PCM Volume 3 - Issue 7: New Payments Landscape by PCN Magazine

Vol 3. Issue 7 | July 2017

YOUR GATEWAY TO THE WORLD OF PAYMENTS

NEW PAYMENTS LANDSCAPE At the crossroad of transformation

MAXIMIZE YOUR DATA VALUE

THE LEADING SOURCE FOR DATA SCIENTISTS IN PAYMENTS

Contents STORIES

Amir Abdin Founder & Editor-in-Chief

The rise of a new FinTech hub & talent magnet in the South of the U.S.

To go big in Latin America, you better understand local payment methods

Omni-channel or Multi-channel Payments in a Cross-Border POS Environment?

Repainting the payments landscape with Don Ginsel

Start-up Spotlight: Countr

Unlocking potential in high-growth markets

amir@teampcn.com https://nl.linkedin.com/in/amir-abdin-21365683

Duc Dang Production Editor & Head of Creative

Hot Jobs

Industry Events Calendar

duc@teampcn.com https://nl.linkedin.com/in/ducdanghh

THANKS TO OUR PARTNERS PCM is designed by Duc Dang, Payments & Cards Network. Art and photos © Payments & Cards Network, picjumbo.com, Flickr.com and Shutterstock.com, excluding advertisments and company logos. PCM™ is property of Payments & Cards Network, Herengracht 576, 2nd Fl., 1017 CJ, Amsterdam, The Netherlands. All material contained within PCM is the property of Payments & Cards Network. All other product and service names may be trademarks of their respective companies. ©2017 Payments & Cards Network. All rights reserved. Reproduction of any kind is strictly prohibited without express prior written consent of Payments & Cards Network. ADVERTISING INFORMATION For details, please contact amir@teampcn.com

Thought Leaders Corner

The rise of a new FinTech hub & talent magnet in the South of the U.S. by Grant Wainscott & Barry McCarthy

tlanta has historically been recognized for its transportation systems. Centuries ago, the city was known for its railroads, and that legacy continues today with the city serving as home to the busiest airport in the world. However, what people do not always immediately realize about Atlanta is that it has quietly become a global FinTech capital. There are more FinTech companies in Atlanta than anywhere else around the globe. Collectively, these organizations power 70% of all U.S. credit, debit, and gift card transactions, securely handling tens of trillions of dollars each year on behalf of consumers and global businesses. In addition to First Data, Equifax, NCR, Global Payments, and others, there are more than 100 FinTech companies with major presence in the state, and companies in the state earn the third most annual revenue only behind New York and California. The presence of FinTech companies has been a point of emphasis for both the public and private sectors in the metro area. In collaboration with the Metro Atlanta Chamber of Commerce, the American Transaction Processors Coalition, and the Technology Association of Georgia, FinTech Atlanta was created to recruit, retain, and promote jobs and businesses across the FinTech industry. Four Georgia schools were ranked top universities by U.S. News & World Reports in 2016: Emory, Georgia Tech, Mercer, and

University of Georgia. Additionally, five Georgia schools ranked among the best Historically Black Colleges and Universities with Morehouse College, Clark Atlanta University, Fort Valley State, and Savannah State University all making the list. Terrific talent is being developed in the state, and FinTech companies provide incredible opportunities to graduates. This also means that companies with presence in the area can foster relationships with top institutions to provide training curriculums and work alongside universities to prepare students with educational resources and skills relevant to the working world. As payments and financial technology are embedded into every company, the reach of the group extends beyond core payments providers. Exchanging funds for goods and services, commerce, is the foundation of the global economy. Every single business must accept and make payments, which is why FinTech Atlanta extends to also include Coca-Cola, Delta, The Home Depot, Bain & Co., among others. There is an abundance of opportunity for companies based in Georgia. Employees living here benefit from a moderate cost of living, access to good public schools, good year-round weather, more trees than any other U.S. city, close proximity to a global airport, renowned museums, and great sports teams. Additionally, in 2016, Georgia was ranked as the number one state to do business in for the fourth consecutive year by Site Selection magazine.

Thought Leaders Corner Barry McCarthy

EVP, Head of Network and Security Solutions at First Data Barry McCarthy serves as EVP, Head of Network and Security Solutions (NSS) at First Data. The $1.6 billion NSS segment includes all of the firm’s network, debit, prepaid, ACH/check, fraud, security, secure digital distribution, online and mobile banking, and government solutions. Barry is also the Chairman of FinTech Atlanta.

