Fintech and Banks: The best of both worlds – exclusive interview with ING and Payvision

On 29 January 2018, Payvision, a global merchant acquirer and omnichannel payment provider, announced a strategic partnership with ING. Payvision has agreed to sell a majority stake of 75%, creating a new synergy that will accelerate its ambitious growth plans within the dynamic payments market, extend its global network and broaden its payment product portfolio.

We have sat down with Gijs op de Weegh, Chief Operating Officer at Payvision, and Evelien Witlox, Global Head PM Payments & Cards at ING, to learn more about this strategic partnership which also signals a change of attitude in the fintech landscape.

Could you tell us more about how this partnership came to be? Why did you consider selling a majority stake to ING bank and what do you expect to accomplish following this collaboration?

Gijs op de Weegh (GW): After 15 years of tremendous growth, we needed to accelerate our business plans, further invest in innovative products and enhance our customer service. So, Payvision was ready to make a new step in its evolution within the payments space. By agreeing to a majority stake by ING, we lay the foundations to build the next-generation payment company. We are confident that by combining the knowledge, strengths, and reach of both companies, we will continue developing our journey to innovation in the payments space, as a global merchant acquirer and omnichannel payment provider. Furthermore, the combined offering between payments and banking products driven by a data approach makes it unique.

ING has stopped at 75% and decided to keep Payvision as an independent company. Why not go the extra mile and fully integrate Payvision into your core business? What benefits does a bank gain by keeping fintechs independent?

Evelien Witlox (EW): The fact that the management will maintain 25% of the shares and continue to lead the company underscores their strong belief in the potential and growth opportunities of our partnership. Over the past 15 years, under their leadership, Payvision has developed a great business, with a proven technology in an area where ING wants to grow. By keeping the company at arm’s length, we can both benefit from our combined strengths; benefitting from ING’s scale, lending and working capital solutions and our worldwide distribution network while leveraging on Payvision’s processing platform and solutions and the flexibility of the company.

FinTechs and banks working together seems like a Romeo and Juliet type of story – both families want to keep them separated, but they still end up together. Do you think that collaboration between FinTech and banks is the new norm? If yes, why?

GW: Collaboration amongst all parties in the industry is certainly the key to further progress and innovation in the payments space, keeping the customer at the center of all our decisions. Customers don’t necessarily want to replace their banks, but they demand a better banking experience. Hence, FinTech companies and banks can solve the market and consumer challenges together, not replacing one another. They need to complement each other to create more efficient products. In this sense, together with ING we are pioneers, we see great opportunities for both companies to learn from each other and the arms-length relationship will allow us to continue and even accelerate our rate of innovation and growth.

FinTech companies and banks can solve the market and consumer challenges together

As Payvision is a modern, data-driven company, we have researched the bank extensively and talked with C-level stakeholders to secure our ambitious growth plans. ING is a modern bank, increasingly structured on agile principles, with great attention to innovation in the financial services space. In the past years, the bank has taken a completely different route to innovation, moving from the traditional banking approach to the future of banking where the customer stands central. So, we are certain that ING is the right partner for us.

EW: We believe Innovation is about 3 C’s: Customers, Culture and Connection. Regarding connection; we don’t have a monopoly on good ideas, that’s why we partner with many FinTech companies – now more than 120 of them. Investing in these partners is one of the ways we cooperate with and help them. We believe collaboration with FinTechs is key to further implement our Accelerate Think Forward strategy and to improve the customer experience by making banking personal, instant, relevant and seamless.

We believe collaboration with FinTechs is key to (...) improve the customer experience by making banking personal, instant, relevant and seamless.

Partnerships offer us a great learning experience (we learn about agility, creativity, entrepreneurship), while offering to the fintech partner a strong brand, a large client base and financial expertise. We currently have more than 115 active partnerships.

But also, our own innovations (such as Yolt, Payconiq and TWYP) have brought a lot of change both at the back-end as in terms of creating a differentiating customer experience. However, we see that changes in the external environment are happening faster and faster, which means we have to anticipate and step up our pace as well. In this context we also launched ING ventures, a EUR 300 million FinTech fund to invest in start-ups and FinTech companies that already gained some market traction.

