06 2019 | INSIDE
"paysafecard products become more important the more that merchants want to operate globally."
SHORTLY AFTER THE ESTABLISHMENT OF PAYSAFECARD IN 2000, YOU INITIALLY JUST WANTED TO HELP YOUR BROTHER, INCLUDING IN THE AREA OF SALES. WHAT LESSONS HAVE YOU TAKEN FROM THAT PERIOD?
That it is not just a matter of selling our services and products, but also finding a solution for our merchant partners which really helps them develop. I recognised that it makes much more sense to explore jointly which service most benefits our partners in their business. paysafecard is designed to help everyone make secure online purchases. In particular, those people who do not have a bank account or a credit card. This vision has been the unbroken theme throughout the company's history. It distinguishes us from other payment services providers and right now, offers our merchants enormous potential for growth across the globe.
DESPITE THIS VERY POWERFUL USP, IN 2003 PAYSAFECARD RAN INTO A CRISIS FOR THE FIRST TIME. WHY?
In short: many companies who could have been our partners suddenly ceased to exist after the internet bubble burst. And our costs had grown faster than our turnover. So in 2003, we faced a decisive choice. How could we carry on? So the co-founders, Michi Altrichter, my brother Michael Müller and I, then laid down a joint strategy: We still believe in the product, but we need to focus, set ourselves smaller goals and shrink the Business.
SO YOU CONTINUED TO BELIEVE IN YOUR VISION. HOW WERE YOU ABLE TO CONVINCE YOUR INVESTORS?
With bare figures. The growth had happened, after all. We just had excessive costs. It was the wrong strategy for that period. So we changed it: downsizing, focusing on the core markets Austria and Germany. In that way, we had sufficient financing for three years and enough time to grow healthily and show the investors that break-even was possible. The monthly figures were then fixed numbers – not visions any longer.
SALVATION THROUGH REALISM, SO TO SPEAK?
At the start, in 2000, the grand vision was important in order to get everything going. Three years later, we needed to look at cost efficiency. Today, I can say that as a company we have been through every possible phase: from euphoric foundation to near-insolvency to break-even, great growth, sale and stock market listing. Each phase has different challenges – one always needs to do the right thing at the right time. (Laughs.)
WHICH OF THESE CRITICAL CHANGES OF DIRECTION SEEMS PARTICULARLY RELEVANT FOR YOU IN RETROSPECT?
A good many. I think, for example, that due to the current challenges arising from the Payment Service Directive, it was very important that we already started in 2013 in 22 countries with the personal online payment account "my paysafecard". That helps us and our merchants very significantly today in working with Strong Customer Authentication. However, what was much more important was the country launches in the last few years. Peru, Uruguay, New Zealand, Kuwait, the United Arab Emirates, Brazil and perhaps soon India: we have expanded into all these markets in just six years. A really great team Performance!
IT IS NOTICEABLE THAT THIS INCLUDES A FOCUS ON LATIN AMERICA AND THE COUNTRIES OF THE MIDDLE AND NEAR EAST. WHY?
Because we rate the growth potential for merchants there particularly high. Both of these regions are only just discovering e-commerce and therefore offer especially international merchants significant growth potential. In order to succeed in these markets, however, the payment methods at the checkout need to be adjusted to local consumers. In Brazil, for instance, cash still plays a major role for large parts of the population and in Kuwait not even 20% of the population have a credit card. paysafecard offers the solution for these challenges.
DOES THIS ALSO MEAN THAT YOU WANT TO HELP MERCHANT PARTNERS TO MAKE THEIR BUSINESS AND MONETISATION MODELS EVEN MORE GLOBAL?
I think in general that the variety of online payment methods offered will become more important the more that merchants want to act globally. Every world region and every country has different preferences and traditions in this respect. In some countries, banking is not yet that widespread, or parts of the population simply cannot afford an account. But even in wealthy countries like Germany, consumers traditionally have a strong connection to payments in cash.
IS THIS GREAT VARIETY OF CONSUMERS AND MARKETS ALSO THE REASON FOR NEW PRODUCT DEVELOPMENTS?
Absolutely. We want to have the best payment method in our portfolio for every consumer group and every market. This is why, for example, since last year we have had Paysafecash, a new alternative cash-based payment method. It enables online shoppers to generate a barcode and to settle pending invoice amounts in cash at their nearest payment point. We have already been very successful with this in several European countries.
»We want to have the best payment method in our portfolio for every consumer group and every market.«
Udo Müller, CEO paysafecard
YOU JUST REFERRED TO "WE". PAYSAFECARD IS NOW PART OF THE PAYSAFE GROUP. WHAT EFFECT DOES THAT HAVE ON YOUR STRATEGY?
It underlines our claim to be one of the most important building blocks of a one-stop shop for merchant payment processing. Through its size, Paysafe can offer a unique payment suite covering all existing payment options. For merchants, that means that they never again need to worry about whether they have the right payment option in the checkout process for a particular market. I am proud that paysafecard is an important part of this all-in-one solution.
SO CAN MERCHANTS IN FUTURE ONLY USE PAYSAFECARD AS PART OF THE PAYSAFE PAYMENTS SUITE?
Of course not. We are continuing to work intensively with individual merchants. A particularly groundbreaking current development is the partnership with Google in the context of the Play Store. The cooperation with Google started very successfully last year in Poland. paysafecard is now a very promising new payment method in 10 European countries for Google's target group of young gamers and millennials. I actually think this is one of the most important steps in our corporate history up to now. It shows how strong we are when it comes to young target groups and how secure paysafecard is, in particular for payments via Smartphone.
THE PLAY STORE APPEALS TO YOUNG GAMERS IN PARTICULAR. A TARGET GROUP THAT PAYSAFECARD HAS KNOWN WELL FOR A LONG TIME...
That's right, paysafecard has been supporting this community from the start. That's why we have also been present since last year as the main sponsor of the European Sports League at all the ESL flagship events. esports is constantly growing and young gamers in particular, are of enormous interest to our merchants – not just those who are active in esports. This young target group discovers the advantages of paysafecard at an early age and continues to use it in other business sectors later.
SO YOU THINK THAT PAYSAFECARD WILL REMAIN RELEVANT IN GLOBAL REGIONS SUCH AS EUROPE AND THE USA?
Naturally. There are verticals like online betting and esports where we are particularly strong. But that is not the point. The key aspect is that merchants can offer their clients the greatest possible variety of payment options. This becomes increasingly important as merchants operate more globally. That is why paysafecard will expand to even more additional markets. Because we want to extend the paysafecard success story with many more chapters, in partnership with our merchants.
THANK YOU VERY MUCH FOR THE INTERVIEW, MR MÜLLER!