Metro Atlanta is a world-class hub for technology design, implementation, and innovation. Powered by the strength of more than 13,000 technology companies, the region is lauded for its strengths in Smart Cities/IoT, cybersecurity, FinTech, digital media, and a thriving mobility ecosystem. Metro Atlanta has created a robust talent pipeline unmatched in the region, leading to a dramatic increase in university and privately-funded accelerators and corporate innovation centers as companies seek to leverage top-notch students and faculty talent. As one of the fastest-growing, high-tech urban centers in the nation, leading the way in creating a national center for innovation and industry growth, metro Atlanta is a world-class hub for technology design, implementation, and innovation. In fact, Atlanta was recently named by CBRE as one of the top 10 tech talent markets in the nation. One of Georgia’s most important and fastest-growing industries is financial technology, or FinTech. On par with London, New York, Zurich and Singapore, metro Atlanta is quickly becoming a global center for money, markets and transactions. Our one-of-a-kind ecosystem includes global giants like First Data, Equifax, NCR, Worldpay, FIS, ICE, Sage and Global Payments, as well as today’s disrupters and entrepreneurs like Kabbage, Paymetric, Greensky, ControlScan, GroundFloor, and Cardlytics.

About First Data First Data (NYSE: FDC) is a global leader in commerceenabling technology and solutions, serving approximately six million business locations and 4,000 financial institutions in more than 100 countries around the world. The company’s 24,000 ownerassociates are dedicated to helping companies, from start-ups to the world’s largest corporations, conduct commerce every day by securing and processing more than 2,800 transactions per second and $2.2 trillion per year.

FinTech in Georgia drives more than $30 billion in annual revenues, employs more than 40,000 people, and processed $5 trillion in transactions in 2015 alone. From Atlanta’s early days clearing check payments through the Federal Reserve, to the cutting-edge work being fostered at Georgia Tech’s Worldpay FinTech Accelerator program at the Advanced Technology Development Center, metro Atlanta and Georgia have consistently taken the lead in the development of new and innovative financial services.

Thought Leaders Corner Grant Wainscott

Senior Director, Technology Ecosystem Expansion at Metro Atlanta Chamber Grant Wainscott is the Senior Director of Technology Ecosystem Expansion for the Metro Atlanta Chamber and is charged with growing and promoting Atlantaâ&#x20AC;&#x2122;s FinTech & Cyber ecosystems around the world. He has deep experience in international trade and technology, and has lived and worked extensively in the US and abroad.

Helping to feed the demand for this ready workforce are 29 higher education institutions including four research universities, two of which rank among the top 25 national public colleges and universities. Rounding out the robust ecosystem are important efforts like the Technology Association of Georgia, American Transaction Processors Coalition and the FinTech Atlanta Task Force, as well as dozens of FinTech and related conferences, trade shows and meetups.

In addition to providing comprehensive site selection consultation, MAC Global Commerce assists FOEs with their due diligence and connects them to the resources needed to avoid the missteps that some companies make entering the U.S.

The Metro Atlanta Chamber (MAC) plays an important role in helping connect the numerous economic development partners like utility providers and state/local governments, with the ecosystem and industry leaders. From startups to our Fortune 500 community, our team understands global trade and our markets. In particular, with collective decades of international expertise, the Global Commerce team at MAC is in place specifically to help foreign-owned enterprises (FOEs) navigate the path for entry and expansion in the U.S. market.

Metro Atlanta

Fintech Atlanta

The Metro Atlanta Chamber is dedicated to leading our region to a more prosperous and vibrant future. Our focus is advancing economic growth, enhancing our business climate and improving the quality of life for each and every person who calls Atlanta home.

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 groupâ&#x20AC;&#x2122;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.

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Thought Leaders Corner

To go big in Latin America, you better understand local payment methods by Andre Allain

or businesses looking to expand globally, Latin America must be a target market. The region is growing, society is ascending in economic power, and therefore avid to consume. Besides being the biggest country in Latin America, Brazil also dominates the cross-border market, followed by Mexico. Another country who is getting a lot of attention lately, Chile is receiving investments from China and within the next months will gain a branch of Bank of China, one of the four largest banks of the Asian Country, according to the Chilean newspaper La Tercera.

An expanding middle class with an increasingly sophisticated taste Today Latin America is home to 600 million people. Almost one-third of it is formed by the middle class, people with an income of 4 to 50 dollars a day. This group has doubled in size during the last decade, according to a study released in 2016 by the Inter-American Development Bank about the social conditions in Latin America and the Caribbean. This new middle class is an avid user of the internet, its consumption needs keep increasing in sophistication and remain unsatisfied by the local supply of goods and services, hence, turning to a more diverse global supply of goods and services via e-commerce. But these almost 200 million Latin Americans are not being served well enough when it comes to e-commerce. They want

to buy from abroad but face the reality of a lack of payment options. The consumer has the eager and the money to buy, but can’t complete the purchase simply because the merchant does not accept the payment method that he or she is used to working with. Just like any other market, Latin America has its own specificities. The local payment methods are one of them. In order to have a successful entering and good penetration in the region, it is necessary to offer these local methods. You can’t access the whole Latin American market with just international acquirers.

