← Fintech Insider Podcast by 11:FS
Fintech Insider Podcast by 11:FS
1016. Insights: Is agentic commerce the future of payments? Live from Paris with J.P. Morgan
00:52:49
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- [00:00]
A
Foreign. Hello and welcome to FinTech Insider Insights live from JP Morgan's roadshow here in Paris. My name is David Brea. I'm the Group CEO at ElevenFS. And today, in partnership with JP Morgan, we're going to be exploring how payments are being reimagined not just at the checkout, but across the entirety of the financial stack. Commerce is no longer something we do. It's something that just happens often silently and often even without us really noticing. Welcome to the age of agentic commerce. From the frictionless frontiers of E commerce to the precision and pressure of corporate treasury, we're mapping the modern payments journey. One shaped increasingly by automation, intelligence and and user intent. We're going to be unpacking what agentic e commerce actually is, what it means in practice, and the evolving cart to code setups around many businesses all around the world. We're also going to be taking a little bit of a look about how regulatory shifts across the entirety of the EU are really rewriting the rules for builders and banks alike. We'll also look to explore the enduring complexity of cross border payments and the innovators working to make movement and seamless as intended to be. We're going to be charting how the payments experience is no longer just about speed of cost, but context, control and connection. That was a really long intro, wasn't it? We should probably get into it. I'm joined as always, by a really great group of people. And as we're in the city of love and talking to you guys before, people are very passionate about of these things that we're going to be going about. So first up, We've got a FinTech Insider debut for Ludvik Ury, who is the managing director, head of merchant services, Emir Apac and Global for large accounts at J.P. morgan. Your cards must be like six feet tall. Like do you have to fold them to get them in your pocket?
- [02:11]
B
We don't do cards anymore.
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A
Fine.
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B
Okay. So it's digital.
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A
Yeah, yeah, it's very true.
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B
Digital and green.
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A
Very good. How are you doing?
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B
Good, thank you for having me.
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A
Yeah.
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B
After the intro you've made, I don't know what else can I add?
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A
Yeah, we covered a lot of ground there quickly, didn't we? But for the audience, tell us a little bit more about your role at J.P. morgan.
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B
Sure. Well, as you said, I'm in charge of the merchant services business at J.P. morgan, which means in a way to allow merchants to accept means of payments, in particular cards. We are specialized in cards and I run this business in Europe and in apac and you had the full title, so I have to mention it. I'm also in charge of the relationship management of the large key accounts we've got in the world.
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A
I feel like a man with many air miles, potentially. As an ex consultant, I can share your pain of extensive knowledge of taxi trips to hotels or airport lounges.
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B
And what I can add is that I've been doing this job for JP Morgan for three years now, but I've been in this industry for close to 30 years.
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A
Wow. I mean, even in the last three years the change is quite phenomenal, isn't it?
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B
But a lot has changed.
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A
We'll touch on that as we get into it then. Okay, next up We've got another FinTech Insider debut. We've got Lorraine Leconte, is that right? Director of Global Payments, Risk and Fraud at Buck Market. How are you doing?
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C
I'm fine, thanks.
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A
We're sitting in your super duper office as well. Like very, very cool space. I have to say I'm very jealous. I hear there's lot of sort of secret rooms and different things.
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C
Yeah, it's a speakeasy office and there is a speakeasy nightclub downstairs.
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A
Well, there's a promise. So I feel like we know what we're doing directly after this then. Right, but for anybody who doesn't know, tell us a little bit about the business, tell us a little bit about your role.
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C
So Back Market is a pure player marketplace that specializes in refurbished devices. So it means that we are the intermediary between professional refurbishers and consumers. We are having B2C, C2B and B2B activity. However, the vast majority of our transactions are B2C. It was created in 2014, so a bit more than 10 years ago in France by French people in Paris. And now we are in 17 countries. And I started to work for black market at the very early stage and I grew up basically with the company. My team grew, I learned a lot about international expansion and new services both for consumers and sellers. And it's tremendous time to be in payment at the moment because there is a shift of industry, especially for marketplaces around AI. So really happy to go through it today.
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A
Well done. Great to grow up with the business. I've been running 11Fs for 10 years and I've been resisting growing up as well. So it's, you know, I figure if you could avoid that for as long as possible, it's good to do, isn't it? But so last and by no means least, we've got Lidi Convair. Yeah. Head of cash management at Blah Blah Car. How are you doing?
