The first of two episodes recorded at Money20/20 Europe, took place in Amsterdam in June 2022. We recorded a series of interviews at our exhibition booth with a number of the speakers from the conference. Our guests for this episode were:
1/ Daniel Marovitz, Senior VP of Fintech at Booking.com
2/ Eimear Creaven, President of Western Europe at Mastercard
3/ Søren Skov Mogensen, Chief Growth Officer of Banking Circle Group, and Chris Pirkner, Chairman of EMPSA, the European Mobile Payment Systems Association
4/ Vidya Peters, Chief Operating Officer of Marqeta
5/ James Allum, SVP, Europe at Payoneer
6/ Tui Allen, Product Director at Shopify
7/ Didier Lallemand, CEO of Treezor
8/ Louise Hill, Co-founder and COO of GoHenry
Russ: [00:00:03] Welcome to the Knowledge Circle. This is a new podcast, brought to you by Banking Circle.
My name is Russell Goldsmith, and for our first two shows in the series, we took the team to Money20/20 Europe in Amsterdam, where we invited a number of the speakers from the conference to our exhibition booth to record a series of short interviews with the aim of providing you with a real flavour and understanding of the topics and issues being discussed at the event. In this episode, you’ll hear from senior representatives of Booking.com, Mastercard, EMPSA, Marqeta, Payoneer, Shopify, Treezor, and GoHenry as well as Banking Circle Group’s own Chief Growth Officer.
To kick things off, I was joined by Daniel Marovitz, Senior VP of fintech at Booking.com
1/ Daniel Marovitz, Booking.com
Russ: [00:00:30] Daniel, you were doing a keynote today. The session addressed the question of whether embedded finance can deliver for e-commerce and retailers, what conclusions did you reach in your talk?
Daniel: [00:00:49] Well, look, I think, first of all, just great to be here. Thanks. Thanks for the invitation. I think embedded finance, if you walk around Money20/20, you’ll see on lots of booths, embedded finance so-and-so is doing embedded finance, whatever solutions. And so, the question is kind of what does it actually mean? What is it about? And I guess my takeaway really is this, we had a period of time with this explosion of fintech product and fintech companies over the last decade or even more. And while there’s lots of features and powerful functions and powerful technologies that were generated during that period, what also is kind of true is that there’s a distance between merchants and their customers, because you have all these different payment methods, all these different user experiences, which came in to deliver those new financial products. And so, on the one hand, fantastic, different ways to buy and ways to pay and timing of payment and foreign exchange and all sorts of things. But on the other hand, you also have other forces, other experiences, other user interfaces, which end up interpolated between a merchant and their customer. And so, what I talked about today is my view of it is that embedded finance is a way for us to have a futuristic version of the past. What I mean by that is, you take all of these incredible features and products which have been developed, but in an embedded finance world, what you are able to do is actually give that power to the merchant. So, it’s almost as if the e-commerce merchant is sitting on top of this stack of capabilities, most of which can be done underneath the water, underneath the waterline. And so, you’re delivering more capability to your customer, and you’re powered by all of these other companies. But those companies are behind a cloak as opposed to being front and center. And so, I think what it does is it makes the experience better for the customer, and it makes that relationship between the merchant of whatever flavour merchant and their customer, it makes it more intimate and brings us back to an earlier stage of development when, merchants and customers, even in real life, in a physical marketplace, they knew each other’s names and they knew each other’s families. And so, I think the power of embedded finance is so that we can get that intimacy back but at a distance.
Russ: [00:02:54] And how do you see embedded finance evolving then?
Daniel: [00:02:58] Well, I think quickly and dramatically, I guess would be my major comment. We’re at a stage where there’s a lot of development and across many, many, many spheres, we’ve seen, for example, the whole explosion of buy now, pay later and instalment payments, which give a lot of power to consumers to figure out when they want to pay for things. We’ve had an explosion over a decade of alternative payment methods across the world. There are more than 1000 different alternative payment methods. It’s not just the PayPal’s and the Venmo’s in the States or the Alipay’s in China. There are hundreds and hundreds of these across the world which have all have features and attributes which people like, which is why they exist. Right. Nature abhors a vacuum and they have features that consumers orient towards. That’s also, in a sense, a form of embedded finance. But I think now what we’re starting to see happen is that on the merchant side and the B2B side, the early payment credit capabilities which we often think about as core banking that’s starting to enter into what merchants can do with their suppliers. And you don’t need to be just a gigantic Amazon.com to do it. There are loads of vendors even here at this conference today that would love to plug some capability into your site and give you the ability to service your suppliers in interesting ways.
Russ: [00:04:15] Yeah. Now we’re at a very busy conference. Are there any other trends that you’ve spotted, anything that’s highlighted for you in terms of the marketplace or e-commerce in general?
Daniel: [00:04:25] Yeah, look, I think, there’s always a proliferation and I’ve been coming to Money20/20 and various guises for years. Obviously cyber security in various forms is a topic that never dies. It’s the never-ending arms race. And that’s in strong evidence here as well across many different things. I think what’s new, perhaps or newish is, there’s an enormous number of companies here that are focused on various parts of decentralized finance, so-called de-fi. Blockchain and crypto, of course, interesting to see next year after a bit of the crypto washout we’ve had over the last month, whether quite all of these companies make it through the crypto downturn, I think that will be interesting. I think there’s going to be quite a lot of separating the wheat from the chaff in that space over the coming months and quarters. But certainly, at least today, there’s a lot of guys out there who want to help you with integrating crypto and blockchain solutions into your traditional e-commerce structures.
