PCM Volume 3 - Issue 10: Co-creation - Leading the Fintech Innovation

Vol 3. Issue 10 | October 2017

YOUR GATEWAY TO THE WORLD OF PAYMENTS

CO-CREATION Leading the FinTech Innovation

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Contents STORIES 4

Brick-and-Mortar Suffers from a Pace Problem and the Payments Industry Can Help Fix it

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Tackling the challenges of cross-border payments

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The FinTech University

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The Power of Co-creation in Payments

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Funderbeam: the world’s first “start-up stock exchange”– built on blockchain

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Payment Collective - The story of a Merchant with bol.com

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Elavon’s Jamie Walker

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Hot Jobs

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Events

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Brick-and-Mortar Suffers from a Pace Problem and the Payments Industry Can Help Fix it

by Georgina Nelson

While ecommerce, with the enviable ability to A/B test continually, is on a path of near constant innovation, brickand-mortar stores have been slower to adopt, and adapt with, technology. Much of this can be attributed to differences in culture: online lives in a world where product innovations and iterations happen constantly and a competitor is always waiting in the wings to pounce on your customers.

For these reasons, online is also much more collaborative and co-creative. The more value they can drive for their customer, the better - and if that means being open source or opening their API so that the industry can drive that value-add to their customers, that’s what they’ll often do.

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A merchant could go into an app store and self discover: business applications, such as time and attendance, accounting software etc. Doing this would enable technology adoption to happen so much faster and make it much easier for brickand-mortar to compete with online.Thankfully, some payment companies see this potential. Verifone, Ingenico, Aevi, Poynt and Clover are good examples – new smart terminal designs are ripe to deliver these applications to the retailer and have already started offering a limited number of applications through its marketplace. Many of these applications are critical, not nice to haves.

But to get there, the industry must be prepared to open up its hood and be more co-creative and collaborative.

Which is one of the reasons why online retailers have so many more tools at their disposal. Ecommerce platforms, such as Magento, facilitate the creation of new tools by having an open API that allows tech providers to build products on top of their platform, speeding delivering of new products to online retailers. They further compress adoption through their marketplace, where one can literally choose from nearly 2,000 applications from marketing to payments to CRM. But it’s much more difficult for brick-and-mortar retailers to implement new technology at an equal pace. Part of the issue is that the technology hub for these stores to gather data on customers is at the point-of-sale (card present) and the POS is traditionally a closed ecosystem. Thus, the ability to make value-added services available to the retailer at the POS sounds

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like a great idea, but until recently has simply not been done, making it much more difficult for retailers to adopt and integrate the innovative technologies needed to keep up with their own online businesses and those of their competitors.

Simply put, they have a pace problem. The good news? The payments industry is well-positioned to fix it. There is a huge potential for POS companies to co-create with tech companies in the retail space by opening up their APIs to allow them to develop applications that sit on the terminal--like an app store for the terminal.

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The speed of innovation can be dizzying. Just outside my office window, I can hear the noise of jackhammers as construction workers raise a new building. Retail has changed as much as my scenery, but there are also times when it feels as though innovation isn’t happening as fast as it could or that there is a reluctance to make changes due to lack of data or enough insight to make informed decisions.

Homebase for example streamlines an antiquated method of employee scheduling, which many stores still track in a notebook. The Clover Marketplace features 250 applications, free and paid, from both Clover and outside developers that automate almost everything for the retailer.

At TruRating, we have some amazing partners in the payments space, and we’re lucky enough (with a lot of sweat) to now be working with around 80-90 percent of the payment platforms - including marketplace providers - in our markets. It hasn’t always been an easy journey and we’re all learning along the way, but times are definitely changing - I’ve been to so many great events recently where the innovators and leaders of this sector are really building an exciting future. One that we’re delighted to be a part of.

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I firmly believe that this is just the beginning. Simply put, brick-and-mortar stores must leverage technology to remain competitive, while the POS has incredible potential to be the hub for tech adoption. But to get there, the industry must be prepared to open up its hood and be more co-creative and collaborative. By making their APIs available more readily to outside developers, they can eliminate the unfair advantage of pace that is eluding the industry.

About Tru Rating TruRating is on a mission to bring the truth back to customer ratings. Its innovative feedback solution, at the point of payment, enables businesses to simply and easily track consumer sentiment and crucially link it to spend, thereby understanding the customer experience at an unprecedented level.

Working with the biggest payment companies in the world, TruRating has already collected over 6 million ratings for its customers, which range from the largest global retailers to local restaurants and bookshops.

TruRating was recognized by Gartner as a 2016 Cool Vendor and has offices in Australia, Canada, the U.K and the United States. For more information about TruRating, go to www.trurating.com.

Georgina Nelson Founder and CEO at TruRating Georgina began her career as a leveraged finance lawyer at Clifford Chance. Georgina then joined Europe’s largest consumers’ association, Which? where she was responsible for advising the EU and the UK government on their technology strategy, as well as advising internal teams on their online propositions. It was in this role where she identified a market need for mass, representative, reliable consumer ratings.

