PXP Financial has recently revealed that it is embarking onto expansion into new markets as it seeks to utilise its experience within the European market to grow its global portfolio.
Just last month, Payment Expert sat down with the Financial’s Group CEO, Koen Vanpraet, to discuss how the company can transcend its principles and innovations from the gaming sector into other industries, as well why the firm is well positioned to expand into the US.
Underlining the changes in the sector in recent years, he stated: “There have been many, many changes within the payments and financial sector in the past year. We had the whole regulatory changes in the gaming space, like countries and jurisdictions changing their laws and altering their entry requirements.
“We obviously had Brexit and how payment companies dealt with this. We also had PSD2 which involved the implementation of strong authentication, new technology in terms of compliance and KYC, so I think the sector has experienced a lot of changes but all for the better.”
He also revealed how the company is positioning itself for its recently announced US expansion, emphasising: “We started this process back in 2019, with the whole concept of PXP Financial being that we are deep and narrow, we stay very close to our clients.
“Whatever we develop, whether it be a product or a service, it’s a follow-your-client type principle. It’s a difficult word to use in terms of business, we call it client intimacy, but if you understand what we are saying, it is very powerful. The way we developed the company is by sitting down with our clients and understanding what they want and the US expansion came as a result of this. The move came off the back of two existing clients, who also grew into the US.
“We have a longstanding relationship with them in Europe, so we sat down with them and put in place a roadmap for expansion into the US. We started developing it in December 2019 and we are now (February) live in New Jersey, so specifically for the gaming industry, West Virginia and we plan on going live in a further nine states in the coming future.
“Initially with our clients, it will be specifically for gaming, but also off the back of that, we will be able to grow our services into other sectors within the region, whether it be the travel or the retail industry, our capabilities will be able to transcend us into other regions.”
Detailing how techniques, innovations and principles for payments in the gambling sector transcend into other industries, he emphasised: “What we see is that with the gaming industry, we don’t regard it as a high risk industry unlike many other institutions. The reason for that is the definition of high risk. People mostly talk about reputation risk when they define high risk, but I think that as a financial institution, you need to look at underlying financial risk.
“For us, the gaming industry clients we do business with are not considered high risk as they are very well managed, the way they manage security, anti-fraud services, data analytics and stability of the platforms and what we see as well, because of the nature of the industry, typically it is a year or two ahead of any other.”
“If you take the retail or travel industry, often they are just behind in terms of technological developments that are happening in the gaming industry. For us, it’s really beneficial that the original DNA of our company was gaming, but we have evolved into other markets. But, the core, culture and capabilities that we have are around data analysis.”
Further commenting on the importance of preparation for expansion after Brexit and the importance of the situation finally being resolved, he added: “I think the entire industry, not just the payment or gaming industry, but a lot of industries were caught in a hostage situation with the process dragging on for so long. I think in the end that it will have cost a lot of companies a lot of money across the board.
“I think that now we have an outcome and there is a plan to come to a trade resolution by the end of 2020, at least companies will have a kind of forward look to anticipate that.
“There is fallout, clearly on both sides. Businesses will have moved and there will still be a little bit of unknown, like in our space, again from licensed financial institutions will we still be able to passport or not? These are pending questions.”
He continued: “We are fully prepared for it. We have a backup situation that went live three months ago, so whatever happens, I think we are prepared for it. Let’s just hope the government makes the right decisions to make it as smooth as possible, because in the end everybody wants to do business.”
Commenting on whether London can maintain its status as a financial hub following Brexit, he added: “Honestly, I think there were horror stories about less employment and jobs moving to Frankfurt and other financial hubs throughout Europe. But I think that will balance itself back to normal.
“Once again, we go beyond the lack of clarity and decisions that are being made. London will reside as a very important financial hub. Yes, other countries might grow a little bit more into it, there will be healthy competitions between countries, but you don’t take that away.”