Russ: [00:05:20] Indeed. Now, Booking.com’s FinTech Business Unit was set up last year. What was the thinking behind that?
Daniel: [00:05:26 Really, two major themes, right. So, the first is, we have a traditional flywheel. We kind of think about it in the Amazonian terms of a flywheel. So, what’s the really simplistic booking flywheel? We’ve got fantastic hotel supply. Because we’ve got fantastic supply better than anybody else. We get lots of travellers who come to us because this is the place to buy it. Because we get lots of travellers, hotels want to give us more supply and thus it spins, right? That’s the traditional so-called flywheel model. And when we set up fintech, we had two objectives. Objective number one, help that traditional simple flywheel of booking, spin faster, cheaper, better. And then goal number two is to create novel sources of revenue using financial product. And so, we’re after really both of those elements.
Russ: [00:06:13] And so how do you envisage Booking.com’s FinTech strategy changing in the future?
Daniel: [00:06:18] Well, we are maybe an unusual company in the e-commerce space. We’re kind of considered a top ten e-commerce player regardless of category. But until six or so years ago, we actually really didn’t do any payments. So, we ran through what we call the agency model, where we essentially served as a giant marketing and distribution system. But the payment was taken, if we talk just about hotels, we of course sell lots of other travel products but just to keep it simple, the hotel process, the payment of the traveller, and we invoice the hotel after the fact for our commission. And that was kind of how the business model worked. So, we’ve been going through a period of really dramatic business model retooling. Over the last four and a half years, we’ve gone from less than 3% of the business where we were involved in the payment to more than a third of the business, were involved in the payment and that’s on the back of a growing business. And that scale is going to continue to come. So, we’re scaling pretty dramatically and we’re scaling our products, we’re scaling the team in fintech, a shout out to fintech people who are looking to build an interesting career in embedded finance. We’ve got a lot of things that we’re doing.
Russ: [00:07:36] Exciting times. Well, listen, good luck with all that. But for now, Daniel Marovitz, thank you for joining the podcast.
Daniel: [00:07:40] Thank you very much. Appreciate the time.
2/ Eimear Creaven, Mastercard
Russ: [00:07:44] So I’m now joined by Eimear Creaven, President of Western Europe at Mastercard. Eimear, thank you so much for joining us at a very busy and very loud Money20/20. What talking points and trends have you noticed so far at the event?
Eimear: [00:07:57] Firstly, good afternoon, Russell. It’s lovely to be here with you and it’s fantastic to be back here at Money20/20 finally in person and great to see so many people here and so many businesses here. I think, what we’re seeing this year is really a hyper focus on how to support businesses and consumers to make payments to make them easily, really accelerating all things digital and looking forward to the new platforms and the new trends. So how can open banking effect and support payments? How are we doing in the space of the new payments, whether it’s cryptocurrencies, I listened to a talk earlier on today on NFTs, so really exciting changes coming. But the focus is on consumers, the focus is on businesses, how we help them digitize.
Russ: [00:08:45] Okay, well, let’s pick up on that then in terms of the consumers, because I’m keen to understand how you think consumer behaviour is changing with regards to making payment and also on their day-to-day finances.
Eimear: [00:08:55] Well, we’ve just come off the back of two years of the pandemic when, with lockdown, everyone was pushed online in a way that really, they hadn’t been previously. So, the technologies have been there for some time, whether it’s, in the physical world, contactless technology or in the online world, supporting people to shop and e-commerce and m-commerce. And we’ve just seen a mass acceleration of all of these technologies. If you think about how you shop today, the physical world and the digital world are clashing, and retailers, big and small, have to be prepared for that. Consumers might start their experience in a shop, but they might finish it online or vice versa. And we have to be able to support this knocking of physical and digital together. And we’ve seen consumers really lean into these technologies. I mean, whether it’s e-commerce on your mobile device, we’re now talking about algorithm commerce. It’s really moving very quickly. And our ambition is to sit behind, support the payment experience, partner where appropriate, and sit at the centre of that and offer people a simple, easy to use, safe way to pay regardless of the channel that they’re in or the environment that they’re in, and make sure that they continue to have that confidence to do so and give them choice however they want to pay wherever they want to pay.
Russ: [00:10:13] You’ve touched on a number of technologies, and there is a lot for consumers who are not in this industry to get their head round. I mean, do you think they’re ready to embrace things like crypto, open banking and buy now, pay later?
Eimear: [00:10:25] Well, there’s no doubt in my mind that some of these trends that we’ve seen, they’re going to push into the future. They’re possibly going to change shape as they do, they’ll evolve as consumers needs evolve. But without question, consumers are really excited about some of these new things. There is multiple, multiple millions now being spent on cryptocurrencies. So, we’ve established our principles of how we want to engage in that space. I think it’s really important that we, businesses together, we work together on that front, but consumers are there, and they love it and they’re testing it and they’re trying it. They might not always work, from a payment, a pure payment perspective, but the technology is there, and people are using it. Buy now, pay later, fascinating space, it’s a credit, credit cards have been around for an awfully long time. But this new form, this new user experience, people are really engaging with that and we’re absolutely leaning into that as well. And we have our own solutions, that we’re offering through our banking and fintech partners to offer to consumers. So, yeah, I believe consumers will ensure that these new ways to pay will be around for a while.
Russ: [00:11:29] Yeah, well, I wanted to ask you, in terms of all these new technologies, how is that impacting on MasterCard and what are the strategies that you have to prepare for this, this whole new landscape?