She saw how this need could not only serve to improve the world of business but also be valuable to consumers alike. With this vision, she set about realizing the huge potential of TruRating by bringing together a wonderful team, exciting customers and partners in the payments industry with the ultimate objective to bring the truth back to ratings.

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Tackling the challenges of cross-border payments

By Matthias Setzer

Following the development and uptake of mCommerce, cross-border now represents one of the biggest business opportunities available to merchants around the globe. Indeed, recent estimates have the cross-border market growing from $402 billion in 2016 to $994 billion in 2020, with nearly two thirds of cross-border business coming from high growth markets. With high growth markets also accounting for 85% of the world’s population, it’s no wonder ambitious merchants are increasingly attracted to the business opportunities this presents.

However, in an ever-changing landscape, the payments ecosystem, historically burdened by complicated infrastructure and out-of-date processes, is one of the biggest hindrances to realizing the potential of cross-border e-commerce.

With this in mind, interoperability and open platforms are arguably critical to help break down the barriers that exist for the fintech companies, financial institutions and businesses that are trying to reach a wider audience and increasingly operate internationally.

We’re already seeing European regulators attempting to tackle these issues with the scheduled implementation of the Payment Services Directive 2 (PSD2) in 2018.

It is worth noting that the challenges of cross-border payments go beyond the complexities of legacy infrastructure and processes. Undeniably, the global rise in smartphones has fuelled the demand for cross-border trade. And as more

consumers start to purchase goods online, convenience is becoming a priority.

Although we are seeing payments technology continue to evolve at an unprecedented pace and payment providers looking to increase convenience and security for the consumer, it is crucial to recognise that the consumer is also evolving, both in terms of behaviour and attitudes.

For example, customers now take for granted that frictionless payments are technically possible and they now fully expect the market to cater to their demand to purchase from whomever they want, whenever they want. In short: the better the experience on offer, the quicker consumer uptake will be.

Unfortunately, cross-border trade has not yet caught up to this customer expectation. In addition, as cross-border eCommerce grows, consumers expect to be able to pay for products through local payment methods that are familiar to them. Alternative payment methods currently account for 59% of transactions across the globe, so offering a wider variety of payment options will be of benefit to any business.

It is these aforementioned pain points that illustrate the significant opportunity for industry players to simplify international buying on both the merchant and the consumer side. However, overcoming these challenges is as much about local market insight as it is about cutting-edge technology.

With this complexity in mind, coupled with the scale and urgency to conquer cross-border challenges, there is a strong argument for those involved in the payments industry to team-

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THOUGHT LEADERS CORNER

Matthias Setzer Chief Commercial Officer at PayU Matthias joined PayU as the Chief Commercial Officer in October 2016. In this role he is responsible for PayU’s cross-border business, global sales, key accounts, strategic partnerships and marketing & PR. Before joining PayU, he worked with PayPal for over 12 years in various roles, most recently as their Senior Director Strategic Partnerships & Biz Development EMEA, based in Luxembourg. Matthias holds a Masters degree from WHU in Vallendar, Germany.

up in order to seize the opportunity as quickly, and efficiently, as possible. At PayU, we are doing our part to make crossborder trade easier for merchants and consumers. Earlier this year we launched our PayU Hub platform.

PayU Hub aims to solve many cross-border commerce challenges by using a single API integration to help merchants access 2.3 billion potential new customers in the major high growth markets across Central and Eastern Europe, MiddleEast, India, Africa and Latin America.

PayU Hub’s hyper-local direct connections to acquirers and alternative payment methods allows merchants to see increased card approval rates and reach entire markets through alternative payment methods. This also ensures that local consumers in high growth markets can pay for their purchases using their preferred payment method.

About PayU PayU uses its payments heritage and expertise to deliver financial services in emerging markets. Our local operations in Asia, Central and Eastern Europe, Latin America, the Middle East and Africa enable us to be experts in these countries and provide the best solutions for the local market. PayU is the leading online payment service provider in 16 high growth markets, dedicated to creating a fast, simple and efficient payment process for merchants and buyers. Our 250+ payment methods and PCI certified platforms are designed to meet every consumer’s needs.

The markets in which PayU operates represent a potential consumer base of nearly 2.3 billion people and a huge growth potential for merchants. PayU has more than 1,800 payment specialists based in these local markets supporting PayU’s 300,000+ merchants and the millions of consumers making online payments.

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In addition, our recent partnership with Zooz has enabled us to co-create a solution for international merchants through combining Zooz’s state-of-the-art technology and PayU’s local market expertise, helping merchants gain access to new global markets and opportunities, all while adapting to local payment preferences and processes. This is a prime example of PayU seeking the best international partnerships to build on our heritage in payments and deliver innovations that the next generation of cross-border processing.

