First of all, please provide our readers with a brief overview of the Credorax business model and main value proposition. What drives your company and how is it positioned within the current acquiring and payments processing ecosystem? Credorax provides a digital acquiring solution dubbed Smart Acquiring. The latter is designed to function within a multi-channel retail environment and sees acquiring as a technology-based service – a departure from the more traditional view of acquiring as a mainly bank-dominated field. What backs this view and what are some of the advantages that come with using such an acquiring solution? Benjamin Nachman: Let’s first start off with a bit of history. In 2007, I noticed a dichotomy in the e-commerce ecosystem. At the time, online merchants were rapidly advancing with state—of-the-art technology, yet ironically still being serviced by brick-and-mortar acquiring banks. The light bulb then went off and I realized that it was time for a radical change in the market. I believed at the time online merchants needed an acquirer that understood and could properly address all of their online technology needs. As a result, I launched Credorax as a completely, high-tech acquiring company and six years later, now servicing thousands of merchants and PSPs, that nagging hunch clearly turned out to be right.
Today, the company is still first of its kind in the fact that it is one of the world’s first high-tech companies to become a principal level member of Visa and MasterCard and a licensed financial institution under the Payment Services Directive. Our success we believe is due to our unique business model, which we have coined and is now known successfully in the industry as ‘Smart Acquiring”, an offering that provides partners and merchants with a completely technology-driven unified payment processing and acquiring technology platform and service.
A couple of advantages we hear from customers themselves as to why they selected us as their acquirer include:1) We offer them a painless acquiring experience;2) We ensure quicker revenue results for them via a fully automated and digital onboarding system. In fact many of our merchants begin payment processing in a matter of days.
At the of the day proof is in market rollout success. This year alone we have celebrated major milestones that demonstrate this success such as:
We hear phrases like “omni-channel” or “multi-channel retain environment” quite often, particularly as consumers have grown to expect a seamless, friction-free retail experience irrespective of whether they shop in-store, online via a laptop or tablet or using their mobile devices. What are the implications of this evolution towards omni-channel from merchant’s point of view and how does Credorax come into the picture?Benjamin Nachman: There’s a lot of talk today about omni-channel, but a series of underlying factors are driving this experiential change for consumers. As shoppers become more empowered - using technology to communicate with suppliers - they are also producing more data than ever before. The issue is that though consumers are becoming more empowered with information via the web and social media as well as producing much more data though the various channels that they are engaging in, their in-store shopping experience hasn’t changed enough. Recent research has shown that many retailers are still struggling to become fully customer-oriented; more than 80% of those recently surveyed said they are concerned about how to respond to changes in the way customers engage with them, and two-thirds of retailers also said their merchandising function still focuses primarily on products or categories rather than customers.
As a result, retailers and brands have to reformulate their supply chain strategies to match this paradigm shift in consumer demand. Also, these retailers and suppliers need to ensure that they are partnering with the right provider that understands the market shift that is taking shape.
To that end, Credorax, is well positioned to serve these retailers and assist in both; a)understanding their complex omni-channel needs, and b)providing these retailers with an omni-channel acquiring solution based on its own technology based platform as well as complementing that solution via its vast partnership network to better serve these retailers needs as they come to the fore.
Mobile POS (mPOS) is already a hot topic. Cross-border mPOS is a natural extension of the rapid emergence of a variety of players in this field, all focused on providing mobile-based card acceptance solutions. How does the move from local / nation-wide mPOS to cross-border mPOS affect the players in the European mobile acquiring ecosystem? Benjamin Nachman: As in the traditional CNP acquiring arena, the shift from local, to national and ultimately to cross-border mPOS acquiring will make an already complicated arena increasingly more complex. Even managing cross border payments in the CNP sphere overall is still a challenge because the Eu member states are in completely different stages of development. The same is true for the mobile POS. In fact, the mPOS arena is probably 2 years away from requiring a multi-faceted solution in the mPOS arena as is required now in other areas of acquiring. In the more mature EU markets, mPOS providers are becoming much more visible which is not the case in the less mature markets in the EU. However, contrary to the CNP sphere, mPOS providers all across the EU are still focused on providing a seamless, yet pretty rudimentary core solution for payments processing. The marketplace is still demanding much more… Finding the right complementary partnerships is a good way to be able to offer more in this market and cater to the different maturity needs in the market. Also, it is important to note that regardless of channel, mPOS or not, it is key to remember that in the cross-border arena, the top three concerns are: servicing and support across markets, solving the fragmented payment issue and catering to all regulatory and legal concerns.
According to Javelin, the versatility of the mobile POS business model means that mPOS has the capacity to attract all merchant tiers - from small self-employed cash-only vendors to the largest big-box retailers. In your opinion, why is mPOS suddenly so popular? Why are we seeing this explosion in popularity for mPOS now as opposed to, let’s say, 3 – 5 years ago? Benjamin Nachman: There are many factors that combined caused the sudden explosion, we mainly believe it is because of the following two key changes during the past 5 years:1. The rise of small merchants due to global economic downturn has produced millions of SMEs in the cross-border market and these guys expect/need mPOS solutions.
2. mPOS five years ago was in its infancy, there was a lot of hype back then and less market development and penetration, especially on the technology side. Today this isn’t the case, the technology is there and now able to properly serve merchants.
What have been some of the main challenges Credorax has had to face so far? Benjamin Nachman: Getting licenses across multiple global territories, as there are different steps that need to be taken in terms of legislation and compliance. Specifically with mPOS: the challenge is to educate the market on the need to pull together to create holistic vs. modular mPOS solutions in order to move the market adoption quicker.
Consumers need to feel secure when they make their payment card credentials available via a mobile phone-powered payment. Do you think that fraud is a real concern for the mPOS environment at the moment?Benjamin Nachman: Much less so than in the traditional CNP arena, and that was originally estimated a few years back… because ultimately at the core of the transaction what is occurring in a card present environment and especially in the EU today and soon to be in the US when the transaction will require a chip and pin solution to be in place. Also, the scheme requirements in this arena have been established pretty stringently on the data encryption side of things to ensure that there is no (or little) potential for any “leakage…”
What’s next on the Credorax roadmap? Benjamin Nachman: In terms of market focus, we have our eyes set on Japan as well as continuing our growth in the European market. Specifically in Japan we are working to gain domestic acquiring licensing in the region. As far as our presence in the mPOS market is concerned, we are focused on continuing to partner with leading players in the space to provide a holistic mPOS solution.
About Credorax:Credorax’s Smart Acquiring Solutions are based on its proprietary payment platform, ePowerTM; a Unified Transaction Processing & Acquiring platform built to optimise the payment and acquiring lifecycle process for multi-channel retail environments. For more information please visit www.credorax.com or follow on Twitter @credorax.
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