Eimear: [00:11:38] Well, the pandemic has been fascinating in many ways, but for us as a business, we had a lot of the technologies available to deal with the crisis and to deal with this accelerated digital fashion. We’re rolling them out faster now, and that’s really our focus. That’s my focus. How do we accelerate the adoption of digital? How do we give consumers lots of choice whether they want to pay with their card? Consumers now aren’t just buying, but they’re also sellers. So, making sure that they can use their cards to buy and sell whether they want to pay with their bank account, whether they want to pay using an open banking feature, whether they want to pay with cryptocurrency, enabling that choice, that full breadth of choice for consumers is really important. But not forgetting that the principles of safe and secure, good user experience and applying the appropriate regulations. We have strong customer authentication now in Europe. It’s important that we adopt that, but that it’s frictionless for consumers. So, we’re thinking about all of that and we’re just accelerating it and pushing it through our partners so that consumers understand it and then use it and play with it a little bit more.
Russ: [00:12:46] And obviously it’s great to be back at a physical event. We’re hopefully out of the pandemic now. So, in terms of spending patterns, what are you seeing post-pandemic and also during this, ongoing cost of living crisis?
Eimear: [00:12:59] Well, what we saw during the pandemic was that people were saving because they weren’t able to purchase and consume as much. So, they have built up a nice nest egg. And there is a real ambition to spend. People want to spend, and they want to particularly have experiences. So, getting back on the road, traveling with their families, traveling with business, as we see here, that’s really back. So, we’re seeing things start to come back to pre-2019 levels in a great way. But of course, the crisis in Ukraine since February has definitely had an impact on consumer confidence. It’s low at the moment. People are very concerned about inflation, but they’re still spending. So, there’s a little bit of a disconnect between their concerns and the patterns that we’re seeing. And that will take some time, I think, until we see what happens with the situation and how things roll out. But for today, I think people are confident, they’re back and enjoying being in physical spaces and being here together.
Russ: [00:13:58] Okay. Well, we’ll have to get you back to see how things pan out. But for now, Eimear Creaven, thank you so much for joining us.
Eimear: [00:14:04] Thanks, Russell.
3/ Soren Mogensen, Banking Circle Group & Chris Pirkner, EMPSA
Russ: [00:14:06] So I’m here with Søren Skov Mogensen, Chief Growth Officer of Banking Circle Group, and Chris Pirkner, Chairman of EMPSA. Gents, you were on stage yesterday announcing a very exciting new partnership. Before we talk about that, Chris, tell us a little bit about EMPSA.
Chris: [00:14:22] Thanks much for having us. And indeed, it’s quite an exciting experience because what we’ve launched is a way to make mobile payment in Europe work. Now what’s EMPSA? EMPSA is an association of the 15 premier mobile payment solutions across the continent. Some of your listeners might know Swish from Sweden or Twint from Switzerland or MobilePay from Denmark or Vipps from Norway. I could go on, there’s 15 of them all across Europe, comprising 90 million payers. And what we have done is we’ve gotten together to form EMPSA, the European Mobile Payment Systems Association, and we have figured out how to allow each other to use each other’s networks. So very concrete, it would mean a user from the scheme Twint a Swiss solution should be able to pay in the network of another scheme, let’s say Blue Code in Germany and Austria. So, it’s like the SIM cards that we know that roam in other territories the same way we want to enable payment roaming between these distinct and local European solutions. And that’s what EMPSA does. We have been founded, we’ve done proof of concepts, we’ve done legal and commercial and a lot of technical work to enable these rules and rails. And now what we announced was that the first group of solutions, namely Twint from Switzerland and Blue Code from Austria and Germany, have been putting this live into action with real people and real money moving. And that announcement these two schemes have chosen Banking Circle to provide a critical role in the experience that we’ll focus on later.
Russ: [00:16:14] Perfect. Well, that leads me nicely on to bring Soren into the conversation then. Just explain a little bit more about Banking Circle’s role within this partnership.
Soren: [00:16:22] Absolutely. So, first of all, we’re very excited to be part of this. This is a new European cross-border payment method, and we’re very pleased to be enabling this with our rails. The Banking Circle Group is an ecosystem, and the Banking Circle Bank is at the core of that. Delivering payments, accounts and FX. Now around that is a rich set of propositions within cards, payments, buy now pay later accounts to account payments and lending and much more. So, this ecosystem of payments and financing is something that we would want to deploy to as many use cases as we possibly can, demonstrating and testifying the strength of our platform, the strength of this independent platform that is integrated into the major currencies of the world and thereby able to deliver payments in a fast and cost-effective way. Now, this opportunity here is actually the opportunity, exactly as Chris says, to bring together domestic mobile payment systems into what has got to happen, what has been inevitable that these would come together in a European solution. And we’ve been waiting for that to happen ever since Barclay’s launched Ping It and Danske Bank launched Mobile Pay, we’ve been waiting to see that this would come together across Europe and actually deliver some kind of interoperability. Now, that has now happened, we’ve been working for 18 months to achieve this. And I believe the day before the announcement is when we kind of closed the deal. So, we’re very excited about this.
Russ: [00:18:01] So you’ve closed the deal, you’ve made the announcement. What’s the potential for this, Chris?