Legacy infrastructure, processes, local payment preferences and consumer expectations are just some of the hurdles to be overcome in order for the potential of cross-border to be realized. I firmly believe that co-creation and partnership across the industry will not only allow us to address these challenges efficiently, but also create a truly borderless economy – empowering merchants and consumers to trade freely wherever they are in the world.

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The FinTech University

by Christopher Justice Financial Technology (FinTech) firms based in Atlanta, Georgia employe approximately 150,000 associates and generate over $90billion in revenue. The industry has grown rapidly by delivering innovative new commerce solutions aimed to improve the ways that global businesses bill, account, and collect money. According to Business Insider, the explosive growth of the industry led to a slew of FinTech investments exceeding $15 billion in 2016 led by the US, Europe and Asia Pacific. Investment in the sector has grown more than 60% in recent years. Given the industry growth and desire to remain on the leading edge of technology, FinTech companies face a shortage of qualified talent to fill the 4,500 open positions.

During the 2016–17 school year, US colleges and universities are expected to award 1,018,000 associate’s degrees; 1.9 million bachelor’s degrees; 798,000 master’s degrees; and 181,000 doctor’s degrees (source). These highly capable students are ready to face the world and make a difference. While they have the basic skills to compete, they lack the necessary exposure to FinTech industry related knowledge that would improve their chances of success when interviewing. Universities typically provide education in accounting, finance, information technology, business basics, and computer science, but haven’t been able to provide the experiential learning that would help students excel when competing for high-earning roles within the industry.

To solve these challenges, more than 90 companies joined together to form FinTech Atlanta (www.FinTechAtlanta. org) and establish a workforce development group that collaborates with Universities about incorporation of essential

competencies and experiential learning-based education into their current curriculum. Ultimately, the goal is to help a college graduate appear to be more like a 2 year hire than someone fresh out of the university.

More than 40 senior executives from leading firms have adopted specific universities to lend their expertise toward the effort. Meeting with university staff and professors, the team provides valuable insight into the needs of the FinTech business to encourage adoption of industry related competencies. The team further engages with students to encourage their consideration of the industry as they consider a career where they can work on innovative solutions that drive commerce worldwide.

Working with university officials, FinTech Atlanta executives assist in launching a series of projects to give students practical experience while they develop business plans, create new applications and user interfaces, and think through solutions to relevant obstacles that face product introductions. The executives share their experiences as adjunct professors and guest lecturers, while encouraging student participation in FinTech degree programs.

Several leading Universities have embarked on the journey to better prepare students to meet the needs of the industry. The University of Georgia’s Terry School of Business is launching a new FinTech emphasis in its MBA program which will include an experiential learning requirement for students to complete a capstone project with a FinTech company. The experience would be project-based, sponsored by Global Payments

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THOUGHT LEADERS CORNER (NYSE: GPN) Gaming Solutions business unit and supported by the University of Georgia Board of Regents. This project will involve real technical and non-technical deliverables and challenge students to deliver real value. It’s large enough to warrant a structured project development methodology, a key educational goal, and can be completed with less than 800 hours of resource time. Broken into phases to ensure valuable feedback can be shared by the Global Payment’s executives, students will be graded upon the project while also gaining access to corporate leaders.

FinTech Atlanta has been encouraged by early University response, undergraduate and graduate interest as well as the increased commercial interest in industry leaders to sponsor these types of activities.

About Fintech Atlanta FinTech Atlanta is a coalition of companies (from Fortune 500s to startups) and organizations working to cement Atlanta as the recognized global capital of financial technology. The group’s priorities are to fund and fuel efforts to RECRUIT, RETAIN and EXPAND businesses and jobs across the FinTech ecosystem in metro Atlanta and the state of Georgia.

Christopher Justice President, Global Gaming Solutions business at Global Payments Christopher Justice rings over 20 years of experience delivering results for high growth payments companies.

As the President of the Global Gaming Solutions business for Global Payments, Chris is responsible for leading the company’s strategy and execution of omni-channel solutions across the globe that streamline a player’s ability to play.

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EXPERT INTERVIEW

The Power of Co-creation in Payments

>Co•cre•a•tion /kəʊˈkriːˈeɪʃ(ə)n/ *verb*: The co-operative and collaborative process of creating a product by multiple external parties.

PCM: Winston, your work is in an exciting and fast changing area of technology, involving both FinTechs and ecosystems. One topic which you are very passionate about is ‘Cocreation’. Can you define ‘Co-creation’ for us and explain its relevance to the world of Payments?

Winston: Passionate is a nice way to lead into this topic, as co-creation is an emotive word. Our society has become more specialised and complex – and our industry has responded by extending its capabilities through corporate mergers, innovation labs and by cultivating talent. But many of these acquisitive approaches are resource intensive, time consuming and largely irreversible. At IBM and many other large corporates, we have been investigating more dynamic and loosely coupled ways for institutions to co-operate over a defined period; to meet an objective and be able to easily disengage.

We have come to call this new way of working as co-creation.

