Ireland ‘Can Be A Payments Tech Hub’

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Via The Sunday Business Post: Ireland has the potential to be Europe’s payments technology hub, according to Eric Horgan, country manager of Elavon.

The payments technology firm, which has its European headquarters in Dublin and another office in Arklow, employs 400 staff in Ireland and plans to add another 40 in the next year.

“There are a few big players around, but it’s not as obvious as other sectors. We have our European headquarters here, PayPal is just up the road from us, and then there are the likes of Realex, so there is an ecosystem developing,” said Horgan.

“[Minister of State] Simon Harris has called out payments as a specific area for opportunity for growth. It’s primed for an ecosystem to develop. We see the existing payments firms and Facebook and Google are looking into the sector as well. I’m confident of seeing more businesses in the sector blossoming here.”

Elavon’s primary business is in point-of-sale devices for card transactions, but Horgan said online payments were becoming an increasingly important part of the firm’s business.

“Online has been part of what we did traditionally, but the message just wasn’t as loud. Businesses looking to get online get confused about who they have to work with,” he said. “We always had relationships with the gateways in Ireland. It sounds trite to say [that] 20 years after the first e-commerce payment, but the market is still growing.

“The opportunity is there and our clients are moving online, so that’s where the growth is going to be. We’re going to reach a stage in the not-too-distant future where more than half of our transactions are online.

“We’ve got to look at how we address our routes to market and our distribution channels. We need to plan for the challenges ahead.”

Horgan said that while there were significant opportunities for established firms in the payments space, challenges lay ahead for Irish startups in the sector.

“Britain is the largest European market for e-commerce so a lot of businesses will look to start up there. A small FinTech firm looking for a payment institution licence will typically find it easier to get that licence in Britain than in Ireland; we hear that a lot from the startups we work with,” he said.

The Elavon country manager said the shift in attitudes from both consumers and businesses would lead to more opportunities in the payments sector.

“The attitudes have totally changed. We see far more innovation from businesses both online and in the hardware being used. We’re launching a product in September that turns a tablet into the entire point of sale and I see those kinds of devices being the standard in two or three years time,” said Horgan.

Realex, which was acquired last March for €115 million by Global Payments, is an Irish-established firm which is looking at new ways to develop the payments sector.

“We have the potential to span all the countries in which Global Payments operates. The biggest thing that has changed for us is the scale of the opportunity,” said Gary Conroy, managing director at Realex.

“It’s still an Irish management team here. It’s great for our customers because we can offer a one-stop shop now, and it’s great for our people as they can see something that they built being used across 31 countries.”

Conroy said established players in the FinTech and payments business needed to set an example to inspire the next generation of Irish startups.

“There are the strong and successful established companies here. There’s a great payments capability here and the wider FinTech start-up scene is strong. There’s a good base of talents and knowledge,” said Conroy.

“We can see our headcount growing soon. We will probably be announcing something in that respect in the next month. It’s a story of scaling. Ultimately, those people that we want to get in will be all about accelerating the product road map,” he said.

“We’ve got to look at how we address our routes to market and our distribution channels. We need to plan for the challenges ahead.”

“The newest startup is probably Fire, spun off from Realex, which Colm [Lyon, founder of Realex] is running now. What people need to see are role models from both the individual perspective and the companies in the sector. When entrepreneurs see this, they see it is possible to build a scaling payments business out of Ireland. They can attract people to work for smaller startup companies.”

According to Lyon himself, the innovation in the sector bodes well for the future of the payments business in Ireland. However, he said that more structure was required.

“We are trying to create the next generation of the current account experience. It’s all about the speed at which people can open accounts in multiple currencies. The idea is to give people speed of access,” said the Fire chief executive.

“There are not many non-bank licensed institutions in Ireland. There aren’t many companies here regulated to provide payments services,” said Lyon. “Companies should be licensed, but it’s not the licence that’s the barrier. We invested several million euros to bring Fire up to where it is and it’s still pre-revenue. If you want to build a product servicing this market, executing payments instructions, you need to have compliance structures in place. So the cost of building a FinTech business that is regulated is higher, but you could say that about biotech and other sectors.

“When we created Fire we wanted to be a global regulated entity, but there are other businesses that don’t want to do regulated and they can deliver services around that and sell that technology on. There is a need in the sector to come together. We are trying to create a FinTech and payments association in Ireland to make that happen.”

“What people need to see are role models from both the individual perspective and the companies in the sector. When entrepreneurs see this, they see it is possible to build a scaling payments business out of Ireland.”

For start-ups entering the payments space, one of the chief appeals is the new audience coming on-stream that expects a faster service.

“This is an audience that is used to seeing messages arrive quickly and they can see the person typing. They can see what’s going on. They have no idea why money is sitting in a bank for days at a time and how it moves,” said Charles Dowd, chief executive of Dublin-based Bynk.

The start-up, which was founded last April, is developing a person-to-person payment app that is targeting 16 to 25-year-olds who are used to messaging apps like WhatsApp and Facebook Messenger.

“Payments is a space which has really been focused on merchants and businesses. We are trying to bring it back around to being about people, how people access their funds and move them back and forth,” said Dowd.

Originally published in The Sunday Business Post.

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