Exclusive interview with PPRO on global expansion, market forecasts, and growth strategies

Thursday 5 December 2019 10:00 CET | Editor: Andra Constantinovici | Interview

Stefan Merz, COO of PPRO talks about how PPRO removes the technical and financial complexity of international ecommerce payments with their platform of hundreds of local payment methods from across the globe

Through a single integration and a single contract, PPRO makes it possible for payment service providers and merchants to create a seamless shopping experience for their customers. 

In light of your recent acquisition of allpago, what can you tell us about PPRO's growth strategy? 

Our acquisition of allpago this year was one huge milestone on our journey to becoming the leading global platform for local payment methods; our mission is to integrate directly to all the relevant LPMs in the top 100 markets. 

Before the acquisition, our customers told us it was important to get direct integrations to the local payment methods in Latin America. Well, we at PPRO listen to our customers and let their needs inform our roadmap heavily. So, once we started hearing that, we knew we were looking at the classic “build or buy?” scenario. But allpago already had these direct integrations into the main LATAM LPMs and local card rails, so the acquisition was a natural step. 

In addition to offering more LPMs in more places, the second pillar of our growth strategy is expanding our offering with value-added services. We gained more functionality and services that are missing from these LPMs, and we continue to add more. For example, if a merchant wants to refund shipping costs, we integrate a service that can handle over-refunds because many LPMs don’t have this as a native feature. Secondly, there are services tied to a transaction. Specifically, the acquisition of allpago gave us interesting FX capabilities. Thirdly, we are increasingly able to expand the portfolio through network effects. We are a two-sided network: Soon we will have 300 LPMs on the one side and 200+ PSPs on the other. This type of network can provide incredible insights on security, fraud, and data. 

The third growth pillar is, quite simply, customer expansion; adding PSPs to our network. The acquisition of allpago provided us with a new customer base and will help us grow this PSP customer base even further in the future. 

If global expansion is a priority for PPRO, what regions are you considering, and what is your strategy for market entry there? 

We are incumbent in Europe; we’re exceedingly confident with our LPM coverage there. And we’re also excited about our widespread coverage in Latin America. The next battleground is Asia-Pacific; we expanded our operations out of Singapore this year, and we plan to triple our headcount there in 2020. Next, we’re looking at Africa, where we are already integrating with M-Pesa. And more to come there.  

An interesting thing about the PPRO offering is that we enable cross-border commerce for PSPs and their merchants, but we’re also a domestic player. PSPs, especially large ones, ask for help with domestic transactions, which require a license and a legal entity in the respective country. In 2020, we are focusing on three markets in Asia as a domestic player: Japan, India, and Indonesia. 

How do you manage such rapid growth? Can you share the key practices that have helped you stay on top of things? 

Two things have helped us a lot: Firstly, we created a roadmap to industrialize our model, consisting of about 65 initiatives. This list features plans to automate, grow and mature our business for the next 12-24 months so that we’re operationally ready for the revenue increase ahead. The other thing is simply the PPRO team: we hire experienced people that strengthen the organization. What is good now won’t be good enough two years from now, so we need great people with expertise to ensure we’re future-proof. 

What is the competitive edge that you bring to your customers in the markets to which you are expanding? Why would someone choose to work with PPRO? 

Our competitive edge revolves around the fact that we, unlike aggregators, integrate hundreds of local payment methods directly to our platforms to serve PSPs. Our customers want to have customizable features, which you can only offer if you have direct integration with the payment method. There is no one-size-fits-all payment method, which is why it is essential to provide as much customizability as possible. Another edge we have is that we don’t compete with PSPs for merchant business. We decided very early that we always want to reach merchants indirectly via PSPs. 

How do you see the payment industry developing over the next few years? Do you have specific opportunities or challenges that you think will be important? 

Commerce will globalize even further, meaning global e-commerce will see significant growth. From that point, which everyone can agree on, I’ve got three predictions. The first is that, as a result of the proliferation of easily accessible local payment methods, the 1.7 billion people across the globe without bank accounts will finally be able to access financial services. 

The second is that omnichannel solutions will continue to play an important role in globalization, although even the term “omnichannel” is starting to be outdated. From our point of view, strong merchants know that it’s all about a “store for one,” and they need to continue to develop a completely individualized shopping experience for their customers. But creating a frictionless experience for consumers means a lot of moving parts. 

Merchants and the PSPs who support them will need solutions to help handle that operational complexity. So, as a result of that, the third prediction I have for the payments industry is that cooperation between payment parties will be necessary in order to offer anything on a global scale. Even companies that compete on one level may partner on another level because there’s no single entity who can provide solutions for all the challenges this industry faces. There will be a mix of cooperation and competition going forward. “Coopetition” will become the norm.

About Stefan Merz  

Stefan Merz has joined PPRO in November 2018 as Chief Operating Officer (COO). In this role he is responsible for PPRO’s strategic operational and organisational expansion and directs the implementation of the corporate strategy. He is working closely with PPRO’s  CEO Simon Black and the company’s international offices. Before joining PPRO he has been working for Siemens and HP Enterprises in the USA and gained wide-ranging experience in implementing business transformations, both in the USA and internationally. Until shortly before joining PPRO, he served as Chief Strategy Officer for Diebold Nixdorf, where he managed significant acquisitions and divestitures. 

About PPRO 

Whether online or in store, shoppers make millions of purchases every day using digital payment methods. Local payment methods are the dominant payment methods globally, used in more than 70% of all consumer transactions. PPRO works with PSPs and local payment methods around the world to help merchants optimise the payment experience for their consumers. We enable PSPs to offer their merchants the cross-border and local payment methods consumers trust and want to use. We offer 150+ local payment methods on a global scale. We process, collect, reconcile, consolidate and pay out to merchants – all through a single contract, single integration and single platform.


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Keywords: Stefan Merz, PPRO, payments processing, global expansion, local payments, online payments, allpago, LATAM, LPM, merger and acquisition, acquisition, card rails, PSP, payments service provider, M-Pesa, Europe
Categories: Banking & Fintech
Countries: World
This article is part of category

Banking & Fintech