The precursor to co-creation was Alliances, where competing organisations came together to achieve economies of scale, or non-competitors coming together to share expertise and capabilities. As the economic pressures changed and skills gain from these alliances evolved, these co-operations became more intertwined and started to generate new products and intellectual property (IP) – leading to co-creation.

In its fundamental form, the process of co-creation can be broken down into three phases – Prospecting, Build & Commercialisation.

The Prospecting phase begins with identifying and substantiating the idea.

It can be simple ideas or elaborate visions for complex products or services.

It results in one or more candidate solutions and a high-level assessment of the market potential. This is followed by the Build phase which finalises the cocreation partnership to reflect technical, economic/financial, and IP ownership aspects, along with a business plan

and the construction of a Minimum Viable Product (MVP). The final phase of Commercialisation takes the MVP through the rest of the product lifecycle to meet market ready status; defining the marketing, sales, operation and support for the co-created solution.

I have found Co-creation to be ideal for situations with a complex environment, many participants, strong competitive forces and processes that extend over a long value chain. All are characteristics that you would recognise in the Payment industry. We have a myriad of participants from acquirers, processors, issuing banks, card networks, independent sales organizations to gateways.

The complexity of products such as traditional payment cards combined with recent alternative technologies such as payment enabled refrigerators to smartwatches is spurring changes in consumer and corporate payment behaviours.

Likewise, blockchain technology is on the brink of changing how consumer and corporate payments are verified.

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EXPERT INTERVIEW

PCM: I can see the relevance of cocreation and no doubt, there are challenges in introducing this new way of working. What are some of the challenges and considerations facing organisations who are looking to adopt Co-creation as a way of working in the digital ecosystem?

Winston: Several inhibitors to the development of co-creation partnerships have been identified. You will probably not be surprised to learn that most of the inhibitors appear and impact the very beginning of the process, where risk and uncertainties are at its highest. These are my top five considerations when embarking on co-creation.

Perception – The perceived value of contribution and competition between potential partners is the immediate hurdle to a possible co-creation partnership. Each party must bring a level of perceived value to initiate the partnership discussion and establish a common vision. On the other hand, each party must be aware of its competitive position and scrutiny from anti-competitive regulators.

Legal clarity - The protection of partners’ existing IP together with clarity of ownership of newly created IP are important areas to put in place at the beginning of the co-creation process.

However, we must recognise that the process of innovation is naturally shrouded with uncertainty and makes it difficult to determine clarity upfront.

A governance model that allows for the systematic and periodic review of IP ownership with allowance for adjustment would be a prudent model that avoids acrimonious separations.

Organisation – Financial institutions are organised, at best, to be competitive.

Roles & responsibilities in the co-creation space will be unclear. In defining new roles and responsibilities it would be prudent to take best practises from other industries e.g. pharmaceutical, which has a longer history of co-creation. The goal is to adapt as the creation process progresses.

Financials – Establishing an internal business case for innovation is tricky.

With the added dimension of external parties and unproven revenue models, the effort is complex and sensitive. It

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should be approached with the context like R&D, where the long shots are undertaken with the expectation that not everything will pay off.

Methods and skills – As expected when breaking new grounds, the lack of defined process, techniques, and reusable assets suited for co-creation is a challenge. The challenge is not with the technology, but primarily with the governance and decision making process between different corporate entities.

PCM: Despite these challenges, are you seeing evidence of adoption and success?

Winston: Yes, there has been a growing number of success cases, particularly in the pharmaceutical industry, where such collaborative corporate practices first started. Nevertheless, we have started to see evidence of an increasing maturity within financial services.

Within the Payments domain there are several interesting on-going initiatives which I am involved in. One financial institution is leveraging the FinTech ecosystem to externalise parts of their innovation function, as they work together to integrate the FinTech’s functionality – effectively finishing ‘partbaked’ solutions and deploying solutions faster than an agile development team can.

A second financial institution is working with IBM to build a payment data processing utility which will provide analytical data services in a post GDPR regulatory environment – not only providing a GDPR related service, but also an avenue to monetise data from the data controlling company.

PCM: What are some other candidate areas in Payments that would be suited for co-creation?

Winston: Co-creation is a great way to diversify innovation risk. I believe that using the co-creation approach to tackle some of the Payment industry’s major uncertainties would be ideal. I would love to see more co-creation initiatives address a. Emerging bifurcation of payments between retail and online

payments even as the payment ecosystem becomes more complex. A co-creation partnership between the large merchants, with the ability to influence customers’ payment choices, and financial institutions who own the payment rails could see new hybrid payment products that bridge this divide. b.

Monetisation of payments data. Data streams are more valuable when they are granular (e.g. product level data) and multidimensional (e.g. location data), making data cooperation and partnerships critical to successful monetisation of data. The clarity of data ownership afforded through co-creation will be an additional help. c.

New products and business models arising from the new PSD2 related payment value chain. The arrival of Open Banking APIs and Third Party Payment Service Providers (TPP) is a rich opportunity for incumbents to experiment with co-creating new business models, products and services.