But what are these local payment methods? Credit cards are still the preferred payment method in Latin America. However, global merchants should expect a low credit card approval rate in Latin American countries in general. Let’s take a look at some data from Brazil and Mexico, the first and second largest region’s e-commerce markets. In Brazil, this rate is between 30% and 50%. The main cause of this low approval rate is the fact that internationally accepted credit cards (that can process in foreign currency) represent only 19% of the country’s digital payments market. It means that 81% of these Brazilian consumers cannot buy from global merchants if these merchants do not offer local payment methods. Local payment methods are local credit

Thought Leaders Corner Andre Allain

Head of Enterprise Sales at EBANX Andre is the head of Enterprise Sales at EBANX, leading the team through the expansion of EBANX current enterprise merchant base to Latin America and to add new enterprise merchants, helping businesses to overcome local barriers and reach the full potential of consumption in the region. He holds a Master of Business Administration from the University of Melbourne and has been working on the e-commerce and payments market for the last 10 years.

cards (that only process BRL) such as Elo, Hipercard, local Visa, and local MasterCard, debit cards, bank transfer, and cash payments. A very well-known and familiar Brazilian cash payment method is the Boleto Bancário, or boleto for short. Millions of Brazilians are used to pay utility bills like water, electricity, rent, among others, with it. They are used to it and more important, they trust in it. One of the main reasons Brazilians prefer to pay using Boleto Bancário is the transparency of it. All the information needed is in one document, which includes the exact amount the customer will have to pay and by when, the barcode, corresponding serial number (that allows to pay it by using internet banking), issuing bank code, customer information, and description. The capillarity is another reason since the boleto can be paid in more than 64K different locations around the country such as supermarkets, lottery stores, and banks. Another common payment method in Brazil is bank transfer, or Electronic Funds Transfer. This method allows the consumer to pay by using its own online bank account, by being redirected to its bank website. In Mexico, for each credit card, there are 5 debit cards. OXXO, a cash payment alternative holds a 30% Mexican market share of online shopping. It is powered by the OXXO convenience stores chain. Like the Boleto Bancário in Brazil, OXXO is an extremely popular cash payment method in which Mexicans trust. They are used to it and can pay it in any one of the 14K OXXO convenience stores around the country.

Besides Brazil and Mexico, e-commerce in Colombia is booming in the last three years (growth of 50% since 2013 to 2016, according to American Market Intelligence), Colombians are increasingly buying from online stores and also looking for products and services provided by global merchants. As the numbers show, Latin American nations are growing fast as well as embracing the internet, social media, and e-commerce with open arms. But it is still a market that has very specific characteristics and needs. It is important for global merchants to trust and use partners that have: proven track record of success, understand the local culture, what does and doesn’t work and knows the behavior of local consumers. Latin America is a market to be unlocked.

EBANX EBANX is a Brazilian Fintech that offers Latin American local payment methods to global businesses. The company provides solutions for merchants such as AliExpress, Airbnb, Spotify, Wish, and Udacity. EBANX is changing the way consumers in Brazil, Mexico, Colombia, Chile, and Peru pay on international websites and has already enabled more than 21 million people in these countries to access global products and services, as well as enabling global e-commerces to reach new audiences.

Along these, there are the interest-free installments, or Meses Sin Intereses, a widely popular method in the country. A study released by AMIPCI (the Mexican Internet Association) indicates that 6 out of 10 e-commerce buyers would prefer to make an online purchase that offers interest-free installments, over a discount or free shipping.

On a journey towards Straight-Through-Processing and Zero-Touch P2P 11th Pan-European Conference in the P2P Series

P2P and Robotic Process Automation Strategy Workshop Moving to the next level of maturity 12th – 14th September 2017 — Amsterdam, The Netherlands

Attending this Premier marcus evans Conference will Enable You to • Benchmark experience on the journey towards Straight Through Processing and Zero-Touch P2P • Hear success stories on purchasing Master Data Management projects • Increase the Efficiency in SSC and improve the PO Compliance Rate • Get the Most out of Process Mining and Analytics

Expert Speaker Panel Includes Henk Grol Global Manager P2P Liberty Global B.V. Lars J Andersson Head of Procurement Automation and Analytics A.P. Moller - Maersk Group Milena Galanciak-Nakouri P2P Systems Nordea Linde Penn-Dijkgraaf Global Process Owner PtP Express DP DHL

Learn from Key Practical Case Studies • Maersk is transforming procurement and supply chain roles with robotics • From P2P to S2P to M2P: Master Data Management journey at Liberty Global • Invoice Management Journey: from Integrated to Cloud Solutions at HEINEKEN • Integrated Purchase to Pay process in Indirect Purchasing at Bosch • UPM sharing analytics and process mining approach and the journey/strive towards world-class P2P

Lars Bulow Manager, Global Accounts Payable Financial Global Shared Services Cisco

Business Development Opportunities Does your company have services, solutions or technologies that the conference delegates would benefit from knowing about? If so, you can find out more about the exhibiting, networking and branding opportunities available by contacting: Yiota Andreou, Digital Marketing & PR Executive, marcus evans Cyprus Tel: +357 22 849 404, E-Mail: YiotaA@marcusevanscy.com

conferences

Thought Leaders Corner

Omni-channel or Multi-channel Payments in a Cross-Border POS Environment? by Marcio Stervid

ollowing the introduction of many new and alternative payment channels one can definitely say that consumers find themselves in an increasingly complex payment world.