Chris: [00:18:06] So in the beginning, as we said, out of the 15 member schemes, two will start off, so Blue Code and Twint, having several million users who go across the border, will be able to pay using this infrastructure. So, Banking Circle’s role is to provide the foreign exchange service for this right or to settle the monies between the schemes. And so, the potential is, of course, that as we see more and more of our QR code users traveling into the other territory, that more and more volume for these cross scheme payments take place. And the bigger potential then is that a third member and it’s looking like this will be Banca Monte from Italy will be joining that framework, so that also Italians can use their domestic payment solution when they travel to Austria, Germany or Switzerland. And at the same token, that Swiss people or Germans or Austrians can travel to Milano and buy an espresso using their local wallets. And so, the potential is that more and more and more of EMPSA members, either by joining to this setup or by doing it on their own, using the same APIs, that we get more and more interoperability in Europe. And of course, the end vision is that every European has a chance and a right to pay with their local app all across Europe without any borders. That must be the goal because it’s a question of sovereignty for Europe to make sure the rules and rails of how we pay are European throughout. And this is what the vision is of this project.
Russ: [00:19:46] There’s no surprise that obviously, you’re going to have other tech providers, Google, Apple, Facebook, they’re going to be looking to also deliver financial services, P2P, P2M, how does that challenge an initiative like this one?
Chris: [00:20:20] In one way, it doesn’t challenge because we all see that mobile payment is growing across the board. It’s a huge market and end consumers can pick the solutions they want to pick. Right. But we see in many of the EMPSA countries that these local solutions have market shares of 70, 80, sometimes even more than 90% of the population using the domestic payment solution. And so, of course, the domestic solutions are mostly account based. So, there’s no card in between, you use your phone, and you access straight the checking account. And so, you can do many use cases that you cannot do with cash and cards. And so, we believe that the way forward is for Europeans to do more and more of account-based payments and to do them not just domestically but all across Europe by roaming through each other’s networks. And we’re quite confident that this is the way this should work out.
Russ: [00:20:59] Fantastic. Soren, if our listeners want to find out more information about this, where’s the best place for them to go?
Soren: [00:21:06] Well, they should definitely go to EMPSA.org and read about this or bankingcirclegroup.com. I think Chris is ending with a fantastic point, which is that we will see more and more payments become account to account based. This is because it is faster, it is cheaper and as new schemes, for example, the request to pay comes in, we will see this improve even further. And you can read all about that. So please, please tune in.
Russ: [00:21:31] Fantastic. Soren Mogensen and Chris Pirkner, thank you so much for joining us.
Chris: [00:21:35] Thank you.
Soren: [00:21:36] Cheers.
4/ Vidya Peters, Marqeta
Russ: [00:21:38] So I’m here with Vidya Peters, Chief Operating Officer of Marqeta. Vidya, thanks so much for joining us. Should we start by a quick introduction to your company?
Vidya: [00:21:46] Russ, it’s such a great time, exciting time to be here in fintech. Thank you for having me on this podcast. Marqeta is the first modern card issuing platform. We enable companies, whether they are large financial institutions like JPMorgan Chase, large enterprises like Western Union or Google or Uber and fintechs like Klarna issue cards to bring very innovative customer experiences to market.
Russ: [00:22:09] Now, you’re speaking in a session later today. It’s about the opportunities for customer engagement and innovation at the checkout. Talk us through some of what those opportunities are.
Vidya: [00:22:20] I think everyone has looked forward to the end of this pandemic and people are itching to go back into stores and have some real in-person interaction to be able to touch and feel and to have real world experiences again. And the point of sale has now become a wonderful place for people to return to. Except digitization has come to the point of sale where it’s not just the end of an experience now, it’s the start of a customer experience. And a lot of companies are grappling with the question of a) how do I make this as seamless and delightful as possible? It’s not about the weight of the checkout line, but it’s about how seamless that payment experience is and the breadth of payment options that you can make available to your customer at that point of sale. So, lots of great innovation happening at what we thought is a very old form of an experience.
Russ: [00:23:08] So can you talk us how that’s going to work then at the start of that point of sale?
Vidya: [00:23:12] Yeah, absolutely. So, we just launched, in partnership with Klarna, a product called the Klarna Card, which enables any consumer, so, you and I could walk into a store with a card that looks no different from the cards you and I have in our wallets, except we can swipe it and immediately choose to pay in instalments over time. So, think about it. There’s no friction, there’s no permission, there’s no pre-approval that has to happen in that checkout line. No embarrassing forms that need to be filled out. But say, I walk into a Home Depot, and I want to pay for that home renovation in four instalments. I can do that with the Klarna card. That is a new type of innovation that has happened at the point of sale. That’s never happened before. It’s so seamless. There’s no element of friction or question for the customer. But that’s just the tip of the iceberg. There are so many more interesting innovations happening at the point of sale when we think about identity and whether you even need a card at all.
Russ: [00:24:01] And how far away do you think we’re going to be from stores where there are no staff in there? And if we do get to that, how are these autonomous stores going to work in practice?
Vidya: [00:24:11] We’re already seeing some of that happen in person where you scan your app to enter a self-checkout shop and then they’re using a combination of biometrics and facial recognition data to watch you as you’re going through the store and adding items to your basket to make that checkout seamless. Now imagine if we didn’t even have to have an app. Imagine if you could wave your palm as a very unique identity and that biometric information is tied to your most favoured payment method on the back end. Think about, then, the level of friction you’ve moved. You and I could walk out of our home without anything on ourselves. No wallet, no phone, nothing necessary. Our identity becomes the way to pay. And I think that’s going to be the next exciting frontier for us.
Russ: [00:24:57] That will certainly stop me checking every pocket before I leave home.
Vidya: [00:25:01] At least you won’t have that question – Did you see my wallet?
