Payments as-a-Service is, therefore, rapidly becoming the option of choice for cost-effectiveness and go-to-market speed for banks around the world.
Why? “Bespoke payment technology stacks struggle to accommodate dynamic regulatory and technology updates and increased competition from new players entering the market,” says Nicki Bisgaard, CEO of card payment specialist EedenBull.
“Business-to-business payments are no exception; they are just more complex and require more advanced processing at the back end, more specialist expertise and more sophisticated user tools at the front end.”
Banks have also been known to focus more on servicing consumers, which in many instances has meant banks have lagged behind on the commercial payments side - but EedenBull’s leaders say things are changing.
“As a consumer, you can do so much with your bank accounts; business owners are lucky to get more than a card,” says co-founder and chief technology officer Andy Veitch.
“Business owners want the same as consumers - to reduce paperwork and to do things smartly in a mobile and online world. They want everything in front of them in a simple format, to be able to plan ahead.”
Bisgaard sums it up like this: “Banks lack the scale, resources, budget and expertise to access the systems and platforms to take the next step in terms of card and commercial payments. That’s where we can help. We have now launched a full end-to-end solution for banks. We’ve called it Commercial Payments as-a-Service, or CPaaS for short.”
Veitch describes CPaaS as “a cloud-native environment with a set of highly specialised commercial payments products and services configured and delivered to the banks’ commercial banking customers”. He continues: “This significantly reduces the implementation timeline and budget whilst enabling banks to stay relevant and competitive.’
“There is not a single bank which doesn’t want to improve performance in commercial cards and payments. We help them deal with commercial banking customers and new technology.
“We’re all about making payments more efficient, more flexible and more secure - and improving the way businesses pay and get paid. Who doesn’t want that?”
More than 60 banks, most in Scandinavia, clearly do - as they already work with EedenBull.
Veitch says the relationship with banks is about more than a tweak to business as usual.
“We aren’t just here to help them digitise systems they already have,” he explains. “We created a digital product from scratch and want the banks to think that way; it’s a new approach, not just an add-on. We can show banks straight away how to help business customers, how to ensure they are still relevant to them.”
EedenBull says its approach can improve banks’ offering to customers in many ways - process efficiency, policy compliance, improved cash flow and automation - and increased profitability.
“Banks are realising business-to-business payments are worth 12-15 times more than the consumer market,” says Bisgaard. “It’s a hell of a lot more and there’s a gradual awakening to that.”
Another reason to move quickly is the increasing interest of tech giants in getting their hands on the valuable data created by financial transactions.
“There's a lot of competition from the tech world and commercial banking is huge,” says Veitch. “If you can do this right, it's a big growth area.
“We are not a challenger to banks, we are just helping them to do the smart stuff - the real challengers are the big tech firms.”
Bisgaard says there are three significant battlefields in cards and commercial payments: providing profitable products and services; winning the fight for the user interface; and data.
“The future user interface might be your bank, or Apple, Amazon or Google,” he says. “But by the far the most important battle is for data. Banks face a huge challenge as new players enter the payment space - not for the sake of payments, but data.
“It’s all about access to transactional and behavioural data, and the ability to commercialise it. Banks have data coming out of their ears, however they aren’t good at commercialising it and building services on the back of it. We provide the ability to make good use of the data, with benefits for commercial customers and the banks themselves.”
EedenBull benefits from the fact that many staff have deep experience in commercial payments. “Banks know us and we know them and that’s a major competitive advantage,” says Bisgaard. “We are known and trusted from the outset.
“What we do, successfully, is combine deep payments expertise and experience with fantastic tech talent.”
EedenBull currently has around 30 staff in Edinburgh, Singapore, Oslo and London, but has huge ambition for growth. By 2024, it wants to be working in 10 different global markets, employing more than 100 people, working with 150+ partner banks and having close to 1.5 million end user accounts.
But it’s about much more than the numbers, stresses Bisgaard: “EedenBull is 2 or 3 years old and in business terms, we are moving from infancy into young adulthood.
“We're rapidly growing and expanding and want to do new things, to innovate with new players and new partners - and suddenly find ourselves competing with major players in commercial payments and beating some of them.
“That does something to you; it is scary as hell, but it's also intoxicating.
“We have real ambition. We want to launch in three new markets and sign up 12 new banks in 2021 - but it's more about what it does to us as an organism. I think we will see a lot of X-ray energy released at EedenBull in 2021.”