Latest / The Payments Shed / Ep. 24 - Bridging Fiat and Crypto: Rethinking Real-Time Payments for Global Merchants with Volt

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Ep. 24 - Bridging Fiat and Crypto: Rethinking Real-Time Payments for Global Merchants with Volt · The Payments Shed

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Welcome to the Payment Shed podcast, the weekly podcast that
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dives into the big topics, trends and people shaping the
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world's of payments, fintech and business leadership of your two
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Co hosts, myself Grant Evans and Justin Hanna.
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Today we're joined by Stefan Vollet from Vault.
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You are CEO and Co founder. Please introduce yourself.
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Tell us a little bit about your career in payments today and
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your your journey with Vault thus far.
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Yeah. Firstly, thank you very much for
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having me here today. It's a great pleasure.
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Yeah. I'm Stefan, Co founder of Vault
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Indeed spent actually. I've gone through quite a
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journey at Vault. I was initially CTO, then I
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started building a product team, eventually became COO, also
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running the operations with data on boarding.
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And since about Q4 last year, I've been CEO at Vault.
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I've been in payments for more than 10 years.
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I started my payments career at the end, in the very early days.
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There were around hundreds, 150 people back then started in
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partnerships, alternative payments.
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I did a lot of things in the very early exciting days at
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Adiana was great school for me where I learned a lot about
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point of sale, fraud prevention, regulatory.
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I eventually became the VP global expansion based in Latin
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America. I spent a lot of time building
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up the Mexican market, but also spent I've spent a lot of time
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in the US with some of the biggest merchants there, which
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was very exciting for me because I learned a lot about, yeah,
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very mature enterprise merchants and how it is not only geography
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but also verticals impact how how you need to operate your
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platform. Around the time of the IPOI left
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to become a consultant in fintech.
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I wanted to see what else is out there, What what else are people
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building? What is exciting?
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How does stuff really work? So I started consulting with
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founders in very early stages of the adventure building journey.
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So I spent time with Ryan Breslow in the US on bolt.com,
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spent time in a fraud prevention venture, Sentinels, that was
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later bought by Finago and ended up in Poland helping to build
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zen.com in the very early days, accounts acquirer, accounts
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issuer and processor up until about 6 years ago.
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Six years ago, they were three founders of Volt.
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We came together using the Payment Service Directive 2 and
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the opportunity resulting from it to build a challenger in the
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account account space. Back then the industry was
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really focused on very fragmented local national
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payment instruments like so Ford in Germany, especially in
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Nordics, Blick dot Pay in in Poland and we started building
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Volts. And real time payments is, you
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know, something that's been talked about a lot in recent
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years. What?
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What do you think the current state of play is in the market
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as far as real time payments is concerned?
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In real time payments, there meanwhile is a durality of real
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time payments. Six years ago when we started
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building Vault, we thought OK, real time payments everywhere on
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a counter account. We were almost a bit ahead of
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the curve back then because if you look at the context of when
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we started building Vault, it was the just the time when PSD 2
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came into effect, we were kind of in this, I would say third
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phase of counter account and open banking adoptions.
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And the first phase was like ventures building bank
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infrastructure, then the second phase ventures aggregating the
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infrastructure. And we wanted to be the lay on
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top, the productizer for the payments use case because we
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thought at the end of the day, making PSD 2 an account, account
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accessible to merchants, usable to merchants and optimizing for
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conversion is the name of the game.
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So from there we started focusing on real time payments
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everywhere initially in Europe and we will probably get more
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into what we're building exactly throughout the the conversation.
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I think in Europe and if you look put you into a global
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context, there are different kind of flavours of real time
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payments and different executions depending on the
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local governance of the real time payments networks.
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I think you can distinguish between different types of real
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time infrastructure, for instance of peaks created by
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central banks, which is a near perfect payment instrument.
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You have the federalized and decentralized approach in
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Europe, which is productization opportunity.
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Then you have Australia where the banks teamed up to build a
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real time payments platform. And each of these executions has
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their own little opportunities and challenges.
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You know, so some of them are technically super optimized
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orders. We are driven by regulation and
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not optimized with the merchant and the consumer friction in in
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mind. And then the world has also
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moved on. It's moved from account to
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account to a second real time instrument, which is called
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yeah, stable coins and crypto. The question it boils down to
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how real time is real time really.
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So you have of course a counter account clearing guidelines and
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it's networks, which is in Europe for zipper instance
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faster payments like 2 to 15 seconds.
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And then you have stable coins. Depending on the chain you have
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different timelines so you have different finalities.
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So real time can be anything between real real time like
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instant 10 seconds up to minutes and hours.
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So real time is slightly outdated when you think about it
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in that sense, you know exactly you need a new terminology.
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I think it's really interesting with you guys as well.
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And we'll obviously dive into this in more detail, but the
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difference in different regions that we see with A to a payments
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enjoy. You talked about Australia, it's
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a market I'm quite familiar with, but you know, a lot of the
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banks obviously maybe work more collaboratively in that market
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than than we've seen certainly in in the UK.
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So that's quite an interesting one for us.
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And you know, where do you think merchants behind this are, are
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kind of running into the biggest friction points that that they
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might see? I think what the for merchants
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the problems are multi layered so it's probably good to unpack
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it from the consumer perspective.
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So what do consumers want? What they want trust, they want
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to have a frictionless check out, a speedy fast check out and
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that is what merchants optimize for.