Russ: [00:25:03] Exactly, yeah. Now, what about in terms of cryptocurrencies? Are they going to have a role to play in these high-tech stores, do you think?
Vidya: [00:25:10] Crypto is here to stay. And while the valuation of crypto may swing, consumers are clearly telling us that they want crypto to be a part of their everyday lives, not just a novelty investment. In fact, one of our recent surveys said that 80% of the survey responses showed that there was a deep interest in wanting to use crypto as a way to pay for their everyday purchases. And that is actually something that Marqeta powers with Coinbase. So, the Coinbase card is a card that you could go, Russ, walk into a Starbucks, swipe the card and use some of your cryptocurrency holdings to pay for the coffee that morning. And so that way you are really bringing crypto into your everyday purchases. And that’s what’s possible today with modern technologies is you can take all of these new fun, interesting technologies and seamlessly bring them into everyday life.
Russ: [00:25:58] And do you think there’s any other trends that you may have noticed, that’s going to apply in the take up and application of digital wallets.
Vidya: [00:26:06] You know, so much of the emphasis, particularly here at Money20/20 has been on financial technology and payments technology. But I think there is a reckoning here where it’s the technology is a means to an end. What matters and what has always mattered for time immemorial is the customer experience. The technology just helps you solve for that customer experience in a whole new way. And so, my biggest takeaway is whenever in doubt about the technology, come back to what the problem is that you’re looking to solve for the customer and then ask what is the right technology to help you do that in the best way possible?
Russ: [00:26:37] Vidya Peters, thank you so much for joining the podcast.
Vidya: [00:26:39] Thank you for having me. It’s been a pleasure.
5/ James Allum, Payoneer
Russ: [00:26:43] So joining me now is James Allum, SVP, Europe at Payoneer. James, thanks so much for joining the podcast. What brings you to Money 2020, and also what have you seen so far and what are you hoping to see at the event?
James: [00:26:54] Yeah, great to see you, Russ. Thanks for having me. Lovely to be back. First time for me since 2019 and been coming here on and off for about ten years now. So fantastic to see the evolution of payments and really pick up on some thought leadership, some of the hot topics that we will probably cover on a weekly basis and really see what the latest developments are there, great to catch up with some clients and partners and see some old faces from careers gone by. So yeah, lovely to be here.
Russ: [00:27:22] Good stuff. Now, your colleague Jody Perla is speaking on a panel later and that’s around what SMEs need to do to serve their customers better. What kind of things is Jody going to be talking about in that session?
James: [00:27:34] Yeah, so Jody is great. She’s been, I think, one of the first employees at Payoneer in 2009. So seen a lot of change over that period. And she’s going to be talking about some of the more recent developments during and since the pandemic with SMEs. So, there’s been a huge amount of growth. What we’ve seen is more and more people start-up businesses, we’ve seen more and more people list across multiple platforms. And then we’re also seeing a lot of what we call D2C. So, people going off the big marketplaces and setting up their own websites and serving customers directly. So, she’ll be covering some of those themes and developments.
Russ: [00:28:07] And any particular kind of trends that you’re seeing at the moment in terms of payments in general and e-commerce.
James: [00:28:13] I mean, really, it’s all about growth. And the challenge for payment companies like Payoneer is how do we best assist our customers to grow? So, when, if you go back to like pre-pandemic, in some ways it was quite simple. You would probably list on one marketplace and that would be your business. And because of supply chain issues, because of just the explosion of opportunity, people are now just thinking about multiple marketplaces, multiple countries and doing it directly. So, there’s a lot of variety there. And for us it’s very much about handholding the customer throughout that journey.
Russ: [00:28:43] And in terms of challenges, what challenges do SMEs and eCommerce sellers face in this space?
James: [00:28:49] Setting up business is the easy part. So going global, there’s a lot to navigate there. So, whether it be regulation, whether it be tax, whether it be cultural specific. So, we try and partner with a lot of firms that can remove some of that heavy lifting that are doing it for others on quite a large scale. So, it’s probably growing pains, it’s all nice problems to have, but how do we fast track some of those early kind of hurdles.
Russ: [00:29:13] Would you say some of those challenges are more pronounced in emerging markets?
James: [00:29:16] Maybe the opposite in a way. I mean, there’s a huge amount of innovation coming from the emerging markets that probably the developed world is learning from. When you think about in simple terms, if you’re an e-commerce seller or an SME based in the US, you’ve got a huge domestic market to serve before you think about going internationally. Whereas if you’re in a smaller country like Serbia, it’s international first. So, there’s more innovation probably coming out of the developing world than the developed world in this area.
Russ: [00:29:41] And so let’s just finish off then. How does Payoneer help businesses across the world?
James: [00:29:44] Yeah, so it’s very much being with them throughout this growth experience. Some of it is more hygiene factors like for us it’s payments. So, making the global payment as easy as a local payment and that can be through setting up a currency account or FX management. And then as they get a bit more mature, and their needs get a bit more complex, it’s what we call value added services. So, things like Capital Advance and most recent development has been a checkout product to help them on direct to consumer propositions.
Russ: [00:30:14] Good stuff. Listen, James Allum, thank you so much for joining us. Enjoy the rest of the show. Enjoy those catch ups with those old colleagues and new partners, etc.
James: [00:30:22] Wonderful, great to see you.
6/ Tui Allen, Shopify
Russ: [00:30:25] So I’m now joined by Tui Allen, Product Director at Shopify. Tui, thanks so much for joining us. Let’s start with a quick introduction to the company.
