On 19-20 November the IV International Conference eCom21 devoted to the topical tendencies and prospects in the field of e-payments will be held in Riga.
One of the partners of this forum for the second consecutive year is Transact Pro company – the leader on the Latvian market of non-banking payment services. Expecting eCom21, Member of the Board of Transact Pro Maxim Yaroshevsky told about the latest trends in the development of online payments, problems and prospects of this rapidly developing business.
The subject of this conference – “Processing. Acceptance of Payments. E-commerce Evolution” – is directly relevant to the activities of your company. In your opinion, what are the main trends influencing this market today?
As we see, a big number of market participants have appeared – startups with new projects and solutions. I think that only a few of them will be able to win their share of the market and develop in the long run.
This wide spectrum of varied payment solutions that are currently offered, proves that there is a very broad range of technological opportunities. The question is, which of them will be selected by the user.
Serious influence on market development is also exerted by the strengthening regulation (legislation, payment system regulations), making its participants act within certain frameworks.
Non-banking payment structures are already starting to take away part of the payment business from banks. What are the prospects for the future? Can these two classes of institutions cooperate or work alongside each other – each in their own niche?
Most probably, non-banking payment structures can only efficiently compete with banks in certain segments, for instance, micro payments, whereas financial flows of big companies and the payment structures themselves will go via the banks anyway. Without a bank, an ordinary service provider cannot make a single payment, be it a card or classical one.
After all, the money of clients is kept in a commercial bank anyway, so, most probably, both parties will learn how to derive benefit from their mutual cooperation. A service provider must find its niche and its client, and work with him. For example, a service provider should pay attention to the niches banks may be not interested in, or that the banks do not see, and offer such products which a bank, either due to its position or size, does not want to or cannot introduce.
It has to be noted that it is hard to compete directly with traditional banking products, at least on the local market. Non-banking structures have tried their hand at the payment business, and now their strengths and weaknesses are clearer.
The potential for the development of non-banking structures is completely different in each region. For example, in Latvia, in the conditions of well-developed retail banking, there is almost no market left for payment institutions. However, in regions where banks do not offer a sufficiently convenient and qualitative payment service, non-banking structures have very good potential.
What issues still remain unsolved for payment service providers? What hinders the development?
A lot of efforts are applied to observing requirements of the regulator, payment systems, IT safety requirements, personal data protection, etc. There are unsolved issues in the legislation, such as the problem of retaining the client’s money. For example, in accordance with the norms of the “Deposits Guarantee Law”, a service provider may not receive the indemnification guaranteed by the law like an ordinary client of a commercial bank.
And what, on the contrary, contributes to progress?
Owing to the development of technologies, the transfer of retail business to online operations has taken place, and it has become the norm for a long time. It is the development of new technologies that pushes the industry forward. This year we witnessed a situation when two IT giants – Google and Apple – joined the convenience of payment game. Such big players may unequivocally set a clear trend on the market and teach consumers to use their solutions.
Doesn’t such development take place too rapidly, outstripping the financial infrastructure and the legal base?
I think the development takes place in its natural way. At first, there is growth and agiotage, lots of new players appear, then correction takes place and some of them disappear. As a result, chief trends to be developed further on are determined.
In what way, in your opinion, will the services of payment services providers be developed in the long run? What new and interesting developments will appear?
The providers, as real startups, will offer many new and interesting things regarding payments. We might see upswings of popularity of the most unexpected payment solutions, but already now it is worth noting a trend in the development of technologies aimed at payment solutions by using mobile devices instead of cards. This is what many big players are staking their claim on, investing in technologies and infrastructure. There are also trends being observed such as the development of card P2P payments, payments from a bank account without a card, cheap remittances and biometric authentication.
What innovations do you focus on in your activities?
We focus on new technologies in the implementation of a new version of a payment gateway, and namely microservices, with the help of which changes required for business will be introduced faster. This will take place at the expense of the applied architecture of microservices, which can easily be scaled for businesses of different sizes and trends, as our clients are small traders and big banks and they all need modern solutions in the field of processing.
It is not our task to start a revolution and to offer conceptually new solutions, we focus more on improving the existing tools and products. When speaking about the so-called payment revolution, we see our role in securing support for the revolutionists.
You are a partner of the eCom21 conference for the second consecutive year. In your opinion, what are the chief advantages of this forum?
The forum is interesting due to the fact that it gathers together a big number of market participants from different regions, including leaders of their industries. They all share their ideas about trends, problems and their solutions. Owing to this, at eCom21 one can find replies to the most important questions, like: What direction is the market developing in? What are the pressing problems of today? What ambitions do innovators have? Such information is useful for the development and correction of one’s own development plans.
The Com21 conference is traditionally held with the support of Rietumu Bank, which is a leader in the field of e-commerce servicing in the Baltics.