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Now they it's it's really how easy is it for the consumer to
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initiate the payment? How quickly do the funds arrive
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in the merchant account with certainty.
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So it's also about consumer protection, but also merchant
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protection like who is actually in charge.
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A good example of some of the, I think, evolving topics that I'm
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very following with a lot of excitement and interest is the
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acquisition of Real and Ideal. And so Real wants to introduce
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chargebacks where the retailers actually feel it's taking away
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their kind of like working payment instrument and making it
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more complex. So what do you really optimize
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for now? Are you optimizing for the
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consumer? Are you optimizing for the
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merchant? And where's the friction point
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between both of those? I think that's quite an
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interesting point there as well. I think when we talk about open
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banking, we think sometimes about the businesses that are
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building the open banking products and the merchants using
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them or how we think about the consumers that are using every
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single day. And you mentioned that around
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around Australia. I think that's quite an
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interesting point. How does it actually work real
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time? If you are a marketplace in
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Australia, you want to pay to a different country in the world,
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the Philippines, how would that actually work from a real time
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payments perspective? Yeah, it's a for me, it's a
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super interesting comparison. So when we we evolved, we
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promote real time payments everywhere.
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That's our goal. We want to be the one stop shop,
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go to player for all your needs in the counter account, not only
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in Europe but globally. We've explored quite a number of
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countries and depending on the market there are different
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challenges and sometimes it's the domestic network, sometimes
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it's the cross-border component that's the challenge.
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Here in Europe, of course, we're still in this transition phase
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where some banks are real time, some still like your own ZIPA
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batch clearing, and then some have really complex internal
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mechanisms. So they say they're real time,
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but they're not clearing real time.
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We are in the money flow, which is quite unique in open banking.
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So we can actually measure what the bank is really doing and we
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can measure the impact for the merchant.
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We can help them adjust the risk appetite or adjust bank
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availability on our check out based on the business model.
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If you're a merchant that has high volatility in their
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pricing, like a airline ticketing or crypto exchange,
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then you want quick settlement and quick finality.
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And we can observe this. And also, for instance, there's
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some banks that switch automatically from zipper
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instant to zipper badge when the transaction amount is higher
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because they really need to protect the consumer and allow
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them additional time. And then the path that
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Australia, for instance, has taken is very different.
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Australia is just clearing transactions in two to five
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seconds. Merchants love it.
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There's a clear price advantage for them.
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It's easy to integrate, easy to use, which is why Australia is
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one of our most exciting growth markets for merchants.
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And the second challenge is, of course, like money
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repatriations. So our main customers are global
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enterprise merchants, PSPS typically they have a yeah, key
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domicile. I'd really want to concentrate a
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cash pool and then cross-border remittance becomes the main
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problem in many markets. And how do you do this
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effectively? How do you do this without 5
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banks intermediating? And that is where the real time
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Fiat becomes less exciting than real time stable coins and
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crypto. A Fiat you would say is kind of
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restrictive in that sense, right, Because we need your very
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interesting business at Vault because you are in so many
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different regions and you you encounter obviously different
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national frameworks. And it feels to me like a lot of
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the Fiat frameworks that we encounter are built for national
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rather than global businesses. And that must be a frustration
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for you guys that you have to kind of try and unpick at Vault.
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Yeah. So our hypothesis is that the
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whole drive and adoption of real time Fiat payment instruments,
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right. So if you remember, Volt is
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focused on payment acceptance on the checkout treasury and then
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payout settlement to the merchant.
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But our hypothesis is that there will be a few regional winners
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like PIGS in Brazil, Patron Australia and orders based out
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of Singapore or UPI India, right, that will eventually
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become dominant across the region.
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The question is how quickly will that happen?
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Obviously, there's a question of regulatory innovation cycles and
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startup innovation cycles. So as a startup and founder and
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CEOI need to take my venture to the country that's moving
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fastest, where I can innovate for my customers, where there's
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a business case. And in some instances, you also
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need to overcome the challenges with crypto, which is why in Q4
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of 2025, which by the time of the release of this is probably
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already passed, we are launching our own Stablecon product.
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So payment acceptance on stablecoins on the checkout, but
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also a treasury for stablecoins so that we can support you with
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money remittance. Many of our customers outside of
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Europe, they want to be settled in USTCUSTT, whatever their
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preferences. And you've, you've seen some
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examples on this. If I remember correctly, Adam
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Stalink was one of the first ones to overcome the
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cross-border challenges with stablecoins.
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And we see an increasing demand for this cutting out the middle
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man, cutting out the complexity of banks who had really like
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centralized the the command on this.
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And also, if you look at just how hard it is to build such a
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business. Meanwhile, so Terape and Volex
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and Wise, they had an amazing journey in the context of the
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time when they started the business, because the state of
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coins was not as mature. It was not regulated, was very
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risky to get into it because it was not clear like if where do
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you end up? So, but I think the world has
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moved on and if you build a global real time money moving
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business, you would not build this on Fiat rails anymore.
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Yeah, you would connect to the local networks and then use
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stable coins for cross-border. And I think, you know, we try
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and unpack some of the the payments jargon on this podcast,
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I think it's fair to say. And if something maybe open
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banking has been culpable of particularly like open banking
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payments, right? And then it becomes paid by bank
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and it's a little bit clearer to the consumer.
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We're in this, you know, we're calling it stablecoin summer or
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we were a few months ago, right? And it's very much a, a buzzword
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sort of vibe. I understand that the benefits,
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but are we doing enough to educate a consumer again on or
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do they even need to know? Should it just be plumbing,
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right? And stablecoins, just something
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that's helping to change the market.
