Peteris Pildegovics, eComCharge:"Creating a payment processing of ones own vs using a ready-made proposal"

What are the main trends in the field of ecommerce for banks, PSPs and acquirers?

Ecommerce market is growing fast worldwide. In 2014, in some countries, the number of electronic payments by bankcards, for the first time in history, exceeded the number of payments made in cash. This encourages banks and PSPs that did not use to provide services to receive online payments, to look at the industry of the internet acquiring as a new and very promising market.

However, to become a player in this market, in addition to knowledge of how the internet acquiring works, it is necessary to possess a quality platform to provide services for convenient and safe online card payment acceptance and processing. Up-to-date high quality and secure infrastructure and software is the base for a successful online business of any acquirer or PSP.

Now here the question arises: whether it is best to create this payment processing system on one’s own or to use a ready-made proposal from an experienced vendor.

Todays reality is that to succeed in business one must focus on its core. Non-core activities should be outsourced. This is a major trend in the world of finance.

SaaS products or in-house development? What is the right way to go for bank or PSP dealing in ecommerce?

Card payment accepting and processing is a very complex technical product, which has to meet high demands - from integration options to PCI DSS Safety Compliance. In addition, a processing system is not mere software. It also includes server infrastructure that is subject to the same stringent safety requirements.

To create a processing system you will need a team of experienced developers and system administrators. I want to stress, that the team must be experienced precisely in the development and administration of the card transactions system because the field is very specific. Even highly skilled programmers first inevitably face challenges while developing a processing system, which significantly delays the implementation of the project.

But even after the system is developed, it will require regular maintenance, updates and further development. This means that the acquirer or PSP will have to employ at least four or five highly qualified and therefore highly paid technicians.

SaaS product means it uses vendor’s network infrastructure. So it is the vendor who is responsible for all timely service and maintenance.

Does SaaS product include everything that is needed for a PSP or bank willing to work in ecommerce?

One of the most significant advantages of any SaaS product for the user is that there is no need to install, update and maintain the servers and software.

Payment processing platform beGateway, being an SaaS product, has everything an acquirer or a PSP needs to work with ecommerce and more. First, our platform is certified according to PCI DSS Level 1 requirements. This means that our customers do not need to go through the complicated and expensive certification procedure themselves.

Second, beGateway has broad functionality covering all needs of an acquirer or a PSP when working with card transactions.

Third, although the platform is located on our servers, it is offered to acquirers and PSP as a white label solution. I.e. the interface, documentation, the domain name to log in the back office and administration system are all created to match the acquirer’s or PSP’s style and design. At the same time, we monitor the platforms, sustain their performance and promptly install necessary updates around the clock. The client does not even need to care about it.

What do banks and PSPs need to undertake in case they are not satisfied with the existing payment gateway, but have invested a lot in its development?

The most common problem is with the technically complex elements of the processing system. Many people can develop a great user interface with excellent reporting system, beautiful graphics, etc. on their own. However, when it comes to the development of a payment gateway or an anti-fraud system or risk management, very few people are able to create a quality product. The thing is that these subsystems are quite complex from the technical point of view and plus, there are stringent safety requirements for them. Therefore, if you invest a lot of money in your own payment gateway development, but in the meantime understand that you are not satisfied with the created product, it is better to stop. Do not waste more money. Use ready-made payment gateway from the experienced vendor together with those parts of the processing system, which you have already developed and which meet your needs.

Your primary customers are from the EU and the CIS. Why is the CIS region attractive for eComCharge in terms revenues, e-payments acceptance as contrasted to cash, and ecommerce development as compared to EU?

We started with the EU market and we are still working actively and offering our products to the EU customers. Ecommerce in the EU is already highly developed. Therefore, it is both simple and complicated at the same time. 

The simplicity is that our customers have a clear idea of the payment services market. They can articulate their problems and describe their needs.

On the other hand, the EU market is highly competitive. Therefore, we look at emerging markets that are now experiencing the greatest demand for online payment acceptance and processing technology. The CIS countries are such a market. Ecommerce is rocketing in the CIS. An increasing number of people begin to trust bankcards as a means of payment. Say, 3 years ago, the cards were used exclusively to withdraw cash at ATMs, but now people prefer to pay by card. Besides, people have discovered the benefits of online shopping. There are a lot of online stores, focused on the CIS local markets. Consequently, there is a need for internet acquiring and payment service providers. It means there is a demand for our services, since we offer technology for acquirers and PSP.

What is your next area of interest to provide your services to and why?

I think after the CIS, or maybe even alongside the CIS, we will turn to the markets of Central Asia and the Middle East. The reasons are the same: the rapid development of ecommerce, and hence, the need for our technology that provides the acquirers and PSPs with a safe and convenient processing system and enables them to start their business.

According to the recent research, the banking sector in countries like the UK, France, Spain, is decreasing because of online platforms. Are PSPs affected in any way by this phenomenon and, if so, how?

Any business aims at minimizing their costs. It is alright. In a highly competitive business, it is impossible to increase profits by raising the price of services, so the most effective way to boost profits is to minimize costs. One of the most effective ways to reduce costs for traditional banks is to turn away from the expensive offline offices and look at remote service systems.

As for PSPs, just like banks, they strive to reduce costs. Unlike banks, PSPs already run their business via the internet. Of course, I am talking about the PSPs engaged in the service of online payments. Therefore, there are no extra branches and offices that could be closed. They have to find other ways to cut costs. And perhaps, the only option here is to get SaaS products, rather than create and maintain their own platforms.

About Peteris Pildegovics:

Peteris Pildegovics is a Head of Business Development at eComCharge. By taking the key positions in the field of finance and client relationship management for more than 15 years Peteris is bringing broad experience to eComCharge growth by constantly increasing number of satisfied clients. Peteris has in-depth knowledge in ecommerce, international markets and customer service.

About eComCharge:

eComCharge delivers White Label software and infrastructure ensuring card payments processing for payment service providers and acquirers in a Platform as a Service (PaaS) model. Modular payment gateway architecture allows integrate certain modules into existing system. eComCharge is paying strong attention to anti-fraud prevention solutions, ensuring the clients safe and reliable payments. eComCharge is EU-based PCI DSS Level 1 certified.