- [05:34]
D
Fine, thanks.
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A
Tell us a little bit more about Blablacar and your role.
- [05:39]
D
Okay. Blablacar is the leading carpooling platform and we operate also bus season trains. And my role is I oversee all global liquidity and payment for all markets. It's about 22 countries now and that's only one year and a half. But before I was in digital market also with Diesel, you know, the streaming platform. And after, so I was in industrial and boring company.
- [06:14]
A
Yeah, we've all had one of those, haven't we? Well done for not naming them. That was good. But that's, that's awesome. Well, great, great panel with great experience to sort of dive into all of these different things. I guess, you know, it's on the tip of everybody's tongue any conference you go to. I've just come from Web Summit. I think it was like 49,000 people talking about AI basically. What do we think it is? What actually is it? Because it's such a broad church of subject matter that people seem to use it interchangeably for discussing a back office risk change to a front office customer experience improvement. So do you want to start us off with this one? What's an AI? What's agentic? What does it do?
- [06:57]
B
So AI specifically the first thing is exactly what you say. Cheaper, faster, more accurate to solve things that are not necessarily very interesting, like in operational stuff, in replacing things that are extremely manual or improving the efficiency of fighting fraud, for example. But indeed the evolution now in our world, the buzzword is around agency commerce. I knew you would ask the question and I've been thinking, what is the best way to kick off this, this conversation on agentic commerce? And I think we need to say first of all that we've got two giants that have got a very strong position in search and they are thinking how can I monetize commerce while people come through me to look for product? So that's one starting point. The other starting point is the merchants, the marketplaces, how will they be part of this? How will that work? And that's this ecosystem that needs to be built. And recently what we have seen is our moves from both OpenAI and Google to try to start a standardization of agent E commerce in light of protocols, catalogs, payments. And basically everybody now is assessing, analyzing, how do I play with this? And just to complete this first part, because I'm sure that we, my colleagues have other things to do. What is it is not today. It is not today the ability of an agent to go and buy for you a hundred percent without you knowing. We are not yet there by far.
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A
Yeah, it's a shame because that would be nice, right? If it could do my, if it could do my weekly shop, that would be awesome. But maybe, maybe like you say, we're sort of hurtling towards that reality. What do you think? I mean, how do you use AI on a day to day basis? Is it something, is it sort of landed on your home screen, on your phone already or is it far off from that?
- [09:33]
C
I'm super in line with what Ludovic said. Basically AI is a buzzword today, but we have been using AI for years now. It's just some kind of advanced machine learning, right? We have been using it for smart routing, for fraud management, et cetera. But the very big difference is LLMs. So basically ChatGPT&CO and we are using Genai today at back market for enhancing productivity. There are a lot of things like defending chargebacks for instance, that can be done thanks to agents. But also it goes way further in terms of fraud management. One example is that we are using Genai to compare some after sales messages from clients and if we see the same message from an Italian guy in Roma and a French guy in Lille or whatever and we just translate and we see that it's just exactly the same message, basically this is just one ring of fraudsters and it's really a key differentiator compared to a few years ago. And now as Ludovic said, we are definitely looking at agentic AI because it can disintermediate us if we don't surf the wave. So it's both an opportunity for black market to be pioneer of this new kind of transactions and that as well, we can miss some businesses if we are not there yet.
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A
Yeah, yeah, it's interesting that that point on changing commerce, you know, for, for a whole generation, you know, you run to Google, you type the thing in, you get search engine results pages, you, you know, that's where you, you know, ads are served and you can engage with it, right? And you know, the battle around search engine optimization and all of those things, it's, it's kind of like a known. Known, right? But in a, a world where people are using, you know, OpenAI as their interface to actually the ability to sort of find new customers, engage with them, it's a different battleground, isn't it? You know, but I guess, you know, digital in the first days was how do we take people, how do we take paper, how do we take, you know, buildings out of the process? So it's sort of a similar battle, but shifting battleground to a certain degree. Right.
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B
But it's. I'm really in agreement with what Lauren just said.
- [12:07]
A
That's good because you sat next to each other. It'd be real awkward if not.