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But we're talking about it so prevalently as an industry, do
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we need to be explaining to the consumers what this transition
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actually means as well? Yeah.
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So that's an excellent question. So I think 2:00 at least two
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angers from this. So one is the the adoption curve
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of account, account and stablecoins.
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So account account payments were very strongly driven from the
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consumer angle, right. So make payments more convenient
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and cheaper and more affordable for the consumer and the
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merchant, while stablecoins is coming from the infrastructure
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working towards the consumer. Now you now see the enterprise
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and treasury adoption and all the capture flowing into the
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currencies to make them less volatile.
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So it's like almost opposite journeys.
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In many scenarios the consumer will not even know what he what
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the processing infrastructure is and you already have a
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convergence similar to this in cards and open banking.
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The consumer experience is basically free to secure A2FA
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which for most banks it's the same experience.
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So under the hood it's like indistinguishable for you as a
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consumer. What is the actual payment rail?
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The only thing you notice is that the counter account is
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probably nicer because you don't have to enter your account
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details and the same will ultimately also happen with the
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stable coins. And for for the larger amounts
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and cross-border it's probably already happening.
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The consumer doesn't know and probably also doesn't care how
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the funds are moving cross-border.
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And for us, the bet is that we're all about consumer
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adoption on the checkout, like how do people actually spend
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their stable coins, which we think is the ultimate next step,
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right? So we're in this on ramp, off
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ramp phase. We have the capital flowing into
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the stable coins, but ultimately consumers will be sitting on
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stable coins and we want to spend them.
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At the moment, there's still a lot of friction in the process
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of spending stable coins out of your wallets, but we think that
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will be the ultimate end game and the experience will probably
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as smooth as it is with open banking and freely secure the
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regulator. For instance, the European Euro
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C might. So the European stable coin
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process will probably quite similar to to an open banking
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experience. And we think that all the order
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of wallet operators will work towards a similar experience as
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well. And you mentioned that.
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I think what we will get into a point here is we know that that
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went from an open banking perspective, stable coins far
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more than just payouts, right? It's liquidity, it's treasury
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management is actually performing a full end to end for
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businesses. Yes, for merchants there are a
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lot of benefits. So we had requests if we can
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hold merchant funds in stable coins because they're also tax
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implications like when do you realize tax triggering events,
15:00
but also just simplifies the whole administration.
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So for merchants, I think there are a lot of benefits and and
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stable coins. What we are building at Vault is
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quite straightforward. We believe in real time.
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We are almost real agnostic. That is the destiny of us,
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right? If you want to be real agnostic,
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whatever is real time is real. Time real agnostic.
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I've not heard that before, but if someone said to me what are
15:21
Vault doing, that's probably how I would try to explain it, yeah.
15:24
Ted, actually I need to remember that I only came up with it
15:27
right now. Yeah, you're fine.
15:29
So what we what we actually work towards is that we started as
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this Fiat based business because like 6 years ago there was not
15:36
much stable coin adoption. So we had built based on PST 2
15:40
this check out easy, easy way to integrate for merchants and
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accept stable Fiat open banking account account payments on a
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check out. We have to underpin this with
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treasuries through accounts, virtual irons.
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We have our own EMI licenses in Europe and the UK.
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And then from there we settle merchants and also facilitate
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payouts. What we're doing is we replicate
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all of this into the stablecorn environment, where with the
16:05
checkbox activation, you can extend your open banking check
16:09
out A to a check out in any geography with stablecorn
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acceptance from the most common wallets.
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We can then receive stable coins in a wallet structure.
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You can do swaps like you can do FX.
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You can exchange between stable coins and Fiat.
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And then from there we can settle and pay out to your
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merchants or your consumers or your merchants.
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And they're quite a few hard challenges that we're solving
16:32
with this and where we try to not go through the complexities
16:36
of working with a lot of banks in some markets.
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We do absolutely want to work with local banks to firstly
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let's say payouts and to make sure we have local licenses and
16:45
regulations and all this. But this journey is like, again
16:49
like the generational journey, like for take up hand orders,
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they had to go through country by country, work with banks.
16:56
But when stable coins are already on chain, you can cater
16:59
to a global marketplace issue wallet.
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You don't have all this complexity.
17:04
So you win on in terms of speed, you win in terms of resource
17:07
commitment to development engineering and to compliance,
17:10
right? Because we would be our own
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master of compliance, right? You just go for a local license,
17:15
you operate this, but you don't have this third party
17:17
dependencies, third party dependencies and removing them
17:21
in your journey as a start up is the most important thing.
17:23
So we believe in infrastructure ownership and license ownership
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and. There's, there's an element of,
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you know, bridging those Fiat and crypto crypto worlds, right?
17:32
Because so many merchants are still operating on the Fiat
17:35
rail, if we want to put it that way, right?
17:37
So is is this kind of the next evolution of helping to bridge
17:40
that gap? Yeah, it's 100%.
17:42
So that is exactly what we're trying to do.
17:45
Again, like our hypothesis is that there's so much capital and
17:49
liquidity going into the crypto right now, right?
17:51
So you can invest to micro investments in the property.
17:54
At some point, you sell the property, then you sit on the
17:56
crypto, what do you do with it? You want to spend it, right?
17:58
You want to buy a car, a watch, you want to buy a meal, right?
