Frank Nolden started his career in IT as a software developer and has traversed the complete software development cycle when working for Volmac and Cap Gemini (developer, technical design, functional design, requirements engineering, etc). He then worked for MaXware Benelux in Amsterdam and went on to work for Clear2Pay when the latter acquired MaXware in 2003.
Per October 2009 Frank Nolden founded PowertoPay and started as CEO for PowertoPay. He has defined and designed the “Payments as a Service platform, which is a unique concept in the payment delivery world. PowertoPay focuses on the delivery of payment files to a bank and the retrieval of digital statements from a bank as a service. In this area there are still numerous challenges. Mostly this is solved using heavy and expensive software licenses, but Frank Nolden is convinced that the future in payment delivery is in an easy to use service based on a yearly subscription.
The Paypers: First of all, I would like to ask you to please provide our readers with a brief insight into the vision behind PowertoPay. Why a corporate payments platform?
Frank Nolden: In the past 10 years I have been working in the payments industry and more specifically at the interface between companies and banks. I have seen that the area of payments delivery to the bank and retrieval of reporting information from the bank are not as easy and straightforward as everyone thinks. On top of that banks do not talk the corporate language and vice versa.
Also connectivity is becoming more and more complicated for companies because banks are withdrawing from the software development market and are no longer offering customers software to make the connection to the bank like they used to. Of course there are many internet banking applications which are easy to use and do not require a lot of technical knowledge, but these are not suitable for bulk payments processing where I am focussing on. For the bulk delivery of payments banks simply provide customers with specifications (communications protocol and file format) on how to deliver the files to the service window of the bank, but no longer deliver tooling around validation, communication, authorisation and security. The customer has to do it all alone or turn to the market for a solution. PowertoPay jumped into this market because I found there was still a lot to improve.
The Paypers: How does PowertoPay work? What is your main value proposition and how is it delivered?
Frank Nolden: PowertoPay solves the challenges around bank connectivity in the most easy and generic way as possible. We connect the customer of the bank to our platform and connect the platform to the bank again adding value added services on top of this. Value added services we currently have are validation and syntax check of payment files, authorisation of payment files, encryption of information during transport, etc etc. Specifically the security aspect is very important. After all, we are talking financial data here…
Our value proposition is that we take away the burden of bank connectivity at the side of the banks’ customer. Customers only have to open up one tunnel towards the PowertoPay platform for all their bulk payments. The platform routes the payments to the correct bank for processing. Together with the bank connectivity we deliver value added services which range from authentication and authorisation mechanisms to customer self service in maintaining the customer environment on the PowertoPay platform.
The platform is delivered as a service with a very small piece of connectivity software to be installed in the customer environment. This piece of software ensures the secure transport of the file to the platform over HTTPS. Of course we also deliver an API, which the customer can use to integrate the connection to the platform in their infrastucture.
The Paypers: Why target the corporate market? What are some of your company’s strongest selling points, in your opinion?
Frank Nolden: In the corporate market it is very difficult to sell software licenses for bank connectivity. Corporate’s core business is not processing payments and thus they are not very eager to spend a lot of money in this area. I have experienced that lump sum investments are extremely difficult to do and thus I have come up with the unique “Payments as a Service” concept. The SaaS concept is a subscription-based solution, which enables the customer to hide all the costs in the operational costs and only pays for what he really needs and uses.
Upfront it is clear how much payment processing will cost for the coming year and the customer will not be surprised with extra costs for maintenance, support, upgrading databases or application servers etc. This is all in the package and PowertoPay will take care of the all operations and scaling of the platform.
The Paypers: Your services are offered in SaaS format. In your opinion, what are the top 3 benefits of providing payments services in a subscription-based format?
Frank Nolden: In my answer to your previous question I already have summed up a few of them. But of course there are more benefits of which it is difficult to make a top 3; they are all very important. To name a few:
I think these are reasons enough to start looking at SaaS based solutions.
The Paypers: What are some of the main obstacles you have encountered so far?
Frank Nolden: When delivering a software licence, customers never question the behaviour of that piece of software. They easily accept the sales story of the vendor (amongst others about security and functionality) when they select and purchase software.
I simply extrapolated this into the Software as a Service (SaaS) world and… bumped my head. When selling SaaS solutions, prospects all of a sudden start asking many more (detailed) questions about the security of the platform. What kinds of measures I have taken against fraud and intruders and if the platform has been certified. All logical questions, which of course I have thought about before starting the service, but this is something I underestimated in the beginning.
However – as a word of advice - I do think that customers should ask the same questions when selecting a software package. Licensed software also introduces threats, like new possibilities of fraud from inside or backdoors in non-certified software packages.
The Paypers: What is the opt-in procedure for companies wishing to access your services? How long does it take for a company to be fully connected?
Frank Nolden: Our goal is to make the service as easy as possible. As an example I will sketch the process of configuring a new customer on our platform:
The time involved until the customer is fully connected ranges from a week to a few weeks. Mostly this is related to the agreements with the bank and applying for the security certificates. The configuration and installation of the PowertoPay part takes on average 1 – 2 days.
The Paypers: Where is PowertoPay now? What are you currently working on, and what is your customers’ reaction to your services?
Frank Nolden: Currently we have been very successful with our corporate to bank connectivity to the ING FTP Service. ING has been phasing out the 9-year-old Finstream bulk delivery channel for the wholesale market and replaced this with the ING FTP Service. Together with ING we have successfully migrated a large number of ING customers from the Finstream platform to the ING FTP Service using the PowertoPay platform. This has enabled us to continue and extend our services portfolio.
At the moment we are working on our next major release of the platform, where we will deliver specific Service Bureau functionality where customers are processing payments on behalf of other companies. This release is due end of June and will contain a file splitter functionality, stronger security mechanisms using PIN numbers over SMS and our unique “activation-email” functionality ensuring that changes made on the platform need to be activated by a third person avoiding errors and fraud.
Our current customer base is extremely happy with the platform as it is now. Of course we have had some minor hiccups (the service is only 8 months young), but together with our customers and the bank we have worked around those and improved the platform dramatically in a very short amount of time. Our customers are specifically very enthousiastic with the PowertoPay service because of our support service and our strategy behind the platform. The platform enables them to grow along with the service, but due to the fact that the service is subscription-based in their own pace. They can start using new functionality the moment they are ready for it and start paying from that moment.
The Paypers: Where is PowertoPay headed? Where do you see your company two years from now?
Frank Nolden: We want the PowertoPay platform to be the de-facto platform for bank connectivity for the SME market. This is currently targeted towards the Dutch market (this is the main reason why our website is still in Dutch), but with the future projected releases also towards the European market. With the arrival and implementation of the SEPA instruments we think we can make the difference in this area for the SME market.
The coming large releases this year after our Service Bureau release I mentioned earlier will include multi-bank connectivity around end of Q3 and SEPA support around the end of this year. Together with these larger releases we will focus on increasing our market reach and be able to deliver services to corporates who bank at other banks than ING alone and corporates who are having trouble with the implementation and support of the SEPA formats.