From the traditional physical brick and mortar store experience or catalogue sales where an order was placed by mail or via telephone, to online shopping, which now can start on our laptops/computers, move to our smart phones and/or tablets and finally conclude in store with the collection of the good (click and collect).

in most countries operate as barriers to external operators. European merchants are required to adopt POS solutions that comply with the specific regulations of each country in which they operate. That means, having to certify local acceptance with in-country acquirers for transaction routing. Achieving and maintaining compliance is a complex, time consuming process, requiring multiple POS terminal management solutions, different conditions with local acquirers, heavy accounting management and non-homogeneous consumer shopping experience in every country, which usually results in high costs.

A variety of choices are also available in respect to the payment itself, depending on the channel, the consumer can either pay physically (card-present) or digitally (card-notpresent). Today Chip and PIN cards, smart phones and many other innovative payment devices allow us to pay through different methods of contact, contactless and online payment channels.

As modern consumers living in a global market, we expect to be able to get easy access to refunds in any country regardless of where the product was originally purchased. We also expect our loyalty scheme reward points to be accepted globally. Unfortunately, these consumer needs are not always available as a standardized process due to specific country payment regulations and outdated back office legacy systems.

With the introduction of new and smart payment media, consumers now have the ability to receive information regarding special and spot promotions. These are pushed by merchants depending on the customerâ&#x20AC;&#x2122;s location or based on a specific shopping pattern behaviour. This allows for tailormade offers, specifically targeting particular individuals.

Unfortunately, in most cases, the variety of smart shopping payment options offered by retailers do not fully satisfy the demands of the international consumer. Refunds, as previously mentioned, are a prime example of this. The customer expects the process to be smooth and timely, even if the product is being returned in a country different to the one in which the purchase originated.

High Complexity and Costs in A Fragmented Payment Market The European card payment market is still highly fragmented in terms of standards and business models. National schemes

There is still a significant level of confusion within the retail community. Companies are attempting to make this Omnichannel and Multichannel payment solution concept a reality. The goal is a marketplace (online and physical) where

Thought Leaders Corner Marcio Stervid Head of EMEA Market Development at AltaPay Marcioâ&#x20AC;&#x2122;s professional experience spans for over 27 years working for organisations within different business environments with focus on: Financial Services, Information Technology & Services and Banking. For the last 17+ years. Marcio has been closely involved with the payment industry covering different aspects of the business ecosystem such as issuing, POS, acquiring, services and advanced solutions. Marcio holds an MBA from Manchester Business School in the UK, as well as two degrees from high calibre universities in Brazil. Prior to joining AltaPay, Marcio has worked

for VeriFone and also for Gemalto.

consumers have complete freedom of movement, this can only be achieved by a fully connected payment infrastructure.

Omni or Multi Channel Payments? One of the fundamental differences between Omni and Multichannel payments resides in the level of integration within the payment ecosystem. Multi-channel is usually based on a non-integrated system of serving consumers, while Omnichannel requires a complete 360-degree integration of systems. In a true Omni-channel environment the boundaries and challenges inherent in payment channels tend to disappear. This enables the consumer to benefit from a completely unified payment experience. The Omni-channel concept not only extends the range of different payment channels available to customers, it also unifies the needs of consumer and retailer and improves communication and interaction between both parties. What has the payment industry done to support merchants with an Omni-channel approach? In the coming months, the payments industry will be heavily influenced by a number of important development. These changes intend to address fragmentation, overcome current barriers and harmonise rules of acceptance. Examples include: a. PSD2 is allowing Third Party Providers (TPPs) to play a more important role in the payment ecosystem b. The PCI Council is certifying Point-to-Point Encryption (P2PE) solutions to limit the scope of merchant PCI certifications c. Tokenisation provides the additional security necessary to protect cardholder data in relevant end-customerâ&#x20AC;&#x2122;s purchasing scenarios.

Omni Channel Payment Solution for The Demanding Consumer Although these new regulatory changes are kicking down barriers, there is still a very limited number of PSPs which can claim to be able to offer a single card-present and cardnot-present solution available throughout Europe. Legacy systems, security and compliance to local regulations are the biggest obstacles merchants face when attempting to offer a comprehensive Omni-channel cross border payment solution. The recent integration of AltaPay and IPS Ltd, both subsidiaries of Valitor hf, (soon to be fully rebranded as AltaPay) and the combination of our two well established platforms has created a true Pan European Omni Channel Payment Solution. Merchants can benefit from a card-not-present and card-present solution which is currently live in 18 European countries allowing multiple acquirers connections through the same payment gateway. With our solution, international merchants across multiple verticals including retail, can benefit from a variety of

