How does the Financial Institution license (re)define your role in the ecommerce/payments value chain?
Most solution providers in the payments industry cover only a very short part of the value chain. For businesses, this means dealing with complex processes and many parties as well as the related technology, finance and legal issues.
With the Financial Institution license, ONPEX now provides a solution that unites technology, legal contracts and financial services in one hub. We manage the transaction from the merchant checkout all the way to the merchant funding – including collection, reconciliation, settlement and billing. This means that there is only one contact to the payments value chain and that businesses benefit from increased simplicity, transparency and automation.
What is the most underestimated element in managing cross-border ecommerce payments, in your opinion?
Synchronizing the technical transactions from the shopping cart/gateway with the final settlement on the merchant’s bank account is considerably underestimated. There are no advanced solutions on the market that offer transparent, API-based approaches to this.
Cross-border ecommerce can be hampered considerably by slow and unclear processes and cash management. Fast and efficient processes help businesses save time and resources. They also benefit consumers by increasing transparency and reducing costs. ONPEX white-label solutions speed up and simplify reconciliation and cash management processes noticeably and reduce cost.
What are the obstacles? What do you think is particularly challenging?
The most serious challenge is that there are no international standards for reporting. From a technological perspective this means that data sets are not coherently structured and have to be analysed and arranged in a complex, time-consuming and expensive process. ONPEX homogenises the data from various payment methods and synchronises it with the data on the banking side.
Another issue is the connection of the legacy banking world and modern fintechs. The missing APIs on the banking side are an obstacle and prevent new service providers from speeding up their developments and improving the convenience that businesses and consumers expect from them. ONPEX offers an API to connect easily to the banking world and our Financial Institution license has been crucial for this.
What is the impact of PSD2 on the development of alternative payment methods?
What impacts them most is the stipulation of two-factor authentication. It will break the workflow of several existing payment methods and new ones will have to invest a lot of effort in meeting this requirement.
Plus, the strict interpretation of it means that users require two devices for a transaction. Customers today are used to employing only their smartphone. If this should not work anymore, the user experience will become much more inconvenient.
What is your vision on the future development of the global ecommerce ecosystem?
Several factors impinge on the global payment ecosystem’s development and make precise short-term predictions difficult. Some developments, however, can be seen quite clearly.
The importance of alternative payment methods will increase as consumers from all over the world are looking for secure, fast and convenient alternatives to card payments. Most of them are linked to the development of mobile smartphone-based solutions, which support the speed and ease of payments. Two other important factors from adjoining industries impact payments strongly: global logistics are getting increasingly easy to use and affordable, thus furthering global trade. Secondly, connectivity to payments is becoming a commodity and its global development does, naturally, drive the evolution of payments.
About Christoph TutschChristoph Tutsch is a lifelong entrepreneur and a payments expert since 2008. As he realized that there was no solution enabling businesses to view and manage all their financial processes in a single hub, he founded ONPEX in 2013 to solve the issue.
About ONPEXONPEX is a Luxembourg-regulated Financial Institution and SWIFT member operating a PCI-compliant payment platform. The white-label SaaS solutions meet the highest requirements for payment gateways and banking. They include acquiring for cards and APMs, payment accounts with individual IBANs and advanced cash management. More information on onpex.com
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