For the IT industry there are few things in life that cannot be improved by converting into 1s and 0s, and money is no exception.
Since the launch of the credit card in the UK some 50 years ago the financial industry has been steadily working towards the obliteration of hard cash, replacing it with plastic, online merchants such as PayPal and, most recently, contactless cards.
It is a process that the new chief executive of the PPRO Group, Simon Black, is thoroughly in favour of, so much so that he has staked his livelihood on it as he moves from the payment services provider Sage Pay, a subsidiary of the software giant.
In one of the first interviews after his appointment, he tells CBR that the days of cash as anything other than a marginal way of spending money are numbered, a view he has held for some time. "I think in the future we’ll use cash as much as we use cheques today," he said. But is he right?
Payment explosion
There is no shortage of alternative ways to pay for things online and even in person these days. Whereas once people were limited to cash or cheques, increasingly they will carry several payment devices on them, including a contactless card and even their Android or Apple smartphones.
This proliferation of payment methods was what drew Black to PPRO. "Really it was because of looking to the future of payments and seeing what PPRO is doing," he says. "I was impressed by the potential for growth that PPRO has globally."
His introduction to the firm, which specialises in the aggregation of various payment types, actually came through his previous employer Sage, where he spent a decade working. He became familiar with PPRO when Sage Pay became a customer of the company.
Working as the chief executive of Sage Pay, Black became particularly interested in multi-channel payments, a growing concern for retailers as customers increasingly expect seamless service online, on mobile and in brick-and-mortar stores.
His role at PPRO is something of an extension of that. "As ecommerce is maturing in Europe if you want to sell to a tech-savvy customer you need to offer the payment types they want to use," he said. It is this assertion that PPRO has built its business on.
Such a view hinges in part on the differences in payment culture between countries, which often varies considerably. As Black points out, Germany, where PPRO was formed, has a "cultural aversion to credit", in contrast to Britain where folks are happier to be in the red.
Cultural aversions
Payments are not the only financial subject Britons and Germans differ on, as PPRO well knows. Black’s appointment to the group followed three years after the group moved its headquarters to London.
Such a move was prompted in part by what Black calls the "responsive regulatory environment", which he claims is more mature and less bureaucratic than some of the alternatives.
Working alongside the company’s founders Philipp Nieland and Tobias Schreyer, Black will be responsible for the daily operations of the firm, whilst Nieland focuses on strategy and Schreyer leads the commercial activities of the group.
The main responsibility of the new chief executive can be defined in one word: scale. "When you have got a fast growing business what’s key is in deployment of resources," Black says, adding that is true for small business and large alike.
More specifically the chief executive plans to expand the software development capacity of the firm, add services around payment types, and make more of an effort in communicating the strategy to the wider financial world.
"In some way’s we’re Europe’s best kept secret," he notes ruefully. His success will partly be measured on whether that remains the case.
Consolidated crush
Despite IT’s thirst for the digital, the payments industry has in some ways been torn apart by the plethora of payment options, with contactless cards, services like PayPal and the rise of cryptocurrencies all forcing retailers to invest in more technologies to enable these payments.
That fragmentation is where Black believes firms like PPRO will thrive. "For us it doesn’t matter how that [payment] card gets used, it’s just another vehicle that we have to factor in."
The problem is that splintering in the market is sure to create pressure for firms to consolidate, which may put pressure on payments aggregators. "There will be consolidation, but even the consolidated won’t be able to provide the payment," Black says. "There will still be a market for PPRO’s services."
In this way the company is at the heart of a shifting, turbulent industry, and may well act as a marker for how the market changes over the next few years.
As Black puts it: "I think what really differentiates us is our focus on aggregating those payment types and providing the services around it." We will soon find out if such a difference matters.