Thought Leaders Corner payment acceptance services, delivered from a centralised service model and supported by a customer centric care team. The AltaPay PCI P2PE (Point to Point Encryption) certified solution enables PCI DSS compliance while maintaining the level of solution flexibility, different payment options, as well as other associated services, which today’s consumers expect The integration of our two state of the art platforms (card-notpresent and card-present) allows us to use a unique token and database to exchange data between different sales channels, providing a complete track record of the consumer purchase history to merchants, regardless of which channel or in which country the transaction takes place. AltaPay solution enables merchants to accept any alternative payment methods from any channel, from any country, whilst payment is tokenised with the transaction, allowing consumer data to be combined across different channels to better understand customers’ buying behaviour and to enhance the overall consumer payment experience. The reporting capabilities allow automatic reconciliation through one single comprehensive report, independently to which channel or location the purchase happens. One aspect that makes the payment industry very exciting is the pace in which new changes are constantly introduced. Hopefully such changes will continue to improve the customer payment experience on the whole. Today’s channel agnostic consumers have increasingly high expectations, jumping seamlessly between web, mobile and in-store, they expect interactions to be contextual, consistent and most importantly, relevant to them. If you would like to know more about AltaPay Omni-channel payment solution, please feel free to contact sales@altapay.com

AltaPay AltaPay provides a single connection for payments across e-commerce, in-store and mobile to global businesses. Our payment solution is fully tokenized for customer identification. This enables personalized experiences, click and collect, and return to store processes to increase customer satisfaction. AltaPay’s clients include BooHoo.com, Fat Face, Sports Direct, Laura Ashley and ECCO. For more information, contact us at sales@altapay.com

expert interview

Repainting the payments landscape with Don Ginsel Don Ginsel is trained as Civil Engineer and a former banker at ABN AMRO and Deutsche Bank, after which he become an entrepreneur and investor in early stage startups. He has been active as a mentor and coach for startups through several accelerators and incubators. He is a thought leader on Fintech and the digital evolution, and the founder and CEO of Holland FinTech. by Don Ginsel

intech has created an environment that gives space to new and innovative solutions for the whole financial services landscape. Developments are changing the way we use, move and make money. Furthermore, with customer expectations on the rise, financial institutions are forced to keep up to date with the latest trends in technology. It is necessary for financial services providers, from big banks to small sartups, to have a way to share knowledge, find each other and develop new ideas in order to keep up with the pace of the world is changing.

PCM: How did the payments landscape change in the past 10 years? Don: Even though various regions deal with change at different speeds, the changes in the payments landscape during the past 10 years have been quite significant. The main obvious trend perhaps, is a transition from cash to cards, and then to digital. Ten years ago, the vast majority of people were predominantly paying with cash, e-commerce was still in its early days and digital payments were also very limited. But, as time went by, we saw that cards replaced cash, enabling digital apps and other solutions to be attached to the payment data flow. Now, we see that cards are slowly being replaced by online payments, whereby the contextual payment data becomes even richer.

With that in mind, it’s important to say that cards are still very dominant, even in the digital payments landscape. However, we are starting to see more developments and solutions that allow buyers to use digital wallets or have digital access to their bank account and move money digitally without the necessity of having any type of card. Regulatory changes also need to be mentioned, as there have been regulatory efforts to change the payments landscape in Europe. The introduction of the Single Euro Payments Area (SEPA) before, and now, PSD2, are very strong European initiatives to open up the market and develop new payments solutions that will improve the experience of consumers across the continent.

PCM: What are the current trends and developments in the payments and Fintech industry? Don: Currently everyone is all over PSD2, open banking and instant payments. Mayor players across the whole industry are keen to follow and influence these developments; as they will change the way money is used and the role that different financial institutions will play in the future. For example the discussion about screen scraping (which should actually be about credential sharing) is an interesting example.

PCM: How will these trends and developments affect the landscape as we know it now? Don: Even though there are still a lot of questions and uncertainty about how is it going to be implemented, PSD2 is definitely going to have a big impact. It becomes more transparent who is a customer “advisor” and who is just providing product as part of that. Traditional banks will be increasingly seen as a payment backbone platform rather than a financial services provider, which means that the roles of some institutions will change far from where they want to be—customer facing. This also leads to challenges for regulators and customers, who need to adjust their understanding of who they are dealing with. Nevertheless, it is very likely that we will see a slow process of implementation and a long transition period; this can facilitate things and give confidence to all players across the financial sector. The principle of open banking and API’s represents a big opportunity for innovation and change. The possibilities that it unlocks can add a lot of value to the payments sector by allowing new talent to add solutions to the data that established financial

expert interview institutions already have. Nonetheless, these developments also involve new risks; and regulators across functions need to work together to minimize them. We should altogether stop looking at the financial industry stand alone, as increasingly industry or sector definitions will not fully cover all types of companies, and various types of parties that will be involved in financial services. Therefore, we need to look at the full digital ecosystem and create a level playing field regardless of whether you are in the financial services or in other digital services. The game should be increasingly the same for everyone; to allow all players with value, whether financial or not, to provide the best services to their clients.

