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Interviews

Matthias Setzer, PayU: "Cross-border expansion is a massive opportunity and a big challenge"

Monday 30 January 2017 | 01:35 PM CET

For a merchant to be successful in an emerging market, he needs to provide all the local bank payment methods, local wallets, and local cards

Could you please tell us a little about yourself and your experience in the commerce, internet and payments industry space?

I have to confess that most of my career experience derives from 12 years of working at PayPal, where I held six different positions that helped me learn more about global markets, merchants, and business opportunities in the commerce space.

Moving back to my current position as Chief Commercial Officer at PayU, I found it really exciting to work for a company that operates in so many areas across the world.

PayU has a very strong foothold in emerging markets such as India, East Turkey, East Poland, East Russia, all across Latin America, Brazil, Argentina, Mexico, to name just a few of its highlight markets. We have great expertise in payments in all these geographical areas.

My responsibility as CCO is to sell this expertise to merchants across the globe and make sure they have access to this wonderful local footprint. Besides that, I play an active role, not just as an operator, within Naspers, a fintech that plays a dynamic role in the market and ecommerce landscape.

What opportunities do you see for international merchants when entering a new market? Do they follow a certain strategy?

What makes markets appealing to global merchants is firstly their population size. We are talking about 2.3-2.4 billion people living in these emerging markets, which is a huge part of humanity. Secondly, many of these countries are going through socio-political changes and economic development. They can have high growth economies and their ecommerce markets are often very tech oriented; they are great adopters of mobile technology.

It is a big privilege to be able to talk to the largest merchants globally and let them know that we have a wonderful payment infrastructure that can give them access to consumers across these emerging markets.

Additionally, PayU does not provide just a few international payments methods. Take for example the international credit card, which is a very popular payment method across European markets, but is not present in some geographies like India, where only 1-2 % of the population has access to such means of payments. Therefore you need to have access to the local payment methods to be relevant to your customers.

For a merchant to be successful in an emerging market, he needs to provide all the local bank payment methods, local wallets, and local cards; simply put all the local payment schemes. This is where PayU is strong: allowing payments for any consumer, as we are connected to over 200 payment methods across the globe, this translates to a better conversion rate, thereby increasing revenue for merchants.

In terms of the strategy merchants follow when entering a new market, it depends on the merchant. Some start by entering one or two countries in the geographies mentioned above, some choose to go by region and continue expanding their services when they see development; others go as fast as they can.

From a PSP perspective, what are your strengths in expanding successfully in an emerging market?

As a PSP, helping merchants expanding cross-border you need great insights into local payment behaviour and in regulations since we also aggregate volumes for merchant that may not have a local entity.

For example, in India, you have over 30% bank payments, 30% wallet payments, and maybe only 30 % card type payments. Therefore, to be a successful PSP, you need to cater to all of those.

Another important aspect of business expansion is scaling and consolidation. In India, we have acquired Citrus Pay, which we will bring together with PayU to create new capabilities that will help us better serve our collective clients. This consolidation process will continue in 2017, and we intend to be an active player in emerging markets to provide our merchants with access to more territories, and to more capabilities in those territories.

In your opinion, what are the challenges facing the payments and ecommerce business in general in 2017?

The ecommerce space is going through many changes and it is hard to predict what will happen. Still, we will continue to see amazing developments in technology: smartphone usage increasingly influences the point of sale and the way consumers pay online. Innovations like voice recognition used by for example Amazon Echo and Google Assistant, will continue to have a big impact on the market, influencing the way people shop, communicate, transact, and do business.

Another area where we see major changes is regulation. You have, for example, the demonetisation in India and its consequences: the full digitalisation of the country is a massive change, not only locally, but also globally. Chances are there will be companies emerging and shaping the global payments landscape. Again, we intend to play an active role in that space. However, it is uncertain what will come next and how it will play out.

In Europe, many changes will come because of the PSD2 implementation; as the execution side of this regulation is not quite clear, that leaves us with no clear regulatory framework from each country where we do business.

In addition, we could see changes in consumer behaviour, a more demanding consumer, as consumers are used more and more to having local payment methods. There may be other areas in terms of data protection and security where consumers’ demands are getting higher and higher and we need to comply with the local regulations.

In your role as CCO, what is the vision moving forward for PayU? Where do you see new opportunities?

PayU is in the early days of this cross-border topic. Despite the fact that we have an amazing network, Uber in South Africa, Netflix in Latin America, and many other amazing companies on board, if you look at the global space and local markets, we are only in the very early days. Therefore, we intend to expand our offerings and bring PayU to merchants in North America, including Canada, in Central Eastern Europe countries like Poland, also merchants in Asia Pacific, in countries such as Australia, Korea, Japan.

This cross-border expansion is a massive opportunity and a big challenge. Bringing PayU to the next level is quite exciting and we have a multiyear plan to do just that. We will go step by step to make sure we have a very strong and solid offering for our merchants.

Regarding other areas of interest, PayU has a few initiatives in the credit area, as we have launched a credit offering in India recently called LazyPay, and have other credit offerings in Latin America. We are looking into new trends and technologies, including topics like digital banking, technologies like blockchain, as we aim to help young, very promising startups with funding or market access to test their model.

About Matthias Setzer

Matthias Setzer is Chief Commercial Officer at PayU global, a leading payments service provider in 16 high growth markets around the world. PayU is part of Naspers' Group that is one of the largest technology investors in the world. Previously, he worked for PayPal Europe, Lycos Europe, and Bertelsmann.

Matthias has more than 15 years of experience in ecommerce, sales and payments. He graduated in Economics and has a MBA in in Finance and Marketing.

About PayU Global

PayU Global is a leading online payment service provider dedicated to creating a fast and secure payment process for merchants and buyers. Our presence in 16 high growth markets and local focus enable us to be the experts and provide the best solutions for each market. PayU makes up the e-payments division of Naspers Ltd.

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