Tui: [00:30:32] Yeah, thank you for having me. It’s an honour to get to speak with you. Shopify, for those who aren’t aware, is a commerce platform for small and medium entrepreneurs. We like to think of ourselves actually as like an entrepreneurial platform and really sort of building the infrastructure for commerce. We tend to play a behind the scenes role, but many of your favourite independent entrepreneurs, creators out there that you’re purchasing from typically are using the Shopify platform to actually to use to push their brand and promote their brand.
Russ: [00:31:03] What have you seen so far at Money20/20? Anything that’s impressed you? And also, what are you hoping to get from the experience over the next day or two?
Tui: [00:31:11] First of all, it’s so fun to be back in real life.
Russ: [00:31:14] Sure. Yeah.
Tui: [00:31:15] Still sort of weird.
Russ: [00:31:16] It is a bit isn’t it
Tui: [00:31:17] You’re like, oh, small talk. What is that again? But it’s also inspiring. And you get to just sort of like share experiences, share what’s going on in the industry. As representing Shopify, we’re global and so we have a presence all over the world. And so, it’s really important for us to understand a little bit about what’s happening in the fintech space and just in general in markets that are outside of North America, which is where a lot of our base is. So, for me, it’s been really interesting at the conference to just hear sort of what’s happening across Europe, what are sort of the trends. There’s elements of fintech that’s a little bit more progressive related to whether that’s open banking or mobile banking or some of those things that Europe tends to be a little bit further ahead than North America. So, it’s been good to see sort of a little bit what’s happening there. It’s also, I think, good to recognize that we’re in a difficult economic environment right now globally. But it’s also, I think, an opportunity for some real innovation and sometimes the carbon getting crushed and the diamonds sort of comes out. And so, I think there’s been actually a lot of really encouraging conversations about the opportunities that maybe we have to get a little more precise about where we solve problems and how we solve problems. But there’s some significant opportunities that are going to come out of this interesting global and challenging economic environment that we’re in right now.
Russ: [00:32:42] Now, you’re actually speaking at a session tomorrow. Can we get a sneak preview of what you’re going to be talking about?
Tui: [00:32:47] Yeah, I’m really looking forward to it. So hopefully we’ll have a bunch of folks join. We are going to be chatting about small, medium entrepreneurs and businesses in terms of how they leverage fintech solutions to help promote their brand. We’ll touch, of course, on embedded finances. We’ll touch a bit on how they can make the customer experience more delightful through leveraging some of these financial and embedded solutions, embedded financial solutions. I know for Shopify we’ve got lots of great things that we’ll be sharing in terms of how we view the importance of fintech in the customer experience.
Russ: [00:33:21] Now you gave us a quick intro to Shopify but explain how you’re a fintech.
Tui: [00:33:26] Yeah, that’s a great question. So yes, it’s actually kind of an interesting debate, which I actually love to have, which is like, is Shopify really a fintech? And I like to say we’re actually really far down that fintech journey in that you get to a place where when people don’t realize you’re a fintech, but you actually have all these deep, embedded fintech capabilities across your platform, you’re the best possible type of fintech. If I talk about through the lens of a merchant, our customer running a business, right? So many people think of Shopify as it relates to running a shop or running a commerce presence and being a commerce company. But the reality is to run a business, you actually have to manage finances and you have to manage operations. And for the average entrepreneur or business owner, those are not the things that they wake up every day saying like, yay, I’m going to go reconcile the books or yay, I’m going to figure out how to manage my cash flow. But those are the things that ultimately make them survive and ultimately are the critical must do. And so, at Shopify, what we’re really focused on is actually making those challenging sort of experiences invisible. And that’s why sometimes many folks don’t realize how deep our fintech capabilities are because we’re actually working to sort of make them invisible, and that just works. And so, think of it as sort of like magic, right? Oh, wow. I just got my money. Oh, wow. I don’t even need a bank. Oh, wow. I can actually, right at the point in context or right at the point of doing a specific job, I need some additional funding. Amazing. There’s now this offer from Shopify Capital for me to take advantage of this. Oh, they know that I’m going to need additional inventory. And so, at that point in time, they’re going to offer me some additional cash flow to help me manage that period in time. So, we have a ton of very, very deep embedded fintech and financial capabilities, really dating back to when we started where Tobi, our Founder and CEO, was really looking to figure out how do I sell snowboards on the internet? And the thing that was the biggest pain in the ass was trying to actually manage the payment transaction to complete the sale. And so early, early on, we actually tried to figure out how to solve that problem, which is making frictionless transactions on the Internet and embedding deep payment capabilities and embedding a very, very user centric, we’re incredibly focused on high, high quality user experience, but a high-quality user experience for checkout. So that’s where we got our start as it relates to fintech. And then as we’ve been growing and expanding our presence and really trying to help merchants not only run their shop on Shopify, but run their entire business on Shopify, we’ve been embedding financial capabilities across the suite of what is required to run a business.
Russ: [00:36:17] It’s interesting how many start-ups grow out of the fact that the founder couldn’t find a solution for something, and they end up building it themselves, and then that suddenly becomes the business, isn’t it?
Tui: [00:36:28] Yeah, it is. It’s totally fascinating. One of the things that’s interesting about Shopify is that we, different than other commerce players out there, we try to play a very background role and I think that comes through in everything we do. And so, your question about ‘is Shopify FinTech Company?’ I think most don’t realize that because we 1) play a background role even just as it relates to commerce and really we’re powering millions of merchants across the world. But most and many don’t know really and realize that the best brands that they’re buying from, independent brands are actually using our platform. And the same holds true for a lot of the fintech capabilities and that we’ve just deeply embedded those. Thinking about Tobi and trying to solve that unique problem, there are so many and have been so many clunkiness in trying to run an online business. And then ultimately, we’re now actually really focused on both taking online and actually going brick and mortar and connecting the dots with retail and 2) and really looking at ourselves and sort of like the retail operating system for the future.