PCM: What things will we see fade away and what things will we see rise in the next 5 years? Don: We will see less cash and fewer cards. Bank branches will continue to disappear, opening the door for new hybrid models where financial services are combined with other (retail) services. Regarding online payments, we will see an increasingly seamless checkout procedure for the customer. Furthermore, we will see many value added services for merchants, reducing fraud and credit risks. The value chain will be ever more fragmented and crowded, not only within financial services, but also throughout the full digital ecosystem. P2P payment solutions will finally take off and become common, just like integrated solutions for corporates will pop up increasingly.

PCM: What kind of (fin, insur, reg, etc.) techs exist now and what will we see more of in the future, based on peoples/businesses needs? Don: This year is definitely the year of

Regtech and security. Given the current geopolitical situation, the role of security is becoming more crucial. Besides that, the burden of being compliant has become so heavy that companies are keen on technology solutions that can help them be compliant, hence RegTech. As both solutions deal with similar processes with organisations, and that security is a strong part of regulations, both go well hand in hand. In any case, this is short term. We need to keep in mind that in the long run all the industries (financial, security, regulation, insurance, etc.) will go through significant changes driven by technology, regulations and changing customer behaviour. Itâ&#x20AC;&#x2122;s hard to predict which one will be the most eye-catching. The key lies in being aware that, sooner or latter, change will happen in any industry, and that even when change goes slow, adaption usually goes slower. So better start preparing for the future now!

PCM: Social Media is one of the biggest hypes nowadays, how will this affect the landscape in terms of consumer payments? Don: Social media is a very large gathering of various online interactions that will all have their own dynamics. Google is not Facebook nor Twitter nor Amazon. However, as many of these organisations survive on advertising, they have a keen eye for payment data and control over the user experience in the full digital realm. But not all have the same strategy and capacity to play this role, especially without having to transform (part of) their business into a regulated entity. What will happen,, is that financial services experience will get closer to the customer, very likely through social

media, as they have the best insights to create a desirable customer experience. In the end, the question is: who has the power in the value chain? As mentioned earlier in the interview, we need to stop looking at the financial industry as stand alone, we need to move to an integral view on the digital services ecosystem, as value is being transferred far beyond just monetary. Besides that, as newcomers -like social media platforms- move into the financial services experience of consumers or businesses, is important to ensure a level playing field. Otherwise it will be hard to secure a trustworthy (financial) services ecosystem, with impact worldwide.

PCM: How is Holland FinTech helping in shaping the future of the landscape? Holland FinTech is making everyone aware of all the solutions that are out there supplied by all parties across the financial value chain. By empowering people to have the understanding of the available solutions and market dynamics, companies can, find potential solutions and costumers, and therefore strengthen their businesses for the future. For all actors in the financial value chain together, this helps to shape a healthy ecosystem that is ready for the challenges the future brings.

Holland Fintech Holland Fintech is founded in 2014 in Amsterdam as an open platform & network for Fintech knowledge & business. Holland FinTech aims to bring together the full width of financial solutions in one place, and provides services to support their understanding of market developments and do business in the ever faster developing market. Its over 325 member companies range from large institutions such as banks and insurance companies, to small companies like investors and start-ups. The membership is open for all players in the ecosystem with an interest in Fintech and financial innovation.

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

“AN IN-STORE POS IS JUST A GLORIFIED CALCULATOR” John Staunton, Co-Founder & CEO of Countr POS

point of sale of sale (POS) system is a combination of software and hardware that allows merchants to take transactions and simplify their day-to-day business operations. Besides offering flexibility when processing daily transactions, modern POS systems improve a merchant’s marketing by providing them with tools to centralise business processes. Managing inventory and employees from anywhere with data stored in the cloud allows merchants to easily run their business. The reporting system help businesses understand about their profits and losses, and make better decisions in order to better reach customers. To get a better insight into this area of payments we interviewed John Stauton, Co-Founder & CEO of Countr POS.

PCM: Tell us about Countr. How did this idea come to be?

PCM: Why is it called Countr? John: It’s called Countr for a number of reasons – the shop counter is where customers are served and where the business operations come together, plus our platform is a counter of sales and transactions.

PCM: Why is Countr needed? John: As mentioned before, there is a huge need for reliable, flexible, affordable software. Retailers of every size deserve access to cutting-edge analytics and all of the latest payment methods (from cryptocurrencies to mobile payments to PIN), loyalty services, automated accounting, etc.

PCM: What makes Countr different? John: We originally started as a provider of loyalty services but quickly found that integrating with existing POS is very difficult, time-consuming and costly. Further, retailers were looking for extendible solutions that were future-proofed and ready for the latest advancements in payments, loyalty, e-accounting, etc. We saw that existing solutions available on the market were ludicrously overpriced (€3k-4k for hardware alone, with a huge monthly fee and excessive extra fees for even the tiniest add-on or minor change). Given all of this, we decided to build a next-generation POS from the ground up, with the goal of making it accessible for all, easy to extend, and able to use existing (relatively low-cost) hardware available everywhere today.