18:02
And at the same time, you have, of course, the US Treasuries,
18:05
which will drive a huge Fiat influx into stable coins, which
18:09
is great because it stabilizes the swap and FX rates or the
18:13
slippage risk and all of this. And ultimately it will all lead
18:18
to merchant adoption and consumer adoption.
18:21
We want to make it easy for merchants to learn how to work
18:25
with stable coins on the checkout and then take away a
18:28
bit this fear, right? I think it is probably less than
18:31
1% of the population currently familiar with crypto or has a
18:34
crypto wallet. And it's the same with
18:36
merchants. And some of the infrastructure
18:39
and the interfaces that are provided currently to merchants
18:43
and consumers are probably not similar to what you are used to
18:48
in a treasury function in enterprise.
18:50
So we want to make it more seamless.
18:52
And a good example, there's of course Revolut who have mastered
18:55
this perfectly for consumers, but there is a opportunity in
18:59
the treasury market as well and. What practical steps, if you
19:02
were a merchant, could you take to try and breach that gap right
19:05
now from from Fiat to to crypto? You could call our sales team
19:08
and ask our demo. Say that's the easy answer is I
19:11
get in touch with Vault. OK, fair, fair.
19:15
And and I guess what risks or perceptions around, you know,
19:20
you can take crypto broadly, you know, do do you still find that
19:24
merchants are voicing in that area?
19:28
I think there's an education element to it similar to, yeah,
19:33
the open banking journey with, with consumers.
19:34
You also have an element for this with, with merchants and
19:37
stablecoin. I myself am an average trader of
19:43
cryptocurrencies and even I know there's a few distinct problems
19:49
that probably for a merchant might be quite scary, right.
19:52
And what is the, how real time is it?
19:54
How fine? What is the real finality of my
19:56
payment? Then if you look at slippage
19:58
risk, which is sometimes far greater than the FX pricing that
20:02
you experience in Fiat. So you need to explain
20:06
estimating to make it transparent to them and you make
20:09
them need to create a a tool set in a product where they feel in
20:13
control and where they understand what they're doing
20:15
now. So I think that is that is quite
20:17
important, but also there is a concern about consumer adoption
20:21
similar to other payment instruments on the checkout.
20:24
We ourselves have run an analysis on our hosted checkout
20:27
that most of our merchants are using to see which type of
20:30
verticals are using or offering their payment their, their
20:34
shoppers to pay in stable coins or from crypto wallets already.
20:39
And it turned out that a lot more than we thought.
20:42
And it was the first observation.
20:44
Obviously, it's still really limited to digital merchants,
20:47
but we also see, yeah, luxury retail, even automotive now
20:53
adopting that on a check out. But I think important factor
20:57
there is really this, this volatility of crypto itself.
21:01
Amazing. And bringing this kind of back
21:02
to Volt's perspective and and innovation, where do you think
21:06
Volt is sitting now compared to where it has done in the past?
21:11
Yeah, we have gone through a very long journey.
21:15
We always wanted to be true to account to account.
21:18
Initially we started only here in Europe, yeah, focusing on
21:22
productization of payments initiation.
21:24
We wanted to build this orchestration layer for account
21:27
account across Europe working with the most relevant and best
21:30
in class aggregators of the account account network.
21:34
We have mastered this I would say at the time of the CSP.
21:38
So it took us two or three years to have really good product
21:41
market fit just on a check out. Then we also know we need to
21:44
take this extra step and be in the money flow to really
21:47
understand what are the banks doing?
21:49
Are they really doing what the API says?
21:51
Are they cheating? And then just converting instant
21:53
payments to bad payments and don't tell us.
21:55
Is there a risk we're creating for the merchant that the bank
21:58
actually processes transactions non real time and doesn't tell
22:01
us about it? So we wanted to evolve and be in
22:04
control, which meant being in the money flow, you know,
22:07
because then we have the full visibility from there.
22:11
We then started offering refunds, payouts.
22:14
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22:38
can't recommend it highly enough.
22:40
There's a link in the bio to click on the Tammy website and
22:43
find out more about their product.
22:45
You really won't regret it. We have meanwhile and that will
22:50
also be announced in Q4. So by the time of this podcast
22:53
already live, we have been right built our own bank network for
22:57
PIS across all of Europe. While we started as this payment
23:01
orchestrator, we thought we actually need to become like a
23:03
multi acquirer. And that also means you need to
23:06
have your own acquiring your own bank rails, your own technical
23:09
rails, your own certificates and licenses that you operates.
23:13
You can interact directly with the bank.
23:16
We also wanted to be able to optimize for conversion and
23:19
similar like to cards you want to tweak the authorization
23:22
messages for specific banks to test if you can increase
23:25
conversion convergence, our North Star and I think if you
23:28
call our merchants that have other providers life, they will
23:31
testify that we are killing it with convergence.
23:34
Everyone asked how long that process took 'cause that's an
23:37
awful lot. Of we have taken, we've taken
23:39
almost three years to build this and much of this was an
23:41
incremental build. So just what happened in open
23:45
banking is actually an important part of that story as well.
23:49
Open banking 6-7 years ago, we, we actually had this lack of
23:52
late birth, I would say. So we started the business in
23:56
20/29/2019, 2019 where some of the other players were much more
24:02
mature. So we had token Ting true layer
24:05
already blazing the trail with the banks, with the regulators
24:08
building infrastructure. We thought this is a really
24:11
tough battle. I don't really want to fight
24:13
that, which is why we started with the productization because
24:16
we felt the real end game is productizing open banking well
24:20
for specific use case and for the merchants.