Russ: [00:37:35] And let’s just finish off any other key trends that you’re spotting in e-commerce in general at the moment?
Tui: [00:37:41] Multichannel is huge. So, I just actually touched on our focus on being the retail operating system of the future, including our focus on POS, which of course is a ton of fintech components assigned to POS. Right. But as it relates to multichannel, we are hyper focused on making sure that our merchants and their buyers can access good services capabilities from wherever they are. And so that’s deep partnerships with Google, that’s figuring out how to get very innovative with the partnerships we have with TikTok. So, we know that that’s kind of the future of buying. It’s all through social channels, it’s through relationships with influencers, building capabilities to actually support brands, entrepreneurs and influencers is a really cool area that we’re focused on and leveraging all these different channels which across the globe are becoming more and more critical. Another interesting thing that we’re really excited about is the work we’re doing around NFTs and so blockchain and NFTs, as you can think about, especially loyalty brands where there’s a ton of affiliation or, in the world of retail is very much like this if you kind of take it back to, if you’re in Europe, take it back to the Chanel, etc. It’s all about this brand loyalty, right? Well NFTs give you this ability to create these sort of brand experiences, membership experiences and loyalty experiences. And so, this is an area that we’re also from a trend perspective, we’re investing in. We’re doing quite a bit of innovation in that space. And we see that also you can actually combine the social channels with some of this NFT and you can kind of see where the future of commerce is going.
Russ: [00:39:29] Yeah, I think we could do a whole podcast on NFTs, so we’ll have to get you back for that, but listen, for now. Thank you so much, Tui for joining the podcast.
Tui: [00:39:33] Yeah, absolutely. It was my pleasure. Thanks for having me.
7/ Didier Lallemand, Treezor
Russ: [00:39:40] So I’m now joined by Didier Lallemand, CEO of Treezor. Didier, thank you so much for joining the podcast. Let’s start with a quick introduction to the company.
Didier: [00:39:49] Yeah. Hello, everyone. Happy to be here. So Treezor is one of the European leaders in the bank as a service. So, we offer a platform for both corporate and fintechs in order for them to develop their business models all across Europe.
Russ: [00:40:41] Now, what’s been your impression so far of Money20/20 this year?
Didier: [00:40:56] Well, it’s very good to be here again. I was here last year. It was good also after this pandemic. But really this year, the strength is back. Everyone’s here. So, everything is looking like it used to be with a lot of energy. So, it’s great being here and seeing older friends, corporate and fintech partners.
Russ: [00:41:07] Great stuff. And any trends in particular that you’ve seen in fintech so far?
Didier: [00:41:10] Well, I would say it looks a little bit like last year. A lot of payments, of course, still a very big topic, a lot of crypto also. What I, maybe was a little bit surprised at, I would have expected maybe a little bit more of ESG, but probably next year.
Russ: [00:41:25] Okay. Now, talk to us about banking as a service, the model, and how do you explain the success of that?
Didier: [00:41:31] Well, I think it’s really linked to the way the end consumers, would they be people or corporations, want to embed finance in their daily life in the user processes. The bank as a service model is really allowing fintechs, but corporates also to embed finance in their processes. So, it’s allowing people not to have to go to a dedicated office or dedicated branch in order to do the financial part of what they’re going to be doing, which is, buying stuff, it’s really putting that in the middle of the process. And that’s really becoming the normal way of doing things.
Russ: [00:40:03] So your offer is mainly as a tech company?
Didier: [00:40:05] Well, yes and no. Of course, we offer, you know, a very nice tech platform, but we are also a regulated entity. And what we offer our clients, especially our fintechs, is the ability to launch their products and launch their offer without having to go through this process of, being themselves regulated. So, they’re relying on our license. And we are in the end responsible for the KYC. We are responsible for all the compliance processes, the filtering of a flows and that kind of thing. So, it’s really a complete offer, the technology, but also regulation and compliance that we offer to our clients.
Russ: [00:42:09] Talk us through, who are the customers that your service is offered at.
Didier: [00:42:14] So our model is really in giving our customers, which are corporates, the ability to offer their own services to either individuals or other corporations. So, it’s a B2B2B or a, B2B2C. So, our clients are fintechs first, NEOBANKS. But also, in the different lines of service mobility, for example, with the new mobility cards that are emerging a lot, but also corporates, big corporates want to facilitate, for example, emergence, facilitate the processes. We are allowing them to issue cards, so, for example, big corporates who want to have their own cards branded on their name. So, it’s really a mix of fintechs on one side, corporates on the other.
Russ: [00:43:00] How do you see the service evolving?
Didier: [00:43:02] Well, it’s, again, embedded finance getting into more and more processes and having more and more corporates getting in. Fintechs are already big, and they have been our first clients historically when we started. And now we are evolving, we’re expanding in Europe, so serving more fintechs and also the fintechs that we have allowed to grow, and scale are expanding in Europe. So, we’re accompanying them there but also getting into a lot of corporates who want to create those financial portions of their processes.
Russ: [00:43:35] Now I want to ask you about the acquisition, because you were acquired in 2019 by Société Générale. What has that meant for Treezor, and also, it will be interesting, though, how you work together?