John: We are the most flexible POS available, we work on any Android or iOS tablet and shortly will be available on any hardware currently being used in shops and cafes. On top of that we provide detailed insights and analytics via our back-end.

PCM: What were some of your biggest challenges for launching this business? John: Business owners who already have a POS are typically locked into expensive long-term contracts and agreements with their existing suppliers. These are hardware + software lock-ins so it’s very difficult for them to quickly move supplier.

startup Spotlight

That’s why we are now making our software available on their existing hardware, dramatically lowering the barrier to switch for these business owners and making it much easier for them to switch to a future-ready solution. We had a big advantage in building the POS from scratch – we weren’t encumbered with old systems or legacy thinking but rather could approach this with a completely fresh perspective and build using the latest (and most future-ready) technologies with a completely omnichannel view of retail — our view being that a POS is essentially a webshop operated by a staff member, while a webshop or a kiosk is just a POS operated by a customer. The channel via which a sale begins doesn’t have to be the one via which it completes, and the switch between channels should be entirely seamless. In this day and age, it’s inconceivable that at some of the biggest retailers in the world a customer still can’t begin a sale via a webshop, walk into a store and add / remove items and pay there and then. Even worse, if you buy online then most of the time there is no way to return products in-store. Both of these situations sound so simple but the reality is that systems in use at the larger retailers were never designed to handle more than one sales channel. The challenge for us is educating the technology leaders at these companies in the possibilities.

PCM: Tell us about your expansion plans and how you go about choosing the next region you expand into? John: We go where the market dictates – as a software product (without a restriction on using specific hardware) we can

rapidly distribute our software anywhere in the world. There are local restrictions in several markets (e.g. fiscal, taxation, etc.) but we are working with some of our global partners to ensure we rapidly comply with local regulations for each new market we gain customers in. We aim to quickly become a global POS provider, and already have customers in over 100 countries. Our goals at the moment are to consolidate in the heart of Europe (BeNeLux, Germany, France) and UK / Ireland before picking up our focus on Central and Eastern Europe over the coming few months.

PCM: What are the 3 things you want people to know about your company? John: We’re extremely flexible and adaptable, adding new features and functionality on a very regular basis; we are easily localised (language, currency and fiscal regulations) and are currently available in 8 languages and over 30 currencies; we are moving to a completely hardware-agnostic model, enabling us to be used on any device currently in a business owner’s location.

PCM: Any exciting news / announcements you would like to share with our community? John: We are adding crypto-currencies to our offering, having closed a partnership with Coinify recently. We also offer mobile payments via bunq, and will have the first accounting platforms (Exact Online, Twinfields, Xero) integrated over the coming weeks.

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.

Floriane Gramlich Global Head of Product Payment Solutions at OLX Group Floriane is a product leader specialised in payments with over a decade of experience gained in banks and international cooperations such as PayPal, eBay and Twitter. She is leading the global payments efforts of the OLX Group as the Head of Product Payment Solutions, solving customer problems around payments in the over 40 markets OLX operates in.

Payment collective

Unlocking potential in highgrowth markets

n this month’s Payment Collective we interviewed Floriane Gramlich, who is the Global Head of Product Payment Solutions at OLX Group. With a wealth of experience in and outside the payments sector, she shares deep insights into developments, challenges & opportunities of the current payments landscape.

PCM: Tell us a bit more about yourself (background and what lead you to Payments & the OLX Group specifically)? Floriane: I have a long background in payments and e-commerce. I started my career in payments heading up the marketing department for the online department of the Sparkassen-Finanzgruppe – one of the biggest financial institutions in Europe. Here, it was lot of ground work: how to make the Sparkassen “fit” for the digital innovations to come and the shift from physical branches to the digital space. The next logical step for me was PayPal, where I first led efforts to increase PayPal’s payment share on eBay in the DACH region and later developed a new payments product aiming at the long tail (SMB merchants) in DACH, Mexico and Brazil. After a detour of almost 1.5 years outside the payments sector at Twitter, I got the great opportunity to build up and head a new payments team, responsible for all payments efforts of OLX Group globally. Coming from rather big market players in the developed countries, this was a big change for me as OLX Group is the leading classifieds platform in high-growth markets. In these markets, the payment landscape and regulations differ enormously and many people are unbanked, so there are large variations of cash payments needed – something not yet catered for globally by most payment providers. A great opportunity, as I always believed that companies also have a social responsibility to support the unbanked and to enable them.

PCM: What are you looking for when selecting a payment vendor? Floriane: OLX Group is a very fast and entrepreneurial thinking company, which fits very well with my personality and style. Moreover, I am very customer driven and also seek to optimize experiences for our customers (consumers and businesses). I am looking for the same spirit in 3rd partners cooperating with us. OLX Group is expanding rapidly, which is a big chance for partners going the “extra mile” and who understand the opportunities of the high-growth markets. In many markets we operate in, we have less than 10% Credit Card penetration and so-called APMs (Alternative Payment Methods) are crucial to offer. These APMs are often non-immediate, where users need to e.g. go to a kiosk or supermarket to fulfill the transaction. These payments are not seamless and there is a lot to do in optimizing the experience.