EXPERT INTERVIEW

PCM: What are some upcoming developments that IBM and yourself are working on which would mature this new topic of Co-creation?

Winston: My focus on advancing cocreation has been on two fronts. Firstly, as a member of IBM’s Academy of Technology, with its charter to study and promote technical growth, we have been working with many organisations to identify and define best practices to accelerate the development of cocreation. To date, it has provided us with a solutions classification, an anatomy of the co creation partnerships and lessons learnt about barriers and criteria for success and a risk assessment method.

We are currently working on expanding its work to provide further insights into root cause, architecture implications, governance and assets.

Secondly, there is a growing number of Regulatory and Industry Sandboxes.

An Industry Sandbox is a new concept designed for multiple corporates, startup and established companies alike to come together to test and validate solutions in an off-market environment.

I believe strongly in the role of Industry Sandboxes in advancing co-creation capabilities and have been working with many industry participants and regulators to define and promote its use. In my opinion, these kinds of sandboxes are prime environments for cultivating co-creation – providing all parties with common technology stack, re-usable architecture assets and most importantly, transparency amongst its participants.

I expect to see sandboxes become part and parcel of everyday co-creation.

About IBM IBM is a global cloud platform and cognitive solutions company, which has continually evolved over the past century to remain at the forefront of technological innovation.

Our capabilities in data and analytics, cloud, mobile, social and security have helped the UK evolve to become one of the world’s most digitally advanced nations.

This digital revolution empowers us and our clients to gather and analyse data in ways that have never been possible before—helping UK organisations unlock new insights and usher in a new era of cognitive business.

Winston Yong

Chief Architect at IBM Industry Platform

Winston is an executive architect at IBM with over 20 years of financial services and consulting experience. As a chief architect in IBM’s business unit which specialises in using blockchain, cognitive, and cybersecurity capabilities to establish digital platforms and ecosystems; he provides technical leadership to IBM’s clients to drive innovation in the financial services sector.

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Spotlight You think you have what it takes to start a business in a super-hot market?

PCM takes a close look at some of the most innovative and promising startup companies in the payment industry.

STARTUP SPOTLIGHT

Funderbeam: the world’s first “start-up stock exchange”– built on blockchain

The team at Funderbeam PCM: Tell us about Funderbeam. How did this idea come to be?

Kaidi: The beginning of Funderbeam goes all the way back to 2013, when we started to play with the idea of a trading game.

This was a stock market game for young adults to make all their investment mistakes in a virtual world instead of going to the main markets and losing money.

At the same time, we had been seeing how small and medium size enterprises struggle to fund their growth and how their access to capital was limited, particularly cross-border. So we started to think: what if instead of a game, we create something real?

The first screenshots were drawn, some research was done and then it was clear to the whole team that there would be no game — t here will be a global start-up stock market.

PCM: Why is it called Funderbeam?

Kaidi: Funderbeam consists of 3 words - “Founder” or “Funding” and “Beam”. When we first cre-ated Funderbeam, we help founders and investors find each other, and the “beam” express-es the help in this eternal search.

PCM: Why is Funderbeam needed?

Kaidi: There’s the fundamental problem with investments into private companies. Early stage in-vestors are keen to support startups, but there is basically no liquidity. It demands loads of funds and patience, does not allow crowd (read: startup fans) to join the investments and deals are pretty much local. Besides this data to make investments or follow the invest-ments is pretty much hectic. So Funderbeam has built investing&trading&data service to solve this.

PCM: What makes Funderbeam different?

Kaidi: Funderbeam is the world’s first “start-up stock exchange”–built on blockchain. We allow founders to raise capital more efficiently, from investors all over the world, and most im-portantly, we allow investors to easily trade their investments, meaning that they no longer are forced to make a commitment that ties them down for years and years. (the estimate is around 9 years on average for early stage investments.)

On top of this, we offer the best data intelligence for researching early stage companies, and it’s completely free. This allows investors to research the industries that they are in-vesting into, and benchmark their potential cases to other companies.

PCM:What were some of your biggest challenges for launching this business?

Kaidi: When you are trailblazing through new territory, there are always an abundance of chal-lenges that you have to overcome. When—as in our case—you are creating innovation in the financial sector, one of the main challenges is regulation.

However, in our case, we also see this as our biggest strength: We are working directly with the regulator, and being a regulated platform is what makes us attractive compared to the ICOs that have been the craze of 2017 so far. Kaidi, our CEO, was the head of Nasdaq Tallinn before she founded Funderbeam, and our other Co-founder Urmas has worked as a regulator himself.

PCM: Tell us about your expansion plans and how you go about choosing the next region you expand into?

Kaidi: Our expansion is related to the strong local partner. It may be stock exchange, accelerator, some VC fund or regulator

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STARTUP SPOTLIGHT

itself. So far we have been successful with partnering up strong players and work on the next ones as we speak.

PCM:Any exciting news / announcements you would like to share?

As an example, we launched a partnership with Zagreb Stock Exchange, and we have had amazing results in the region based on thins.

