As an economic winter looms, Payment Expert sat down with Vishal Dalal, the international CEO of Pismo, to discuss how fintechs can survive, as well what payment trends will be at the forefront for the year ahead.
Payment Expert: Firstly, are you able to tell us more about Pismo and your role in the payments ecosystem?
Vishal Dalal: Pismo is an all-in-one, public cloud-native financial services platform covering all core banking and payment processing functionalities. Pismo has the widest product coverage of any of the players in this specific area and does everything related to cards, banking, current accounts, savings accounts, and more recently lending and corporate banking.
Pismo provides next-generation technology to help banks, fintechs, and non-financial institutions offer best-in-class financial products for their global customers. Pismo’s platform processes more than 70 million accounts at this point- and the number continues to grow every week.
Besides that, our breadth of experience is a key characteristic– from getting a fintech online in 3-4 weeks, down to working with a Fortune 500 bank and migrating their accounts from legacy onto the cloud – that’s a high bar to achieve and I’m incredibly proud of how far we have come.
PE: How can cloud-native solutions be crucial in bolstering the payments space, especially during a time of economic crisis?
VD: In financial services, innovation can almost be divided into the PC (Pre-Cloud) and PoC (Post Cloud) eras, as the public cloud has had such a profound impact on innovation. The reason for that is simple – anyone with a clever idea and a credit card can spin up a system and test out the idea.
The high entry barriers, because of the cost of hardware and space and cybersec etc, have all vanished in one fell swoop. And because most innovation is happening on the public cloud, most code logically will and should be written in a cloud-native way. It is not too much of a stretch to say the cloud has completely revolutionised the payments space. You increasingly see payment processors only processing on the public cloud.
Card networks offer connectivity on the public cloud instead of physical endpoints. Fintechs use cloud-native processors to quickly spin up a payments product in a period of a couple of months. The sky is now the limit, all because of the public cloud.
PE: What do you believe fintechs can do in order to survive the tough economic period?
VD: We live in interesting times – and given the interest rate and inflation environment, fintechs will need to adapt like the rest of the corporate world. Only the fit will survive. In this environment, being fit means having a healthy cash flow.
Survival, therefore, includes doing the back-to-the-basics textbook stuff well like conserving cash as if your life depended on it, tracking each dollar rigorously to see how much value you’re getting out of it and managing your operating well.
While this doesn’t mean that product building/innovation or capital investment has to stop, each of these investments above a certain value now needs to go through the discipline of building an individual business case.
Like everything else, this is a hard habit to get used to, but an invaluable one, once you get accustomed to it.
PE: Are there steps that fintechs can take to continue growth, even as transactions decline?
VD: There are certain steps that fintechs can take to continue growing in the absence of reduced transactions (both organic and inorganic).
The first one obviously is to concentrate on the problem they solve best and reduce friction (and improve the customer experience) for the customer in any step of the payments value chain.
The second is to get really really good at telling their story and why it matters. In spite of all the headwinds, there is still plenty of money chasing the right idea.
The third is to start learning how to tighten belts and to distinguish what is core and what are “bells and whistles”. Now more than ever, all the basics matter (customer, strategy, target markets, etc.)
PE: Can you tell us more about what you believe the major trends will be within fintech and payments?
The major trends that we foresee are:
(a) Countries will concentrate on developing their own independent payment rails infrastructure and get better at it.
(b) As scalability starts mattering more and more, there will be heightened movement of processing to the public cloud.
(c) Countries and central banks will try and bring the costs of transactions down for their citizens and therefore spend effort in trying to develop digital currencies that match their own specific needs. This will increase experimentation in this area.