24:23
But then also what happened over time is that open banking and
24:28
some markets enjoyed slower adoption and some ventures had
24:31
to focus and also they had to take their countries, they had
24:34
to take their products. Some actually moved away from
24:37
payments to data. Some didn't do data, just did
24:39
payments. So we thought, oh, hold on.
24:41
We need to be in control of what is happening here.
24:44
We need to be the master of our own destiny.
24:47
We need to optimize the banks that are most relevant for our
24:50
merchants. We need to take tactical bets or
24:53
strategic bets in some cases. For instance, we, as of October
24:57
2025, are now a licensed processor for I Gaming in
25:02
Romania, which is a really odd bet to take and something that
25:06
orders didn't spot. But before.
25:07
This is a really exciting bet. We know the merchants, there's a
25:10
huge potential, nobody's tackling it.
25:11
So why don't we integrate the most relevant banks in Romania
25:14
and experiment and see how that works?
25:17
And Ivo La, we have an amazing USP that orders have completely
25:20
ignored. Yeah.
25:22
And it also allowed us to really optimize for conversion.
25:25
It allowed us to experiment and just to master our core
25:28
business. What does your split look like
25:30
then in terms because I've always seen Vault as like a very
25:32
or agnostic part of the payments ecosystem, but you obviously
25:37
have that direct to merchant book as well.
25:39
Like how do you manage those two parts of the business
25:41
effectively in terms of your B to B kind of enablement product,
25:45
if you like that, that allows other businesses to do what you
25:47
do, but you also have your your merchant division you're saying
25:50
then as well. Yes.
25:51
We have a very clear focus of how we had built Vault from the
25:54
very beginning. We always said we want to
25:57
optimize the business for global enterprise, global digital
26:00
merchants, but also distribution via PSPS and partners.
26:06
Vault was always supposed to be a lean and mean execution
26:09
machine. We just want to deliver amazing
26:10
products. That's what we want to do.
26:12
Fine. There's obviously then also a
26:16
need for some merchants who want to go direct, right?
26:19
And some merchants who are very complex, who have very specific
26:23
needs where you say, OK, this I don't want to leave to a
26:25
partner, this I want to own directly.
26:29
And then there's also an impact on sales cycle, you know, and
26:31
what we're actually good at, Like, am I good at selling to a
26:35
very big enterprise merchant where the sales cycle is five
26:38
years? Yeah, I can do this.
26:41
But I've probably, are we important enough for an
26:44
enterprise merchant to solely focus and engage with us?
26:47
Or is it better to sell via a big PSP and focus on like, yeah,
26:52
working very deeply and with the PSP, it's not a secret.
26:56
It's a distribution. Right.
26:57
Yeah, exactly. It's not a secret that yeah,
27:00
we're we're working very closely with word play and all the PSPS
27:03
now. So we really focus on certain
27:06
verticals to cater to directly, but orders also via partners.
27:09
And for each vertical, we kind of have like specific partners
27:12
that we feel are the most relevant, the most mature and
27:15
the most innovative. We've talked quite a lot today
27:17
about some of the sort of macro shifts that take place in, in
27:21
the well just globally I guess. And, and you've talked about how
27:25
you define your product road map.
27:26
Obviously you've worn lots of different hats in the in the
27:28
business. How much do those macro shifts
27:30
that we see shape your product road map in Vault?
27:35
Yeah, absolutely. That's a very good question.
27:40
There are several dimensions, dimensions in which they shape
27:43
it. So I think in probably the most
27:47
surprising is when probably he's surprising actually is
27:51
regulation, right? So regulation shapes our road
27:53
map a lot more than I would wish.
27:56
Let's talk about the USA by any chance that you as.
27:58
Well, yeah, I can also take talk about this.
28:00
So I mean, I think it's a lot of what we did was also bad, right.
28:04
So open banking six years ago was a bad like it did bad words,
28:06
how quick adoption of the regulatory framework,
28:09
frictionless execution of the banks and that also drove us to
28:14
look beyond Europe, right. So what else is out there in the
28:17
big world? Which are the markets that are
28:19
exciting and which are the markets in which we can succeed?
28:22
And it also leads to the question, what are we good at,
28:25
right? So what are we good at?
28:27
What is defendable and what do merchants actually want?
28:30
So, and there's been also a conscious choice to this, right?
28:33
So do you want to become a payments orchestrator, just just
28:36
plugs in real time networks around the world, but doesn't
28:39
really have an own identity? Or do you want to shape your own
28:42
identity and go into markets where you can product ties so
28:45
you can innovate, where you can really make a dent and beat
28:47
local competitors? I'm usually very competitive and
28:51
I always like to have a clear, a clear competitor.
28:55
I would like to, I perceive as Northstar and then I would like
28:58
to exceed, which is also how we landed in Australia because it
29:01
takes all the boxes like a beautiful infrastructure that
29:04
you can productize in. It's like very complementary to
29:07
our offering in Europe. And Northstar, therefore is also
29:11
feature parity. What I always look when we
29:14
choose market is like can we reach feature parity with cards?
29:17
Why does the national infrastructure allow us to build
29:20
one off payments through e-commerce?