So, we are pragmatic in partnering and open to all types: from nurturing our own FinTechs (e.g. Yolt, Payconiq, TWYP) to taking smaller or larger equity stakes as we did with Payvision. However, each investment/partnership should fit our strategy: create a differentiating experience.

In an article recently published in the Financial Times, Ralph Hamers, chief executive of ING, said that “open banking” regulation had opened the door to Big Techs entering the market, calling this a “threat to banks”. Are partnerships such as the one between ING and Payvision part of a strategy to protect against Big Techs entering the finance industry?

EW: The banking sector is definitely seeing disruption coming from tech players, but we also see that many of them value the cooperation with companies like ING. Payvision is a good example and we believe that customers will strongly benefit from Payvision’s omnichannel payments platform complemented by ING’s lending and working capital solutions and its worldwide distribution network. I think we are a frontrunner in innovation and we know the financial sector very well. We have more than 36 million customers and a strong brand. Those are definitely important elements in serving our customers.

At MPE 2018, we heard a lot of talk around data and how it has become a valuable resource. In your opinion, is the partnership between banks and fintechs the best way to leverage customers’ data to create added-value services?

GW: In the omnichannel era, retailers have an ever-increasing amount of payment data streaming back to them from various sources – in-store, online, mobile and social. This massive volume of information is one of the modern merchant’s most valuable assets when it comes to better understanding their consumer, improving their payment authoriza¬tion rates and locking out fraud. And yet, properly leveraging payment data requires expertise, resources and a lot of time. That’s why, of the mountains of data produced, less than 0.5% is ever analyzed and used by retailers.

the combination between FinTech PSPs and banks creates a unique opportunity for sharing and collecting data

We are putting data at the heart of our solutions, crunching the data behind every payment and
reporting back to clients with great insights that eliminate risk, enhance customer experience and maximize revenue. Moreover, the partnership with ING can give us a head start in offering new enhanced products based on the new regulations; the combination between FinTech PSP and banks creates a unique opportunity for sharing and collecting data enabled by the new open banking PSD2 regulations.

As I am sure you have noticed there are more and more fintechs entering the market, some with dreams of disrupting the industry. What advice would you offer them?

GW: First, I’d like to make a point here. There hasn’t been a real disruption in the payments market in the past 30 years and I don’t expect it to happen in the next 10 years either. So, people may dream of disrupting the industry, but I believe that the only area where disruption can really take place is cryptocurrency.

EW: Together you are stronger, so where and when it makes sense do look outside and seek the right partner that can help your company to move to the next phase.

About Gijs op de Weegh

Gijs op de Weegh is the COO of the Payvision Group. He oversees the ongoing business operations within the company and the development and implementation of Payvision and Acapture’s overall corporate strategy, including business development, joint ventures and strategic investments.

Gijs had accrued extensive knowledge into the ecommerce and global payments industries. His vision concerning future trends, innovative payment solutions and the continuously changing online payments landscape are regularly shared via the two corporate blogs of Payvision and Acapture, as well as through many media interviews. 

 About Evelien Witlox 

Evelien Witlox joined ING in 2016 and is the Global Head of Product Management, Payments & Cards, with responsibility for payments, merchant acquiring and commercial cards. This strategic product portfolio is heavily influenced by major shifts in client needs, technology, regulation and the changing business models.

Evelien’s focus is on the consolidation of Cards & Payments, PSD2, Instant Payments, International Payments and distributed ledger technology. She is currently overseeing the bank’s PSD2/XS2A programme as well as overseeing the development and roll-out of instant payments. She has more than 20 years of international experience in the Payments industry across retail and wholesale banking.

About Payvision

Payvision is one of the fastest-growing global acquiring networks in the world. In the last decade, Payvision has independently built an international acquiring network connecting banks, PSPs, ISOs and their global merchants in the US, Europe, Asia and the Pacific. Payvision simplifies the complexity of cross-border ecommerce through a single, highly secure payment processing platform for all transactions processed worldwide, with domestic processing, a high-end reporting interface, and a solid risk management solution.

About ING Group

ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s 52,000 employees offer retail and wholesale banking services to customers in over 40 countries. ING Group shares are listed on the exchanges of Amsterdam (INGA AS, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).