Kaidi: Two things:

PCM: What are the 3 things you want people to know about your company?

Kaidi: At Funderbeam, we like to say, “Imagine if Bloomberg, Angellist and Nasdaq had a baby”. This is what people need to know: We are 3-in-1, combining the three essential parts of fos-tering growth: Data, Access to capital/investment cases, and liquidity.

Kaidi Ruusalepp Founder & CEO at Funderbeam Kaidi is former CEO of Nasdaq Tallinn Stock Exchange and of the Central Securities Depository.

Co-Founder of Estonian Ser vice Industr y Association. Member of Startup Europe Advisory Board at European Commission. A lawyer by training, she co-authored the Estonian Digital Signatures Act of 2000 -- landmark legislation that enables secure digital identities and, in turn, the country’s booming electronic economy. She is founder of the blockchain-based global stock exchange Funderbeam.

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1) We just reached 1000 trades on our secondary market.

With this we have proved to the whole world that there is liquidity in startup market.

2) Next week, we’ll be pitching at The European Parliament for the “European Fintech Awards”. Wish us luck!!

Payment Collective To get a more complete view on the all businesses in the payments ecosystem, in this rubric PCM showcases how merchants deal with payments and fintech challenges.

Bas Winkel Director Performance Management & Financial Operations at bol.com Bas joined bol.com in 2004 to scale up the Logistics department with 50% (from two to three employees.

Up to 2007 he worked on various process improvement projects focusing on more grip on the supply chain and planning of incoming goods. In 2007 he started leading the ‘Financial Operations’ team, responsible for all payment- and order processing and fraud detection. This team has grown to over 50 FTE both Business and IT, still focusing on process stability and reduction/ automation of all waste. The volume has grown to over 50 million transactions in 2016.

Bas also leads the ‘Performance Management’ team, responsible for managing over 16.000 partners that are active at bol.coms marketplace (30 FTE). Monitoring the behavior with automation is key to scalable growth of this business model (with a turnover share of 30% in 2016).

Before bol.com Bas worked at Free Record Shop as a consultant, on various assignments in the Financial department.

PAYMENT COLLECTIVE

Payment Collective - The story of a Merchant with bol.com PCM: As an eCommerce merchant what are the most important factors that influence your selection for a Payments partner?

PCM: Tell us about a dream payment concept that will change how people pay online for products? And do you see this happening in the future?

Bas: We always first focus on customer/ user demand and then think of the best way to meet those needs. The Dutch/Belgian payment method landscape is fairly simple and you only need three payment methods to broadly meet customers demand.

Three things are important here: reach, conversion and cost.

It only makes sense to offer payment methods that are in demand, that have a fast conversion and that are fairly priced.

We only use PSP’s for all card payment methods, because we do not wish to be held back by all compliance rules imposed

by PCI. All other methods are either a direct connect to a bank (iDEAL) or a complete in-house solution (for payment after delivery).What we seek in a partner for payments is an extremely high skillset in automation/ IT for instance to integrate seamlessly on our payment page. This next to off course reliability in the services and good support from both sales and operations teams.

Bas: Payments should not be a barrier from a customer perspective. It is all about trust, convenience and loyalty.

Ideally, a customer does not need to do any payment transaction when shopping. They can pay whenever and wherever they want. It is also not limited to “online”. From a loyalty perspective it would be awesome if customers could also pay at a pickup in a store using their mobile phone that is linked to their bol.com account and payment options.

PCM: What challenges do you face currently when it comes to Payments processing?

Bas: The landscape is changing rapidly in both innovation (startups filling in gaps that large financial institutions left untouched) and regulation. PSD2 is currently a big question mark in terms of what the demands will be on our business (e.g. do we need to change anything to keep doing what we do).

It is not a good sign that in the Netherlands the implementation deadline of January will not be met. It was moved to “spring”, which is a fairly undefined period. Yet again, no certainty for businesses which is harmful.

PCM: If that “dream concept” ever happens and gets implemented in your operations, how will it affect your payment operations? What would be the advantages and disadvantages?

Bas: More convenience means less barriers when paying, means higher fraud risk. We are already excellent at finding en reducing fraud, but in future this needs to evolve to selflearning algorithms that can reduce risk and at the same time widen the convenience for customers.

PCM: Finally, what are a few words of advice you would like to tell professionals who are looking to get into payments and more specifically payments from the merchant end?

Bas: Always focus on the need of your customer (in this case the merchant). Medium to large business have different needs than small to medium size merchants. Better to choose one of these groups to keep that focus. Offer only regional payment methods that have reach, conversion and fair cost. Evolve to a tech company first and payments second.

PCM: How can PSPs help in overcoming these challenges?

Bas: Everybody in the financial domain/ fintech industry should gather and team up or seek connection to influence the policy makers. PSP’s could play a defining role here, but also industry associations could fill that need.

PCM: What is the meaning of the concept “co-creation” to you and how do you see bol.com benefiting from it?

Have you implemented this concept in your line of work yet, how?