- [12:10]
B
But it's very important to understand that if marketplaces or merchants don't embrace the way it's going to be designed, the search engine or the agent will not go to them, will not provide the consumer this opportunity. And this is really a potential shift of the commerce.
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A
Yeah, it's weird, isn't it? I mean traditionally product manufacturing, product distribution, you know, actually it's an intermediary for distribution or access to consumers, isn't it?
- [12:44]
B
By the way, we would like to help the ecosystem to play in a fair and agnostic way. We think it's very important not only we are going to provide solutions so the marketplaces and the merchants can path in an agnostic way to retain the payment and the role of merchant of record or marketplace of record that they've got today, but also the way the catalog is positioned. We think we are going to be in the middle of commerce. I think we are going to be able to build a lot of experience and share it as much as we can.
- [13:25]
C
But here you're talking about enhancing customer experience. And for sure there is some tremendous challenges here. But I also want to emphasize the fact that it will definitely change our fraud management because today we are using data to see how people navigate through our website, how long they are staying on one page, are they copy, pasting some kind of data, et cetera. With agents, we don't know yet what will be the behaviors, we don't know yet what will be the API, the protocols. And also we must remember that fraudsters are going to use agents as well.
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A
To pretty innovative fraudsters, don't they?
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C
Yeah. So it will be kind of a machine against machine word in that sense in terms of fraud management. And we really have to secure and think about the fraud aspects very much so. When you're Talking about how G.P. morgan can help merchants and the industry in that sense, fraud management is absolutely key here.
- [14:36]
A
How about you? Is sort of agentic AI touching your day to day life at this stage? Is it something that you're personally engaging with or from a professional perspective?
- [14:47]
D
Yeah, about AI we use in treasury because there is a lot of impact. We talk often about automation, but I prefer to speak about new Decision layer, the capacity of AI to manage data support us to make easier, faster all our manual tasks and AI can just help us to make more proactive decision. So that's a point. And for agent Kronos not exist yet for Blueblacker, but it's a process. Okay. And if we believe McKinsey, it will be half of B2C transaction in 2030. So it's key to be on it. But it's very important to not lose compliance, trustability and all your stuff to control.
- [15:43]
A
Don't trust management consultants. They always put out big numbers just to make people do stuff. But yeah, take your point. But I mean it's interesting, isn't it? We're sort of circling around. You know, commerce has been around forever. I mean people have been exchanging like pebbles for stuff, you know, like, or cows, whatever, you know, like. So there's a, there's a sort of a inherent trust that needs to be in all of these systems in order to, for them to be accepted. But like how do we, how do we manifest that in this world when the way in which we're engaging with the people that we're trying to, you know, procure things from a very different. Like how do you sort of main trust in this, this world?
- [16:23]
B
No, I think it's unknown today how the catalogs can be built in a way to be still in control of the action of selling. However, it will be known very soon and very soon we will have to, I mean they will have to have the technology in place so when the searches of agents are going to start playing get action already and called upon as a possibility, as a potential product or service to be sold. We have seen already some protocols issued by Google and OpenAI. I think you will see some perks in the coming months, probably in Q1. I would not be surprised if there is a ramp up of pilots in Europe, in America where companies will be able to assess the role they play and will be there to support them.
- [17:33]
C
Yeah, I just wanted to give one use case so that it makes things maybe easier. So basically if David wants to buy a MacBook Pro, he will tell his agent, okay, I want to buy a MacBook Pro in the next two days at £600 and I want to have it delivered at my place in less than one day. And so you will have specific data that will be in the protocol and basically the agent can run through. I think the right word is crawl. Will crawl a lot of websites and it will at a specific time when the price of one MacBook goes down to 600 pounds, then the transaction is initiated. So it can be initiated at any time of the day, during the night, et cetera. So from my understanding, that's where we.
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B
Are doing this will work if your catalog is addressing exactly to the protocol, the agent is going to be searching and also the agent is going to look for catalogs where he knows that the payment protocol at the end of the will be matching.
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C
Yeah.
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B
If not, then it will not offer the solution.
