With a wealth of payment methods now available, the big challenge for ambitious merchants is efficiently integrating them all. Here, Matthieu Barral, SVP of Sales in the UK for Checkout.com discusses his company’s proprietary platform, growing KYC demands and the future of a fragmented payments industry
There are now nearly as many different types of payment method and technology as there are types of merchant. Whether it’s Visa, Mastercard, Apple Pay, Google Pay, PayPal, or a little-known local payment superstar (of which there are legion), there’s an overwhelming plethora of options.
The challenge for merchants, especially those operating globally, is how they now integrate with the world’s 50 or 60 different payment methods successfully.
“The payments industry is really fragmented,” says Matthieu Barral, who leads Checkout.com’s commercial team in the UK. “In the UK it’s relatively simple; the challenge comes when you want to take payments elsewhere. One of our merchants came to us recently and said ‘I need that payment method in Egypt’ – Fawry [the country’s leading, super-cool electronic payments company using more than 105,000 cash outlets, bank wallets, and the MyFawry mobile app to facilitate transactions]. So we developed it for them. That’s where we, as an enterprise, help you, as an enterprise, to be better locally. Having the correct payment method can, in certain markets, increase your revenue by 40 per cent.”
Checkout.com has enjoyed spectacular growth in recent years, tripling its processing volume in 2018, fuelled by new partnerships with leading companies, including ecommerce platform Visualsoft. It has become one of the big payment powers behind the new, app-driven retail throne, occupied by players like Deliveroo and AnyVan with their often complex marketplace models and associated payment needs.
Headquartered in London, the company broke European funding records in 2019 when it announced a $230million funding round, which gave it a valuation of around $2billion.
The fast-growing fintech helps companies worldwide to accept more payments through one integration – Checkout.com’s unified global payment processing platform, which features in-country acquiring, fraud filtering and more via just one application programming interface (API).
Its 700 or so clients, including some of the planet’s biggest brands, use its technology for faster processing speeds, increased reliability and full visibility of transaction data, including a reconciliation tool showing costs per purchase so they can see where they are incurring the highest fees and take action to reduce them.
Processing more than 150 currencies, Checkout.com has direct connections to Visa, Mastercard, American Express, all major international cards and relevant alternative and local payment methods in each market.
It adopted an alternative fee structure and a high-touch approach, such as collaborating with client development teams on bespoke solutions, to swiftly grow European demand for its innovative online payments toolkit. Now, the ambitious fintech has entered the US market, opening offices in Boston and San Francisco, to compete with the likes of Stripe and Braintree, which own a rather sizable chunk of the ecommerce enablement market.
A gateway, acquirer and processor in one, Checkout.com has made its name by supporting businesses that have gained traction, creating a much larger portfolio of merchant service and payment solutions to accommodate their clients’ individual growth plans. It works with a business at the critical point where it’s looking to expand into a new jurisdiction or offer new, or a wider range, of payment methods.
A case in point in the United Arab Emirates is Freedom Pizza delivery company. With 10 current locations, 250 employees and 135 drivers, it’s poised to go global – targeting high-value markets such as the UK. In moving away from bank-based gateway payment services, founder Ian Ohan said the company found a more collaborative partner in Checkout.com, which he describes as having a dramatic impact on the business’s development. Onboarding these types of enterprise merchants swiftly and safely while giving them a good customer experience is still something of a know your business (KYB) challenge, says Barral: “Getting the datapoints is still one of the main issues in the industry. There are great companies working on it, but no company in the world does a full, automated KYB check quickly.”
“In terms of onboarding, one of the main questions that we always ask is ‘who is the main UBO (ultimate beneficial owner)?’. If that person can show it’s them who owns the business through fingerprint or another unique identifier, then they don’t need to gather, say, council tax bills from the last few months. This makes it much easier because, with many businesses, someone other than the UBO takes care of the admin. I think biometrics will be important going forward, although perhaps more on the SME side than at the enterprise level.”
At the same time, the Cloud is also proving increasingly important for compliance and anti-money laundering safeguards within the payments industry.
“The amount of data we collect is absolutely huge, and we need to store it for a few years to meet regulatory requirements,” says Barral, who oversaw the company’s migration to Amazon Web Services. “They are really helping us to scale quickly. They help us to always be live and connected. If a big merchant, like Facebook, calls us tomorrow and says ‘I want to process with you’, then we can call AWS and increase the amount of servers we have in less than a week. That’s crucial because our traffic will increase massively and we can’t have a negative impact on our other merchants.”
In fact, according to Barral, Checkout.com has such GAFAs in its sights. “To really go after Google, Facebook and all those really big players, you obviously need to up your game. I joined the company four years ago when we were 25, 30 people. We’re now around 500 and we’re developing more and more engineers. The goal is to be 1,000 in the next year – so lots of hiring!”
He also predicts a busy time for the wider payments industry, driven by open banking.
“I believe there will be many surprises to come,” he says. “I think businesses will converge – you can see how the likes of Visa and Mastercard are currently buying up companies to make sure that they’re ready.
“You go to Portugal, and you have Multibanco. You go to the Netherlands, you have iDEAL. You go to Germany, you have SOFORT. You go to Sweden, you have Swish. It’s really hard to make people switch the way they pay, so I think that every country will ultimately have its own domestic player, along with Visa, Mastercard and PayPal, which are here to stay. These big multinational companies will simply buy the companies that are most relevant for them.
“The future will be shaped by such partnerships and collaboration.”