Bas: “Co-creation” is finding new ways with (a) partner(s) to meet customer needs and keep within the PCI or regulatory boundaries. An example is a credit card implementation we did with Ingenico a couple of years ago. Together we made a custom integration to make the customer feel at bol.com, whilst all credit card data is stored at Ingenico. Within the PCI limits we made the most customer friendly flow possible at that time. At this moment it is time for a revamp, as technological possibilities have evolved and there are now better ways to achieve a seamless flow for our customers using card payments.

About bol.com Since its launch in 1999, bol.com has been one of the most popular stores in the Netherlands and Belgium. Due to its wide selection, excellent service and convenient shopping, bol.com enjoys the confidence of approximately 6.5 million customers in the Netherlands and Belgium. This appreciation is reflected in the many awards bol.com has won. In March 2016, for example, bol.com was pronounced ‘Best Web Store in the Netherlands’. In addition, shoppers voted bol.com ‘Best Online Department Store in the Netherlands’ and ‘Best Web Store in Belgium’ in both 2015 and 2016. With a selection of nearly 15 million products, all of these customers keep finding what they’re looking for. Bol.com offers the largest selection within dozens of specialty stores, including books and e-books in Dutch and other languages, music, movies, games, electronics, toys, jewelry, watches, baby products, gardening and DIY products, as well as everything for the home, pets, sports, leisure and personal care. Bol.com is part of Ahold Delhaize.

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WORKSHOPS

Payment Services Directive 2 (PSD2) Pending Challenges and Hidden Opportunities

Payments & Cards Network’s Group PSD2 workshop is designed to dive deeper into the business and opportunities side of PSD2 and give attendees an understanding of how PSD2 will affect their business and what they can do.

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Andrew Mullineux Business Leader Contracts - Payments | FinTech andrew@teampcn.com +31 20 3030 257

Executive Profiles In this rubric we are introducing inspiring professionals of the financial technology industry and look into their careers and ambitions. This is a collaboration in partnership with Atlanta Trend.

EXECUTIVE PROFILES

Elavon’s Jamie Walker

by Robert Green

Elavon CEO Jamie Walker attributes much of his success to the wonderful upbringing he obtained from his parents. “My mother taught discipline and my father taught me how to problem solve,” he says. “Best of all, I was allowed to make mistakes and learn from them in a stable environment.”

Jamie Walker was born and grew up in Philadelphia, Pennsylvania, attending Chestnut Hill Academy preparatory school from kindergarten through 12th grade. “I was a big math guy in school and I loved physics,” he says, “so I’ve always been more of a fact based person.” Walker’s father was an executive with PNC Bank where he ran its ATM business and his mother worked as an event planner. In his school years, he played ice hockey and baseball.

Because he wanted a change in location after high school, Walker looked at two colleges in the south – Washington & Lee and Emory. “Frankly, Washington & Lee’s cafeteria looked exactly like the one in my high school and that made my 18-year-old brain think that it wouldn’t be enough of a change for me,” he says, “plus I knew that I would be playing baseball at Emory.” Moving to Atlanta, he majored in Accounting and Marketing. Upon graduation, he went into public accounting with Ernst & Young in 1999.

“I got great training at EY,” says Walker. “I learned how to navigate through an organization, how to manage my own time and how to pay constant attention to details.” His first client with EY was a payment processor based in Atlanta called Nova Information Systems. “I wasn’t exclusive on Nova, but I probably gave them 60% of my time,” he says. In May of 2001, Walker got an unexpected offer from the CFO of Nova to join his team as a permanent employee. “It was an exciting offer because Nova was growing so fast, but I needed to take time to decide whether or not to leave a career in public accounting,” he said. “I decided to take the offer, but before joining Nova was acquired by U.S. Bank.

Walker immediately went into the Financial Operations Group where he had eight people working for him. The first major job had to do with the purchase of Nova by U.S. Bank.

“I volunteered to spend time at U.S. Bank headquarters in Minneapolis working on the integration of finance. The year I spent going up there was very helpful in my getting to know the company and people,” he says.

By 2002, he had taken over the entire Financial Operations Group and had 60 people working for him. “We were growing rapidly in Europe,” he says. “In 2003 we did three large acquisitions in the UK, Poland and Norway. This doubled the

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size of the company in Europe and I spent 75% of my time over the next 18 months in Europe.”

By this time, Walker had become the Senior Vice President of the Financial Operations Group and was setting up a Global Financial Operations Group so that he could consolidate finances from all countries under one shared service. In 2005, the company bought Citibank’s European card portfolio, which was quite large. “I was spending even more time than ever in Europe,” he says.

“We were extremely busy during this time period and I have to say I learned a lot from my direct boss, CFO Steve Stevenson,” Walker says. “He was very honest and transparent. He taught me how to make tough decisions. I also learned that you have to have the right people working for you. It’s impossible to do everything yourself.”