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A
And that's really the point I was going to make, which is this sounds amazing. If I could, I do want a new laptop. Thank you, that would be great. But if something could go and do that for me and actually make sure that I was getting the best deal and exactly what I wanted 24 hours a day. That sounds amazing. You know, I mean like it's, it's like a stone's throw from having like a robot in my house dealing with all my things as well, you know, but, but I guess there's a, you know, AI is not a panacea, you know, it's not a, it's not a fix all for all of these things. Because you know, actually there's, there's pretty strict regulation around data. There's the need for really great straight through processes across all of these capabilities that we want to expose. So you know, not having those things in place and just slapping some AI on it isn't going to solve the problem, is it? So, so I guess, you know, data structuring, data regulation plays a probably a big part to play to get that right first. Yeah, yeah.
- [19:49]
D
You mean ISO 2022 for example.
- [19:53]
A
Yeah, but so many different regulations around data that, that govern how you can use it, how you can structure it, what you can engage with it, you know, so it's because actually at the point where you're, you're acting like a personal shopper for somebody in that confines, then the customers had to give you permissions to retain and use that information as well, right?
- [20:15]
D
Yes, to keep the traceability of consent, the clear user traceability, identity. That's the key point with identity commerce. So it's too technical for me to speak about the previous steps, but yes, we need to keep that for reconciliation. That's my scope and I hope so that yes, all the structured data and unique reference ID to trust, to reliable, to make some, every transaction is easily traceable in our system. It's a real change for our company for a Tresois perspective. It makes some reconciliation become fully almost automatic and I count about AI to Learn patterns and to solve exception. So yeah, the reason why I think the switch with this kind of structured data is to move also how my job about the past to move from end of the day cache visibility to intraday cache control and to make more active on a day, day to day basis. Yeah that's a whole point that to move from execution orchestration, that's the big word for the coming months, coming years.
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A
Well that sort of, yeah, batch end of day batch structuring to a, you know, 24 7, 365 real time view of that is amazing. But you know, as I was saying about the straight through processing structuring of those things like you know these things are already in place to be able to expose it to enable that world as well. Right.
- [22:03]
B
You know it's important to say that the monetization system is not known today. The other thing to notice another angle. Visa and MasterCard who are going to create the rules for the banks at issuing level to create the credentials and the way to tokenize the transaction for the agent so that the agent at one point will be free. It does not exist yet. So this is still in the making. So right now we are driving into the zone where the catalog will be created. There will be a protocol for the transactions but the consumer still have the duty to decide yes I want to buy, no I don't want to buy. Yeah, there we are still in the, in this position. So for I don't know how long though a certain period of time there will be some kind of learning curve and control.
- [23:08]
A
I mean it's similar to cars, isn't it? You know, we've seen you know, cars that can park themselves and we were all really excited and now they're driving themselves, you know and it's like slowly but slowly things the technology advances and our trust in the system improve, don't they? So sorry, you're going to jump in.
- [23:24]
C
Yeah, I just want to insist on your last point. So basically today there are several types of transactions. There are the customer initiated transaction. So it's David buying a MacBook Pro. There are merchants.
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A
You're really keen on me buying that. I feel like you're on some sort of commission for Apple now, you know.
- [23:44]
C
Great website and merchant initiated transactions. So this is for any recurring type of business or tokenization as you mentioned. And there will be a new type which is agent initiated transactions. And here we don't know yet what will be the authentication of the customer. And coming back to your questions regarding data compliance, et cetera, today the law is different for customer initiated transaction and merchant initiated transaction in terms of 3Ds and all that stuff. So what will be the case for agent initiated transaction? We don't know yet. It's super blurry.
- [24:26]
A
Yeah, it's going to be super interesting, isn't it? You kind of think in the context of like payment initiation, all of the liabilities around who was liable in PSD2, you know what I mean? It's like we still haven't quite worked out all of that gray area, you know. So yeah, if suddenly your agent, which you might have many of looking out into different technologies in order to buy on your behalf, then is ultimately is it at you or is it them? And where does the risk say it's. It's. I feel like we're not going to get to the end of that question in this podcast because it's. It's quite a big one. But we covered a load of ground here, guys. Like, you know, from basically we're never going to talk to each other and all of our agents are going to be talking to each other to all of the sort of data restructuring. Anything stands out other than isn't technology scary or any questions that you have or comments that you have. Yeah, go on then, jump in.