29:22
Does it allow us to do or to replicate the Spotify
29:26
subscription experience? And can we also do something
29:29
like the Uber experience and we have a double message
29:32
authorization and capture and that's why we ended up in
29:35
Australia because it's the ultimate proof point for account
29:38
to account and what it can do when it's done really well on
29:42
infrastructure level. There are also some thoughts, of
29:44
course, to take care of this all towards point of sale.
29:47
It's a beautiful opportunity to execute point of sale, something
29:50
many merchants in the UK asked us to do for VIP sweeping.
29:53
And we didn't do it because we don't think the regulatory
29:56
framework and the technology and banks are ready.
29:58
But we're building all of this in Australia and it's going to
30:02
be the first full feature parity with cards market plus also
30:05
rebuilding our global frameworks there.
30:07
So recurring framework, we're rolling out recurring payments
30:11
starting in Australia, bringing them later on to Europe, really
30:14
capturing the entire spectrum of account to account.
30:17
So that POS product that you talk about that's using an
30:20
effective digital wallet that's powered by open banking.
30:23
As well, you can do a lot of exciting experiments.
30:25
I'm not going to share all the bread crumbs now, but there are
30:28
a lot of exciting experiments that we continue to pursue and
30:31
push forward. With it's interesting though, I
30:33
mean, that is one of the big push backs we see.
30:34
It's not just the consumer protection, but you know, POS
30:38
moves very fast now because of digital wallets, right?
30:40
It's, it's tap, don't even think about it.
30:42
Off you go take your goods, right?
30:44
And you have to be able to match that journey.
30:46
But Australia is an interesting market for me just purely
30:50
because I feel like open banking is quite mature there in some
30:53
ways more mature than other, other locations.
30:55
So you're going to launch products like that.
30:57
We've maybe tried to push them in markets that weren't ready
30:59
for that adoption. So choosing your Geo expansions
31:03
very, very strategically is, is an important part.
31:06
Again, talking to product road map, right, where you're going
31:08
to launch that POS product. It makes a lot of sense to look
31:10
somewhere like that. Yeah, absolutely.
31:11
I mean, we, we are innovators, right?
31:13
I don't want to be held back like by factors I cannot impact,
31:19
right. So and if I'm work in a system
31:21
that limits me and my speed and my virtual execute and I find a
31:25
different system, right. And yeah, also of course a few
31:28
false hypothesis. And I remember the hype of Fed
31:31
now two or three years ago in the US that basically
31:33
evaporated, didn't go anywhere. So we really want to also build
31:37
a predictable and sustainable business.
31:39
So we pick these markets with caution and we still pursue a
31:43
critical path where we incrementally evolve the
31:47
platform towards something much bigger, much more scalable than
31:51
what we currently we have, monetize and materialize it
31:55
because we were always built for the long term.
31:56
We were never built for a quick exit.
31:59
And point of sale is of course an amazing proof point.
32:01
It's not like the core thing we pursue, but if you put the right
32:05
small pieces in place, you will end up with something really
32:08
cool at the end. Nicely, that's kind of the next
32:11
kind of three 4-5 years of of innovation in the open banking
32:15
space. Do you think there's a world
32:16
where where stable coin and national rails do converge
32:20
together to become one? Or do you think they will remain
32:23
in separate words and and and rounds for now?
32:27
Yeah. So obviously you have all these
32:28
regulatory frameworks hitting in many nation states like US,
32:32
Europe, China, like almost every major nation is working on their
32:36
own stable coin framework. It will boil down to adoption.
32:40
It will boil down to technology framework, how easy it is to
32:45
actually access that, how easy or complicated the regulatory
32:49
framework is. For instance, if you look at
32:51
Mika here in Europe, right? So I don't know too many crypto
32:54
platforms that have a Mika license.
32:55
Meanwhile, you know, so relate to the party and yeah, there's
33:00
there's a international component to this domestic
33:03
national component. How quickly can you drive
33:05
adoption? How, what problems does it solve
33:08
for instance, here in Europe, like the thing that excites me
33:10
about European stable coin is that I can probably build this
33:14
without intermediaries, right? All the stuff that I thought we
33:19
can get out of open banking, we will be able to get out of the
33:21
digital EUR. So recurring payments,
33:24
subscriptions, separation of authorization and captures and
33:29
drill messaging. All of this is possible with
33:31
with stable coins. And we are currently building
33:33
the frameworks for all of this in Australia, agnostic for any
33:37
Fiat or stable corn rail. But then the adoption, the
33:40
larger adoption and wider across the world will really depend on
33:44
a domestic yeah, regulators, licensing schemes and how
33:47
quickly you can move. What do you think the impact of
33:49
that will be on the schemes which in their thoughts would be
33:52
on that? Yeah.
33:57
So I think there are payment instruments that are possibly
34:01
less proven for the future, right?
34:05
And therefore who will have less space in a world where a counter
34:10
account and a crypto stable coins are executed well?
34:13
And again, it's like not my personal opinion.
34:15
It's just observing India, observing Brazil, observing
34:20
Poland, observing the Netherlands.
34:22
Any market where real time account or account
34:24
infrastructure was executed well, regulated well, it became
34:28
the dominant payment instrument, right?
34:30
And I don't see any reason why this hypothesis would be broken
34:35
with cards networks. And you of course can also see
34:37
that some of the card networks made the acquisition bets
34:39
already. I think Visa boards think
34:43
MasterCard has a set up and also Amex.
34:47
So all of them have a play but. It's not about, that's right.
34:51
You talk about being a bit of a gambling man and choosing your
34:53
next thing, right? They all kind of got something
34:55
in the stable and I feel they're kind of watching over the hedge
34:57
going OK, we'll see what happens.