Didier: [00:43:46] So the rationale of the acquisition was really two sided. On one side, Treezor wanted to expand its offering, for example, in credit or in insurance, which are products that Treezor cannot produce by ourselves. We cannot hold on our balance sheet some credit lines. So having Société Générale and all the businesses of Société Générale allows us to offer our clients through our platform, through our API, those services. So, it’s really brand well, strengthening our offer and having a one stop shop for our clients. And on the other side, Société Générale is also launching new products that require bank as a service. For example, the Société Générale Network in France wanted to launch an offer for teenagers, which is, something that you see in Neobanks today. But they wanted to do it. And in order to do it in the way that is suitable for those clients, they had to go with the bank as a service model. So, we, Treezor, are powering the offer for the retail network for those teenagers.
Russ: [00:44:49] Exciting times, love to talk more, I know we’re short for time, Didier Lallemand. Thank you so much for joining the podcast.
Didier: [00:44:56] Thank you very much.
8/ Louise Hill, GoHenry
Russ: [00:44:59] So I’m now joined by Louise Hill, co-founder and COO of GoHenry. Louise, let’s have a quick introduction to GoHenry.
Louise: [00:45:07] Thank you. GoHenry is a prepaid debit card and financial education app for kids aged 6 to 18. And we operate across the UK and the US and have well over 2 million customers, still growing.
Russ: [00:45:21] Amazing. Now, you spoke earlier today in a session called What Can You Teach Me? And it was about the lessons challenger banks can learn from the more established ones. How did that go? And any key points that were discussed?
Louise: [00:45:34] It was a good conversation, a slightly unusual angle. I think the question that’s more often asked is what can the incumbent banks learn from the challengers? So good to invert that. And I think some of the topics we covered were looking at some of the challenges that some of the Neobanks have had recently in terms of compliance regimes and compliance controls was looking at how the established banks have nailed that and built that into their infrastructure from day one. Whereas perhaps some of the challenger banks and fintechs have not done that so much, and as they scale and grow, that has to become an inherent part of how they build their structure. So that was probably the main topic. And then I think also the lessons that can be learned from scaling a business and how you have to change your infrastructure and change your organizational structure as you grow and move from that terribly lean level playing field to having more layers in the organization, but without falling into the trap that perhaps we think the incumbent banks have done, where that leads to a loss of agility and speed of decision making.
Russ: [00:46:54] And outside of the things that you were discussing in that session, is there anything else that you think fintechs needs to be thinking about in terms of their offerings to their customers?
Louise: [00:47:01] I think it’s effectively it’s more of the same. I think what’s massively important is listening to customers, testing the water all the time to see what the customers want and making sure that your service is honed to deliver that. Personalization, really making sure that you’re serving the demographic that you’ve set out to serve and serving them well.
Russ: [00:47:23] You gave us a nice overview of what GoHenry does in terms of providing those prepaid debit cards and financial education, the app for children. What advice can you offer on how to communicate with children about financial services?
Louise: [00:47:40] That’s a question I often get asked. And I think the absolutely the most important thing is talk to them, talk to your kids about money. It’s, as an English person standing here today, it’s not something English people tend to be terribly comfortable doing. And a lot of other cultures do it better. But talk to them, involve them, let them understand, whether it’s making a game of it in the supermarket when you’re hunting for bargains or looking at how much a meal might cost or for a teenager, it’s slightly more to do with budgeting, which brand of jeans they’re going to choose because of the cost. But talk to them, involve them. And I think secondly, give them a little bit of money. And again, it doesn’t matter how much, even if it’s twenty pence, give them some money, let them make the decisions about it. And if they spend it and then regret what they’ve spent it on, that’s the lesson. And maybe next time they have twenty pence, they’ll think a little bit more wisely about it.
Russ: [00:48:33] It’s clearly an important issue. I mean, how would you summarize why it’s so important? And also, at what age would you start those conversations?
Louise: [00:48:42] You know, there’s an amazing piece of research that was done probably 15 years ago by Cambridge University that shows without question that financial behaviours start to be set from the age of seven, which, when you think about it, is incredible that at that age it’s already setting the stage for lifetime decisions about money. So, we offer services from age 6 to 18 and it’s never too early. Obviously, they’re very different tools and different decisions you give a six year old than you do a 16 year old. But no, it’s massively important.
Russ: [00:49:16] And any other trends in the sector that you see emerging and also where does GoHenry fit within those?
Louise: [00:49:22] Trends, I think it is massively a continuation of personalization. I think one of the things that challengers and fintechs have done is, is look for where there are gaps in the services that some of the more traditional providers have developed. And I would say, GoHenry’s one of those. There wasn’t a good offering for kids. And so, we’ve plugged that gap and we will continue to work to fill that gap and grow it. But for all challengers, for all fintechs, I think it is that personalization, know your customer, know the niche that you’re serving, whether you move into new demographics as well, but understand the service that that particular demographic want and then deliver it really, really well.
Russ: [00:50:08] Great way to finish. Louise Hill, thank you so much for joining us.
Louise: [00:50:10] Thank you.
Russ: [00:50:13] Well, that wraps up this first of two episodes that we recorded at Money20/20 Europe. So, thanks again to all my guests who took the time to chat with us at the event and of course, there will be a second episode to follow where we’ll hear from more of the speakers from the conference, so do make sure that you look out for that on your podcast feed. If you have enjoyed the show, please do give us a positive rating and review and if you would like to get in touch with the team at Banking Circle, you can do that via the contact form on the website at BankingCircle.com, but for now, thanks for listening and goodbye.