OpenPayd has been developing and growing as one of the leading payment infrastructure companies over the past several years, cemented after achieving 100% growth in its most recent yearly report. 

With a myriad of emerging technologies set to transform the financial and payments landscape for years to come, how will companies like OpenPayd look to adopt and integrate these innovations in a secure and timely manner? 

To gain further insight, Payment Expert sat down with the company’s Head of Payment Infrastructure, Barry O’Sullivan at the recent Money 20/20 Europe event, to speak on AI, blockchain, instant payments and more future payment innovations. 

Firstly Barry, you wrote for Payment Expert earlier in the year on AI being a key trend for 2024 in being able to aid risk management. Have any developments in this field progressed, and are payment companies well equipped to tackle this inevitable growing threat?

One of the challenges or the fears that people have around the use of AI systems is that others may access their data. When using AI systems, we’re dealing with a lot of sensitive data, and this is now being regulated to make sure that data is protected and stored in the right place. 

Understandably, there is a nervousness around open AI where potentially things might not be so secure. For us at OpenPayd, we have been looking at this throughout the year and the various use cases for different departments across the organisation. A factor that we are exploring is looking at something that’s more closed loop in terms of internal machine learning or finding a way to alleviate fear of using an open source.

However, there are several different elements to be considered when looking to implement AI across a business. For example, compliance, risk and legal needs will probably look very different to the needs of the banking division. It’s about finding solutions that work for every department. 

This is a process we are not looking to rush. We will be seeing what’s the most important part of our business in which AI will have the biggest impact, and then how can we address implementation challenges as we go across the various departments.

AI and blockchain are some of the more prominent emerging technologies right now, but what is another that the industry is not focusing on that will surge in usage and popularity over the next few years? 

Our key focus at the moment is building out the core infrastructure for banking rails. Whether that’s looking at the local payment options or local banking, but blockchain is one of the areas that we are assessing as well for payments, especially when it comes to cross-border. 

The problem that blockchain or digital asset payments solve is more on the international side. If we’re making global payouts for our customers, that might take three-to-five days to land, clear, settle, looking at the rails where we can then supply locally is key. Whether it’s blockchain technology or digital assets in between, we can then do the last mile locally, which is obviously a big use case for freeing up that time, but also when we’re looking at potential liquidity. 

If we’re building out a global network of bank partners, typically, you want to do a payment fast, and so you need to make sure there’s money available to do it. This then creates a problem, in which there are several banks around the world where you’re holding lots of liquidity to service customers. 

Blockchain can solve these issues. For example, there are companies that are offering liquidity on demand, where you don’t have to have an account on the other side that has funds in it. We can then make a payment instantly and then pay out.

At the moment, my focus is looking at those types of technologies, but also building out the traditional models as well. We need to remain agnostic to the market. Whilst blockchain is a growing opportunity, it’s always going to be part of something we do until it becomes so big that actually nothing else exists apart from it. 

If we look back five or ten years ago and you start speaking to people about blockchain payments or digital assets, no one would have known what you’re talking about. From where we are now, looking at the next five years, it’s quite hard to tell what new looks like, because I think we’re still in the era of ‘new’ for certain technologies. 

I don’t know if in the next five years the things that exist today will remain. There will certainly be innovations and new technologies, services and solutions that haven’t even been thought about yet. This is exciting because customers, especially the generations below, are always looking for new and innovative ways of living. 

We’re in a time where new technologies are arising all the time, but personally, for now I am focused on new ways in which we can leverage and make the most of existing technologies. 

Instant payments are becoming a focal point now in terms of speeding up the settlement and transaction process – has there been more of a realisation from firms such as yourselves that instant payments are here? 

We’ve been looking at instant solutions for a very long time. For us, we’re providing the infrastructure for a corporation to have access to that, to then provide it to their customers. That need has always been there for an instant experience. 

If you’ve got a very large trading platform that might be selling stocks, shares or something happens in the market and you want the customers to go on it and then trade, but you can’t get that solution instant, customers will go somewhere else where they can make that transaction. 

For us at OpenPayd, the focus on instant experiences is growing. We’re building solutions in which we can make and take payments in any currency, any country, instantly. That for us is the future, and now, we’re working to achieve this.

I know yourself and OpenPayd have been speaking on a Payments Nirvana in recent years, this multifaceted culmination of all payment infrastructure’s, is this unattainable? 

I wouldn’t say unattainable because it doesn’t exist. Not every country has an instant scheme. If you settled in a stablecoin and someone had a wallet, you could do that. But if you’re looking to offer local currencies to people, there’s about 80 different countries around the world now that have a local infrastructure for instant settlement. 

It exists in a form of having to pull in lots and lots of different things, lots of different financial services and lots of different infrastructures to be able to deliver that. That’s why we can’t focus just on one, it has to be that we’re pulling away. 

If a company says, ‘I want to take money from my customers by card, but then I’ve also got to payout people in bank transfers’, while only offering one rail, it just wouldn’t work.

If they can come in and say, ‘Actually, I can take that part for one leg of the journey and use blockchain infrastructure or traditional payout from banks and by combining all these parts together’, then I’ve got a solution to bring to my customers that will just more attractive to users. This will increase user adoption because the way to get them to come in is so slick. 

Is regulation hindering payments? Have you been keeping an eye on PSD3. Is there anything that you think may hinder any of these innovative payment schemes that are coming ahead?

We’re always looking at regulation in certain countries and markets we’re in, such as PSD3, and others, and how they’re going to interact or how they’re going to impact what we might be doing. I guess with PSD3, they’re encouraging more of an open landscape. 

It’s hard to see without it being in full force. If you’re looking at what’s coming up, it should be more accessible for financial services companies to access markets. Beforehand, access was only available for credit institutions for example. With new regulations coming in, it’s giving more of that market to the financial services, which should drive growth. 

Regulation and compliance around protecting end users, as long as it’s done right, will encourage growth. I think if it goes the other way, it can have an impact on innovative technologies coming in for fear of not meeting regulatory standards. That’s why we’re always making sure that we are on it and keeping up with the regulations.

I know a lot of people have called for more emphasis on Open Banking guidelines when it pertains to PSD3. Is this something you share?

It’s a tough one, especially in Europe, because in the UK we have Open Banking. All the banks are available. When you go into, let’s say, Europe, it’s country by country. 

If you want to have Open Banking in Italy versus Open Banking in Spain, it’s very different to the way that it’s structured, very different to how the end user would engage in that process.

Lastly, Barry. OpenPayd turned over 100% growth recently. How important is this for the future of the growth of the company in terms of your payment aspects? What would you credit this success to?

I think we’ve done very well in the verticals that we’re very good at. e haven’t tried to go out to lots of markets around the world or many different verticals.

We’ve focused, particularly in the last three years with the economic downturn,in being extremely good at the client base that we service. Whether it’s digital asset companies, whether it’s trading platforms, whether it is marketplaces, whether it is other financial institutions, and we’ve not deviated from the plan. 

That has led to success in bringing on much larger customers within those verticals. It’s then led to the bigger clients coming to us to say we know how good you guys are in the market and our volumes have increased through those markets, rather than trying to be all to everybody. For me, I think that’s been the driver for us to accelerate and I don’t see that changing.

Now we can start looking at new verticals. We’ve got our core foundations and we’re already seeing companies coming to us that are in completely different markets where we are saying we’ve seen you in the market, we know how good you are. We have the foundations to fit anywhere.