- [25:21]
B
I think back to the point of physical shopping. It's not really a pains question, but rather that customer behavioral questions. Do we really think that we're going to be able to do the joy of shopping just like we lost the joy of driving? In a way, I think it's key of the memory experience and the ecommerce experience into it.
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A
Yeah.
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B
Do.
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A
What do you mean? As in like physically going into a place?
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B
I think for now it's just being and saying yes.
- [25:49]
A
Yeah. Do you. I mean, I. I haven't been in a shop for such a long period of time, if I'm honest with you. Like, I. I feel like I'm the prototype Amazon customer, you know, I mean, it's like the amount of recycling I'm doing of those brown boxes is just not good for the world, you know what I mean? But so I kind of feel like it's not that big a leap for me. But what do you guys think?
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C
What I can see is that today there are some markets where we need to open a store or a showroom so that customers can see the device and attach them and compare them to new devices, refurbished versus new. I'm not sure that people will stop shopping at all in physical stores because there will be some resistance that Will still want to try and test physical stuff. But yeah, interesting question though.
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D
It depends of the. What is the third effort travel business? I think there is no the same link, you know, with personal and physical. It raises the question about how brand, how marketing campaign what is blablaca will be in a few years if agents in commerce make all transactions and we just chose by some an agent and robot and we. And just we become B2B.
- [27:23]
A
Yeah, well, I guess the, with the plan on the, the agentic side is that essentially your agents would look at brands that you have an affiliation to. Like I'm a sucker for Nike. So I'm like, you know, I believe in Nike, I don't believe in Adidas. So like buy, you know, buy me Nike stuff, don't buy me Adidas stuff or whatever. So it's like actually brand affiliation becomes really important, doesn't it? So the. But yeah, your point, the distinction between brand awareness marketing is going to be weird, isn't it? You know, you'd have to do more physical sponsorship of like events where people are present rather than it being, you know, just who's at the front of the store. Right. So. But yeah, it's a super interesting point. What are you, are you ready to give up shopping in physical places or. I'll be honest with you, it's nearly Christmas and it terrifies me having to go do that.
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B
So you know, the point that I was being kind of thinking about that we've went from physical to digital after Covid. I think agent commerce would probably trigger.
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A
The way back in a bit.
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B
We need to physically have an emotional experiment for brands.
- [28:24]
A
Yeah.
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B
Because we don't know the.
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A
Yeah, well. And, and also that's a really good point. The sort of the physicality of those things is like the, the research pro, you know, me knowing I want that particular laptop. The, the research process is a very different stage of the buying process than the physical purchasing one. So you know, the, you know, I'm a, I'm an obsessor. Like holidays, I'm an obsessor. I like to research everything about a thing before I make that leap. You know, same with a laptop. Like I'm crazy into the detail of like the you know, GPU or whatever in it in terms of picking it. But then the actual purchase bit, it makes you wonder what the, what the payoff is, you know, because actually the physical trade off of pressing that button and getting that dopamine kick of I bought the thing, will you still get the same association with it or not?
- [29:16]
C
That's, that's why you were talking about Nike. That's, that's why a lifestyle brand will be really important. And at black market we, we are, we invest a lot of efforts in manifesto and everything about climate tech and climate talks, conferences, etc. We don't want people just to buy a MacBook. We want to buy, we want people to buy a MacBook from back market because it's refurbished.
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A
Sure.
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C
And be proud of it.
- [29:46]
A
Yeah. And that's the brand affiliation.
- [29:48]
C
Exactly.
- [29:49]
A
But it goes back to that point on distribution again, doesn't it? You know, at the point where, you know, millions and millions of users are using it as the way to engage then, you know, eventually the market, the demand takes over. Does it? All right, well, good question though. Thank you very much for that.
- [30:05]
C
So back to his question regarding physical stores. That's why also we didn't just open a showroom, we are also hosting events and conferences in the showroom. So it's not just a physical store where you experience a purchase. It's also a place where people gather and speak about a specific topic.
- [30:25]
D
Cool.
- [30:26]
A
All right, that is going to wrap up the first half of the show because we better get through to the thousand other things that we want to talk about in the second half of the show. So we will wrap it up there.
- [30:36]
C
Foreign.
