000 employees worldwide. Our 5,300 experts in over 40 sales and partner offices all over the world are glad to advise and support the financial industry with years of experience and comprehensive solutions that allow meeting the challenges of a connected financial industry and
capitalize on its opportunities.
Interested in our offerings for digital payments?
Download our latest case study!
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Which
NATIONAL AUTHORITIES
postponed the SCA Deadline? DNB intends to allow market parties that were unable to prepare for the introduction of SCA for credit card transactions in time, to have limited additional time.
BaFin announces postponing SCA-rules for online credit card payments in Germany (August 21)
The French regulator unveiled a 3-year strong authentication TRANSITION period
FCA, acting on behalf of the Bank of England, has drawn up an alternative timetable for the transition. The Bank of Spain announced on 11 September 2019 the additional period to migrate to SCA. The Announcement also states that issuers and acquirers need to submit migration plans.
FIN-FSA has on 5 September 2019 published a supervision release, stating that it will temporarily not impose administrative sanctions on issuers and acquirers for not authenticating cardholders in relation to online card payments.
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Rep o r t S o urc e : w w w. me rc h a nt p a ym e nte c o sys te m . c o m
Industry Perspectives MPE asked various Industry stakeholders after September 14 to provide their feedback on the following question :
“Do you think the industry is heading into PSD2 & SCA chaos after September 14?”
Ruca Sousa Marques, CEO, Switch “I see lots of similarities between SCA and the SEPA ISO 20020 implementation couple years ago. Enforcing any standard in more than 4000 financial institutions across 36 countries is a massive endeavour, especially when it requires significant investment in critical infrastructure updates. Regardless of its necessity, structure or applicability, enforcing any piece of legislation in a complex ecosystem like the payments industry leads to a natural ambiguity of the requirements, which will inevitably result in extensions and implementation deadlines. This was the case with the SEPA Credit Transfer (SCT) amd SEPA Direct Debit (SDD) schemes, and I expect the same to happen to SCA.”
Eliad Saporta, CEO, Coriunder “I believe the chaos hasn’t started yet, although the due date has passed, significant number of countries announced a delay in implementation. We have advised all our clients to run a PSD2/ SCA impact analysis to better understand how the change will affect their current approval ratios and payment flows. As part of our ongoing work with our PSPs we are recommending them to work with an MPI provider directly, rather than relying on their partners, and in doing so, have a seamless payment flow regardless of who the acquirer is that the transaction should be routed to.”
Ron van Wezel, Senior analyst, Aite Group “In my opinion, the EBA’s decision to allow national regulators to phase in SCA and avoid a big bang scenario was a wise one. This will give stakeholders time to transition to the new situation. Unfortunately there is no central governance for the SCA migration on a Pan-European basis. That means that merchants and their PSPs have to deal with different country migration plans and implementation speeds. This might create some turbulence, but I don’t expect chaos.“
Visit www.merchantpaymentsecosystem.com/files/documents/sca_ transition_migration_plans_across_europe.pdf to read the full report.
MPE is the Europe‘s Largest conference & exhibition and discussion platform for merchants, acquirers, PSPs, and Point of Sale vendors, established companies as well as start-ups, fintech, regtech and paytech and everyone in between. Rep o r t S o urc e : w w w. me rc h a nt p a ym e nte c o sys te m . c o m
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Generation Z an article by Marcel van Oost
No more millenials. GenZ is the next big challenge for banking.
A
new breed of banking startups wants to lock in customers while they’re in high school and college. As the ecosystem of millennialfocused challenger banks gets crowded, a growing number of startups are focusing on Gen Z customers, or those who were born in the mid-1990s onwards. The market is big and it’s a population group that will soon outnumber millennials. This generation, just like millennials, are underserved because the larger financial institutions don’t see it as a profitable enough segment. The objective of these Gen Z focused challenger banks is to become the customer’s primary financial provider as early as possible. The hope is that by acquiring customers early in their financial lives, they can build a long-term relationship. Banking platforms that focus on these customers include French startups Kard and PixPay and U.S.-based challenger banks Current and Step.
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pixpay KARD The banking alternative of the new generation, Parisbased Kard, was established in 2018 and already managed to attract a €3 million investment from Kima Ventures along with few other investors. Targeted at Gen Z it has all the characteristics of this generation: mobile, social, data-driven, authentic, and free. Regular functions are offered, such as sending and receiving money instantly, receiving a notification for each expense and managing your budget simply. Plus you can interact with your friends. In May 2019 they opened a waiting list to start preregistering their first clients. In less than a week over 10,000 future Karders signed up.