34:59
And some of them build their own infrastructure, you know, So
35:01
definitely again, like I'm very much a fan of decentralized
35:07
innovation. And so I mean, not only as
35:10
entrepreneur, but also as Europeans, I want Europe to be
35:13
an innovation hub. But if you look at the past
35:17
decade, then Europe was always the most innovative geography
35:23
for fintech, especially for payments.
35:25
You know, I think there is currently a a break point where
35:30
you see the most exciting Fintech ventures no longer
35:33
coming out of Europe, you know, so where people are starting to
35:36
build them in the Middle East, starting to go into the US And
35:39
there are many factors. And I think in we in Europe
35:41
should very, very deeply think about what we're doing here to
35:44
not scare away entrepreneurs. Do you think like, you know,
35:46
pics and UPI I've talked about a lot, right?
35:49
And they are amazing growth stories, but they also were
35:52
quite opportunistic in terms of the markets that they sat in
35:55
where you had either large unbanked populations or, you
35:59
know, UPIQR codes are very common in, in, in India, right,
36:03
as a, as a way to make a payment.
36:05
I still feel like particularly in the UK and parts of Europe,
36:07
like people are a bit funny about QR codes and for making
36:10
sort of payments directly. But there was an element I, I
36:14
feel with both of those of opportunism, which has allowed a
36:18
phenomenal amount of growth in a very short amount of time.
36:21
And there's not going to be loads and loads of those markets
36:24
that can kind of follow suit. I think more mature payments
36:27
markets in terms of, you know, multiple payment methods, you
36:30
know, the digital wallet capabilities that we've had in
36:33
the UK and Europe for years now. Like if you're going to call one
36:36
out again as someone that that I think has a good crystal ball,
36:38
like where, where do those next opportunities lie for that sort
36:42
of growth? Yeah.
36:43
I think first of all, I think it's so important to mention and
36:47
to congratulate the regulators in these markets to the immense
36:49
courage they had to just make this happen.
36:52
You know, I'm sure they fought a lot of opposition in the market.
36:55
And so if you look at the price equilibrium that was in Brazil
36:58
before it was multiple percent that banks and the crisis took
37:01
for payments now is like basically 0 right, half a
37:03
centre. But so and the adoption and the
37:07
impact it had on the e-commerce environment, the consumer
37:09
protection. So there you can really just
37:10
heads off, right? It's amazing, yeah.
37:14
Then also you mentioned actually another point I wanted to
37:16
shortly get to. So the adoption also depends on
37:20
how quickly you get access to the distribution channels.
37:22
And that's not only partners, it's also the devices.
37:24
Now, for instance, if you want to have tap to pay, which you
37:27
can operate with account account, you need to get on the
37:29
NFC modules. And so and that that ultimately
37:32
this ecosystem, access to ecosystem and facilitating that,
37:36
that is really the key to win. If you look at the markets and
37:40
the opportunities. I've been wrong about this as
37:44
many times I was in the world journey.
37:45
So I don't want to lean myself too much forward, but my
37:49
hypothesis still stands that those geographies that solve the
37:54
problem regionally to unlock corridors will be the winner
37:57
you. Made a really good point now and
38:00
I think we talk about regulation and governments and a lot of
38:03
these other regions where they've absolutely nailed this
38:05
as a payment method in the UK and Europe.
38:08
We've know we want to fix it. We've got the product to fix it,
38:11
but we're not allowing ourselves to do it.
38:13
So although we're extremely innov, innovative and we want to
38:15
make these changes, sometimes we're getting in our own way
38:18
from taking that plunge, making that bet and actually going this
38:22
is what we're going to do. Yeah, I mean, I can only give my
38:27
personal example, right? So I graduated straight out of
38:30
university and learned this amazing job at IDEA and
38:33
implemented PSD, one that was literally my graduation project
38:37
from university. So this whole journey leading
38:39
towards world for me has been a decade, right?
38:45
And back then they were writing the draft of PSD 2.
38:48
And many of the problems that PSD 2 was fighting with
38:50
afterwards were already solved back then, but didn't make it
38:53
into the regulation because the infrastructure maturity I think
38:57
was so was just not there. And banks were so scared of the
39:01
investment, no. So I think we need to solve the
39:05
infrastructure problem. But in the infrastructure
39:07
problem can probably only be solved if you bypass the
39:10
bottlenecks, right? So that is really where where is
39:13
all pointing understanding how can you move fast?
39:16
Who what do you need to put in place to move fast?
39:18
This is a regulation problem, this is a people problem, this
39:20
is a technology problem. And I think that is what needs
39:23
to be tackled more. And I think especially here in
39:25
Europe, we should be a little bit more bold because the world
39:28
is moving at lightspeed and we are not do.
39:30
You keep a good close eye on what the EPI are doing then.
39:34
And obviously the, the, the Ware stuff, that's a reason obviously
39:36
you're based in, in Poland and they're kind of kind of
39:38
amalgamate a few of these payment methods.
39:41
I always talk about the, the kind of free movement of people
39:44
in Europe and the fundamental of that then there should be the
39:46
free money of free movement of payment methods, sorry as well
39:50
that kind of allow people to have easy ways to pay as they
39:53
travel across Europe as European.
39:54
So that's been quite interesting for me to see kind of what EPI
39:57
are trying to do, but it it feels also for myself like.
40:01
That is a battle that's going to take quite a long time as well.