There is also the consultancy component provided by payment providers: companies often go through lifecycles during their growth when it comes to payments. Payment providers sometimes fail in growing with their customers when the companies become more self-sufficient and independent. Last but not least, I am never looking for the sales pitch: the product should speak for itself and the documentation should be straightforward. Unfortunately, that is not often the case.

PCM: What is the most undervalued part of Payments by payment providers that you see and should be covered more or would be great to outsource? Floriane: Depending on the lifecycle of the merchant, the ability to cater payments End2End, by owning the relationships with acquirers with an easy to handle PCI compliance specification, managing and implementing APMs, a solid reporting and various tools to optimize the experience (e.g. risk management tools). Ultimately, it depends very much on how the merchant is set-up and how willing he is to invest in resources. Even if you outsource everything, the merchant also needs to be very clear about the requirements that a provider has to fulfill. Also the experience payment providers have is often greatly underappreciated. Payment providers often work with various merchants of different sizes and from different industries. Of course, there are NDAs, but their learnings can still benefit other companies in their daily work when partnering with these payment providers.

PCM: Taking a look at the payments landscape, what developments do you see in the future? Floriane: In Europe, PSD2 will change the payments landscape significantly. The monopoly of banks basically ends and banks will not compete against each other but against everyone offering financial services. For banks this additionally creates the challenge to adapt to the new security requirements and to open their APIs. Not all banks are ready for that and the realization that banks need to change to a technology and customer focus is not the norm, yet. So, there are exciting times ahead and we will see consolidations of banks and (even) more and more fintechs evolving. Another exciting thing to come is the ongoing challenge on how to bank the unbanked – something that fascinated me throughout my whole career. I always regarded it the social responsibility of every major e-commerce player to support people to get access to (digital) money and banking services. Micro-loans by non-banks, payments by mobile phone and P2P are just a few things that will change the life of many in the emerging markets significantly. PayU, which is the payments company of Naspers, same holding company as the OLX Group, recently invested EUR 110m in

PAYMENT COLLECTIVE Kreditech – a leading technology group for digital consumer credit and also acquired Citrus Pay in India. Strategic moves that recognize these trends.

PCM: How will these developments affect your payment operations? Floriane: With more payment companies offering viable P2P solutions and operating their businesses in line with local compliance and regulation, we are getting more choices with whom to cooperate with. Also payment providers realize that catering for the unbanked is a necessity for entering markets successfully with strong partners. I expect to get more payment provider into these more complex markets, which ultimately leads to better experiences and enables our customers to pay online even if they do not have access to a traditional bank account or credit card.

actually there is not. Do not assume that Credit Cards are the most common payment method, get yourself familiar with regulation/compliance and start with payment providers where you feel that they can both consult and at the same time are deeply customer focussed. Try to apply a “test and learn” approach and acknowledge failures fast. Also decide very early what the main success metrics are: is it revenues, margins, penetration? Depending on the goals, the payments strategy will look different. Also aim at doing the basic implementation right from the beginning with an End2End view and create a flexible foundation with a solid technical infrastructure that allows for a lot of testing.

OLX Group

PCM: From a merchant PoV, what need do you see coming up in terms of payments in the near future?

OLX Group is the world’s leading online classifieds platform present in more than 40 countries across six continents.

Floriane: There will be more consolidation in the payments sector and the realization that solutions for customer problems should be the center of the strategic thinking. There is still a huge untapped potential in the emerging markets where providers simply do not offer the payment methods customers can pay with. With the shift from banks becoming technology companies and the competitive pressure, these gaps will hopefully be closed soon.

We connect local people to buy and sell used goods, services, cars and properties. We make it fast and easy to buy or sell almost anything through your mobile phone or on the web.

PCM: Finally, what are a few words of advice you would like to tell professionals who are looking to get in to payments and more specifically payments from the merchant end? Floriane: Payments are complicated, even if not everyone recognizes that. Regulation differs from market to market; also the payments behaviour is very diverse. You would expect in the Western markets, e.g. Europe, some uniformity, but

Through brands including OLX, Avito, dubizzle and letgo, OLX Group is the home of online classifieds in high-growth markets. We are the leading destination for buying and selling used goods and services in 35 countries, and the #1 mobile app in our category in more than 22 markets. Globally we estimate that around 11 million items are exchanged through our platforms every single month, giving products a second life and reducing their ecological footprint. In Germany we have one of our most important technology hubs, located in the heart of vibrant Berlin. Our world-class engineering and product teams are contributing to the OLX Group success while their driving innovation and excellence. Our international team more than 25 nationalities - is growing fast, to more than 150 OLXers until the end of 2017.

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