Founded by group of parents in beginning of 2019, Pixpay will offer children between the ages of 10 and 18 a mobile bank account, contactless payment card and the option to use Apple Pay and Google Pay. Slated to launch in France for the new school year, the service will cost EUR2.99 a month. An app will help with spending and saving management, providing real-time purchase notifications and analysis of where money goes, along with offers on popular brands. Meanwhile, parents will be able to set spending limits, block purchases from some providers, and offer financial incentives for carrying out tasks such as household chores. The French digital banking startup has raised EUR3.1 million in a funding round led by Global Founders Capital.
Current The company first launched its Visa debit card and app for teens and parents in 2017, with the goal of giving parents a more modern way to dole out allowances and reward their kids for household chores. Through the app, parents can set chores, transfer funds and track their child’s spending. They can also set limits on how the money can be used, including restrictions on the amount that can be pulled out of an ATM as well as ways to block spending by category. Meanwhile, by offering the funds on a debit card, teens get a sense of autonomy as well as a way to practice money management and financial discipline. The company to date has 240.000 users. Its adult user base ranges from young parents in their 30’s up to grandparents, it says, while the teens and young adult users range from 13 up to college students in their 20’s. The future of its business model involves opening up offerings to broader group of customers. In February of this year, the company rolled out checking accounts open to anyone, with a free basic account and a premium account for $4.99 a month with added features
including early direct deposits and gas holds that are instantly credited to customer accounts. Current is backed by $10 million from EXPA, QED Investors, Cota Capital, Fifth Third Capital and others. Recently the company also came in the news after the launch of Facebook’s crypto Libra. Founder and CEO, Stuart Sopp, claimed that Facebook copied their logo. Hopefully they can use this free publicity to their advantage.
step Step is building a mobile-based bank account, held with Evolve Bank, specifically designed for teens that is interest bearing and has no hidden or overdraft fees. The mobile app is linked to a Mastercard and lets users send and receive money instantly, shop online or in-store as well as use Apple Pay and Google Pay. Stripe, who also lead their latest $22.5M series A funding round (which also included celebrities Nas and Will Smith as investors), is providing issuing and processing technology. Unlike Current, which charges a subscription to use its service, Step aims to be a fee-free bank for consumers. Users don’t have to pay for their account, and there are no fees for things like overdrafts. Instead, Step’s plan is to generate revenue
through traditional means like interchange fees and by way of lending practices, once it has established a deposit base. The company pays a 2.5% interest rate on deposits, offers a round-up savings feature and a range of budgeting tools and supports free instant transfers between Step accounts. It also provides access to a network of 35,000 ATMs with no fees. Parents get oversight into their teen’s spending, providing the opportunity for them to set limits and guidelines as well as have a view into card use. Beyond simply facilitating mobile banking, Step’s bigger goal is to teach teens to become financially responsible. “Schools do not teach kids about money. A lot of families don’t talk about money. And it’s a crucial life skill that’s not really addressed properly when people are growing up,” says Step CEO CJ MacDonald. While challenger banks for Gen Z customers are reaching an underserved group, the sustainability of the business model is still yet to be proven. The revenue model is difficult to justify if you are an investor chasing quick returns. However, if Gen Z-focused challenger banks can acquire a critical mass of customers who don’t become big bank customers, they can build out this relationship and bring in more financial products that fit the stage of life when they get older.
Marcel van Oost is a serial FinTech entrepreneur from Amsterdam who currently acts as an agent and analyst for the world of Digital banks. He works as a strategic advisor for several FinTechs and challenger banks worldwide, and is well know for his daily news updates from the industry through newsletters and Linkedin. Visit www.marcelvanoost.nl for more information.
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PaymentGenes Top Jobs VP Partner
Business Growth
Management
Manager London
Get in touch with: Marek Buenting +31 615642798 marek@paymentgenes.com
Lead Product
Berlin
Get in touch with: Diederik Klopper +31 642672190 diederik@paymentgenes.com
Pre-Sales
Manager
Consultant
The Hague/ Brussels
Paris
Get in touch with: Anna Velly +33 648494461 anna@paymentgenes.com
jorrit@paymentgenes.com
Head of
Team Lead
International Expansion
Risk Operations Munich
Get in touch with: Zsofia Toth +31 611075944 zsofia@paymentgenes.com
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Get in touch with: Jorrit Wijtsma +31 654644783
Europe
Get in touch with: Thijs Moser +31 640532818 tmoser@paymentgenes.com
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Our expertise lies in C-level, senior & middle management, and senior experience roles.
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