40:04
There's a lot of countries. There's a lot of, you know, we
40:06
talked about real time payments a lot today, but what is a real
40:09
time payment in this country versus this country, this
40:11
country? And like, what does that journey
40:13
actually look like for for for you, do you think?
40:16
Yeah, for us the ultimate goal is to enable local real time
40:20
payment instruments wherever you are.
40:22
And so if you're a Brazilian travelling to Australia, you
40:25
should be able to pay with picks in Australia and then still have
40:29
the funds for executed in real time.
40:31
So which is why we're building this FX and swap framework for
40:35
HRA and stable coins. So if you look at the European
40:39
landscape, I mean, I'm very much European, right?
40:42
I'm this generation 1987 when I went to school Business School,
40:48
I got all this European excitement during my Business
40:52
School in time in the Netherlands.
40:56
And I mean, sometimes I wish we were just more pragmatic in
41:00
Europe, right? So if I mean Viro and EPI also
41:04
is great, right? But if you follow the journey,
41:06
right, it started with let's build something amazing from
41:08
scratch then, OK, let's see what we have, how we stitch it
41:11
together and like, OK, let's buy something else, right?
41:14
So yeah, I mean, I hope they succeed, right?
41:17
So I think there's a need and potential to get it done.
41:21
I think it's solve a lot of problems that open banking
41:23
currently can't solve for, especially like this like double
41:26
message, like problem like authorization capture, which is
41:30
like 80% of e-commerce and many merchants needed.
41:33
So I hope they succeed and I hope we can overcome this
41:36
fragmentation in Europe because again, like for me as an
41:39
entrepreneur, I love complexity, I love mass.
41:42
Like this is my core business, bringing order to mass and
41:44
putting a price on it. This is my core business.
41:47
But as a European, I wish we were just more competitive in an
41:50
international environment as a European Union, because I have
41:54
spent a lot of time outside of Europe traveling, meeting
41:57
merchants, seeing what other countries are doing.
41:59
And they are more pragmatic, faster than us.
42:02
And I don't think Europe as a continent can allow itself to,
42:07
yeah, continue going at this very.
42:09
Slow. There's always an industry that
42:10
feels threatened though, isn't there?
42:11
I mean, I love your example of, you know, bringing picks to
42:13
Australia and I just want to pay that way.
42:15
And it circumnavigates another big industry in FX, right, where
42:19
there's a lot of money lining a lot of pockets as as well.
42:22
So they'll always be pushed back.
42:23
But I do feel like we're in such an exciting place in payments in
42:27
terms of the technology. And, you know, stablecoins is a
42:29
big part of this, but we have this technology now that could
42:33
remove so much pain and frustration.
42:36
But then and you see it when you talk about, you know, Brazil
42:38
and, and, you know, the regulator coming together and
42:40
saying, no, this is just the way we're going to do it.
42:42
Maybe it needs to be more bullishness around, you know, in
42:45
different regions, people saying the product is there, the
42:47
capabilities there, let's open the doors.
42:49
But we'll get there in the very short term.
42:52
We will see, yeah. There are also a few
42:54
entrepreneurial components to this and also and just I
42:58
rephrase some of the things you said, right.
43:00
So there is a reality where prices and margins are
43:02
compressing. There's a reality where the
43:04
regulatory burden increases. There is a reality where the
43:08
entrance barriers into an industry are increasing.
43:11
But there's also a reality where the textech advancements allow
43:16
you to be much leaner in the execution and much faster in the
43:19
execution. And considering these 4
43:21
components, how do you enable an infrastructure that also pushes
43:25
innovation? Because again, like even as a
43:28
small startup or even as a large company, so how do you innovate
43:31
faster than margins compressed? How do you execute faster?
43:35
How do you create value faster? And how do we create an
43:38
environment where we can be competitive on a global scale?
43:41
Yeah, rate compression is one of the big fundamentals in all of
43:46
this, isn't it, unfortunately. But what are they compressing
43:48
from in some of these, you know, again, Brazil, like what, what
43:51
was that rate compression before it got to you say half a percent
43:54
or you know, like there's there's still, yeah, there's
43:57
still good margin in it, right. But.
43:59
So before we wrap up Stefan, our favorite part of the show, The
44:03
Shelf of Shame, we would like to be able to bring something to
44:06
the payment shed and nominate some that you think should be
44:08
banished forever. And ick, some may call it, what
44:13
would be yours? Yeah, I think I would like to
44:15
take the consumer perspective there.
44:17
So I mean, what do you want as a consumer?
44:19
You want a frictionless checkout, You want speed, you
44:21
want convenience, you want security and trust.
44:25
So you want the most trusted payment method on your shelf,
44:27
which is real time payments everywhere.
44:29
So you want real time, but what do you not want?
44:32
What is the antithesis to real time and inconvenience?
44:36
I think it's cards. That's that's a controversial
44:40
one. That might be the most
44:41
controversial one we've seen so far.
44:42
I. Absolutely love it.
44:44
That's what I would say to. Them waiting for the next
44:46
conversation. Yeah, I'm waiting for the amount
44:48
of message you're going to get. Off the back of that.
44:50
I'm not sure I'm allowed to put cards on the shelf.
44:52
For shame. I happily will.
44:54
I will happily put cards on the shelf.
44:56
For shame. Thank you so much for your time,
44:59
Stefan. Thank.
45:00
You very much for having me. Thanks for coming in.
45:01
Bye bye.