Anna Tsyupko, CEO, Paybase spoke to Katia Lang, CEO TFT about her drive for enabling platform and crypto businesses to succeed through Paybase’s API-driven solution.
KL: Anna, tell us about Paybase? What is the main idea behind it?
AT: There are a huge number of businesses that are being underserved due to the legacy technology and legacy thinking of the payments industry. Firms that need to route payments between multiple parties, as is the case for effectively all businesses in the booming gig/sharing economy, are not receiving the payment flexibility that they need. This results in many businesses having to alter their business model just to accept payments, and sadly, many businesses failing to reach market. The core principle of Paybase is that this should never be the case. We have built a solution centred on flexibility, which raises the bar of what payments can and should do.
KL: What is unique about Paybase? How does it make the world better?
AT: In the most simple sense, we’re allowing businesses to build better products. There are no other payment providers offering what we are – the chance to truly leverage payments as competitive advantage. As an example, we’ve had a fashion marketplace come to us that wanted to instantly reward social media influencers for driving sales to their site. We’ve had an equipment rental platform that needed to perform Due Diligence on its customers, as opposed to just its merchants, to be able to insure the items listed. These firms came to us as other payment providers told them that their ideas were not feasible. That is how we make the world better – we allow innovative ideas to flourish in an area where they have been held back for too long.
KL: You mostly work with platform business clients. But why are cryptocurrency companies so keen to work with you too? How do you work with them?
AT: What many cryptocurrency businesses need is fiat-to-crypto interoperability. Our solution is totally API driven, meaning that the crypto business does not need to handle the resource-intensive task of manually reconciling payments. Furthermore, we operate as the legal custodian of customer funds, meaning that we take on the responsibility of all regulatory obligations relating to the customer in terms of fiat funds issued. In essence, the payments automation and level of regulatory cover that we’re offering cryptocurrency businesses allows them to operate their business with substantially more ease.
KL: Was it essential to become FCA regulated? Has it been very tough?
AT: Yes, you have to become regulated to be an electronic money institution and to offer the functionality that we do, we need the ability to issue eMoney. I won’t sugarcoat it, the process is not an easy one. But this is not a complaint – it should be that way. There is a lot of regulation surrounding payments and rightly so, when dealing with money there can be no room for errors or weaknesses in securities. Ultimately, it benefits you and your consumers, so whilst it is tough, it’s wise to embrace the regulation. Thankfully, as we are regulated, we can absorb all of this responsibility from our clients, allowing them to focus on running their business.
KL: You got so far already, and are on-boarding your first six clients! Very impressive. What has been the biggest challenge so far?
AT: Remaining calm and steady throughout the journey as a business. I believe state of mind is the most important thing in successfully running a business as you need clarity and calm to think things through strategically. Sometimes you face unexpected setbacks, so that ability to remain cool is what will enable you to approach things from a different angle and find the best solutions moving forward.
KL: What are the main steps for Paybase in the near future?
AT: Primarily, to expand into Europe, which we aim to do later this year. Whether we leave the EU with a deal or not, Paybase is in an equally strong position to help businesses grow across Europe – we are excited about the challenge! Aside from that, we’re continuously speaking to interesting new businesses and we’re looking forward to onboarding many more in 2019!
KL: What are the main trends in the Payments sector for 2019 as you see them?
AT: I think that when PSD2 and Open Banking were introduced in January 2018 people expected too much too soon. It was always going to take some time to adopt, but I think that’s exactly what will happen this year. I’m particularly excited to see the PISP functionality become more mainstream and provide an interesting alternative to the checkout experience for customers.
Secondly, I think more firms will begin to view compliance as an enabler for business as opposed to an inhibitor. However, this is dependent on fintechs being flexible enough to offer ways to leverage operational and regulatory practices – such as improvements to due diligence processes or risk management, for example.
Finally, there will be a greater appreciation of the need for crypto-fiat interoperability. The idea that crypto is the enemy of traditional payment systems is becoming increasingly irrelevant – more and more businesses will look for ways to bridge the gap between more established and more novel payment methods.
KL: Your main piece of advice to other fintech CEOs?
AT: Unless you have a vast amount of resource, it’s important to be reasonable with how much you attempt to take on. If you’re B2C, focus on customer-centric aspects of business, such as marketing and product market fit, and get a third-party to provide parts of your backend (payments being a good example of that). If you would prefer to build out that type infrastructure yourself, go down the B2B route. It may be tempting to try and do it all, but each aspect you take on will produce unforeseen challenges that can really slow you down. Fintech is a very exciting space, but you need to choose your areas of focus in order to build best of class products.
Kl: What is your reason for creating this company? What would make you most proud?
AT: Before founding Paybase I worked in investment management and we had a fintech company in our portfolio. In that type of role, you need to not only know everything about the company, but also the nuances of the industry. I was able to see the limitations there were in payments and felt that there was a real opportunity to innovate and improve the sector.
What makes me most proud is seeing how excited our clients become by the fact that we can provide exactly what they need – no compromises, no fuss. It’s a great feeling being recognised as a business enabler – one of our clients called us their ‘secret sauce’ which is incredible!