In 2008, when Stevenson left Elavon, Walker became CFO. Walker had developed a great relationship with then CEO Stuart Harvey because they had worked together on numerous acquisitions. “He coached me a lot and helped me to grow,” he says.

It goes without saying that the major event of his early years as CFO of Elavon were taken up by the financial crisis. “I think we managed it pretty well,” says Walker. “U.S. Bank didn’t have a single losing quarter, nor did we have to do any

EXECUTIVE PROFILES

layoffs. Everyone at U.S. Bank took a 5% pay cut, but I think that actually helped us preserve our culture. We’ve always been an ‘all in this together’ kind of workplace,” he says. Elavon did make moves during this time, however, venturing into Spain and Latin America and also starting their own global gateway or e-business.

In late 2015, Walker was selected to become the Chief Administrative Officer for Payments at U.S. Bank. “That move really took me out of Elavon operations,” he says. “Instead, my job was to look at strategy for the next three years in payments and figure out the opportunities to grow. I got to step back and look at things from a high level. Essentially, I was taking an analyst’s view of the company,” he says.

Although he knew that he wanted to become a CEO one day, he didn’t expect the chance to come so soon. Elavon CEO Simon Haslam decided to leave the company at the end of 2016 and the opportunity presented itself. After doing an executive search, U.S. Bank selected Walker to become the CEO of Elavon in February of this year.

As CEO of the company, Walker is especially proud to recite some of the company’s main accomplishments. “Elavon is the fifth largest merchant acquirer in the US and the sixth largest in Europe. We have a vast distribution network through many large banks and other distributors. Most of all, we have one single platform which allows greater profitability for our shareholders,” he says. Elavon is also much further ahead of their competitors on the EMV conversion.

In the future, Walker expects that the company will focus more on ecommerce and card-not-present transactions. They will invest more in new innovation via their internal “start-up,” known as the “Grove” and will probably be more acquisitive.

Elavon has a low percentage of big box retailers,” and that has become a blessing at this point,” he says. “These retailers are

struggling and so are the owners of the real estate beneath them.”

The company’s main vertical concentrations are airlines, hospitality and healthcare. They are number one in airlines and number five in healthcare. “I’m sure that we benefit from the fact that the transactions we tend to focus on are not easy transactions,” he says. “There tends to be a higher barrier to entry in these verticals.” Things are going well for the company.

For all his success, Walker makes it a point to give credit to the executives who came before him and set an example that he tries to follow today.

“Shailesh Kotwal our vice chairman of payments has pushed my focus and drive towards building a unique value proposition for our customers through our combined strengths. Also his ability to ask the tough questions and hold me accountable has prepared me for the role,” Walker says.

“Pam Joseph was CEO and Chairman of Elavon and also Vice Chairman of U.S. Bank and working for her was great. Pam was extremely loyal to her people – she took care of you. She expected a lot,” he says, “you didn’t want to ever be unprepared – but she took care of you and pushed you at the same time.”

“Mike Passilla was CEO of Elavon in recent years and he was such a decent, wonderful guy, very genuine. I learned a lot about sales from Mike, among other things,” he says.

At 41, Walker is probably the youngest CEO of a major payment processor in the U.S., but he feels certain that his age is irrelevant. “I’ve been in this business nearly two decades,” he says, “and I’m very confident about the future.”

Walker has now lived in Atlanta since college and loves it here. He is married and has two boys who attend Woodward Academy.

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HOT JOBS

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Amsterdam, Netherlands

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These are the latest job opportunities we have available!

For more information please visit www.teampcn.com/jobs or check out our international Job Board at www.payment.jobs 25

EVENTS

Events Barcelona, Spain The Exchange Summit is the leading event dedicated to E-Invoicing and bringing together experienced practitioners and innovative strategists to provide an in-depth learning and networking experience.

Meet and network with experts, thought leaders and professionals in E-Invoicing, Purchase to Pay, E-Procurement, Supply Chain Finance, AR/AP.

9-10

150

Discount Code: PayCN

9-11

Copenhagen, Denmark

Shoptalk Europe is the only large pan-European event for innovation in retail and ecommerce, and covers the evolution of how consumers discover, shop and buy. They fill a major industry gap by bringing together over 2,000 innovators, including 250+ world-class speakers, from all of Europe, all ecosystem stakeholders and all industry verticals.

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Discount Code: GMPCN

London, United Kingdom The Global Money Transfer Summit, the most recognised conference in the remittance industry and the major industry event will gather money transfer professionals from across the globe to discuss the challenges facing the industry head on. This is the remittance industry’s chance to not only hear from our influential speakers, but also network with their fellow industry peers.

Discount Code: PCN250

Las Vegas, United States

12-14 22-25

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Money20/20 US is the world’s most important event covering payments and financial services innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology. With 11,000+ attendees from 4,500 Companies and 85 Countries, including 1,700+ CEOs and 400+ speakers, expected at our 2017 US event, Money20/20 is critical to realizing the vision of disruptive ways in which consumers and businesses manage, spend and borrow money.

12-14 10-11

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