- [30:41]
A
Welcome back to Fintech Insider Insights. In the first half of the show we discussed where we currently stand when it comes to gentic e commerce. Next up what we're going to be doing is talking a little bit about what the road ahead looks like. Taking a little bit of a closer look at cross border compliance and various different things in that guys as well. I mean Lily, we talked in that cross border structure. I mean it feels like actually this is going to get even harder when you start talking about across borders, you know because like we've seen with many innovations they happen small in a region but trying to, I mean traveling around this week everybody's got different plugs. You know like the context of that for the payments world is going to be quite complex. So how are we going to manage that when it comes to cross border corridors?
- [31:29]
D
Yeah, when we talk about cross border I think the purpose is not to choose one technology but more orchestrate them together. And for me maybe I'm the tough girl but it to know the you seem so nice. I am but to know their limit of that so epic readers bring ethics, transparency and speed. But we have to there is some constraint as capital control and it depends. The reality depends on the country and for Blublaca in emergent country as Brazil, Mexico, India cross border international transfer means that your payment have to match with an invoice or in an agreement. So it's not easy like that. Okay. And we can talk about liquidity or visual account and again tax control makes that we have to provide proper transfer pricing for Brazil. It's my battle every day.
- [32:45]
A
So who'd have thought world domination is difficult.
- [32:47]
D
Yeah, yeah, yeah. But in fact this kind of technology will. It's great for capital efficiency. It depends on country and last one I think it's tokenization. It's a future. The final day will be instant. But from treasury perspective I'm so bad but tokens are not cash yet. And so I need to have more accounting rules ammonization across all the country to embrace all this technology.
- [33:21]
A
Yeah, well and like you say actually to sort of get to the you know the beautiful future we described in the beginning actually, you know the operating system around all of these things fundamentally shifts, doesn't it? You know like we talked about in the first half data but actually with all of the components of how you run the back end of the business fundamentally is changing, isn't it to be real instant.
- [33:46]
D
That's the future. And I hope with European regulatory we can see there is a trend and I hope that all countries will follow and the purpose is to be in real time. That means a lot of changes for treasury to be able to have the right TMS treasury management system. I need to thank you.
- [34:10]
A
There were people listening to this going quickly googling that but yeah, thanks to.
- [34:15]
D
Test each bank, each technology just to be sure that we can be more proactive for all our decision and to centralize cash and to avoid any pre funding everywhere we have cash today everywhere. So the purpose is to be more efficient.
- [34:36]
A
Sure. So sort of opening that up to you guys. I mean the, the operating system for this world we're talking about seems quite dramatically different from you know, Crusader. Yeah, well I mean more broadly as well. I mean cross border definitely but actually you know, within borders because actually that point I'm joking about everybody's got different plugs but like within every border is a different system and a different set of regulations that prescribe a different way.
- [35:01]
B
You know it's, it's, it's funny because the infrastructure is made for the consumer so it's fully working for consumers. You can be English and transact in Brazil or in Australia, no problem. Your card will be accepted. It works super well. You can even stay at home in London and buy to Australian merchant, it's going to work fine. Now when you are on the other side of the fence, if you are the merchant, if you are the acquirer, if you are the issuer, it's more expensive, it's less secure. So there is a conflicting event of things that makes the. On one side there is a push for it for Crossbow, and on the other side I want to stop it and I want to go local.
- [35:57]
A
Sure.
- [35:57]
B
And that's why you see the big companies, the big players trying to have local contracts. A French company, Avilia, a domiciliation and an acquirer in America when they sell to Americans, same in Australia, to avoid this crazy cost and the crazy fraud that it generates, which is counterintuitive.
- [36:18]
A
Yeah. And you say everything works on the front end for the consumers, but often the Internet's the Internet and you can access whatever, wherever. Do you think consumers? I mean, I bought something for my wife a couple of weeks ago and I was like, that's getting shipped from Korea. Like, I'm like, this is crazy. You know, like, surely there's a manufacturer somewhere in Europe that would have distributed that thing, but I had no idea buying that thing, where it was actually shipping from. So, you know, do you think people get that? I mean, start with that question. I've got several others on the back.
- [36:49]
C
Of that, but we actually saw a better conversion in some markets if the seller was based in their home country, especially in, in the UK actually. And yeah, basically all our sellers are trying to go local. So the foreign exchange are. Are not a big challenge today at, I mean, at the platform.
- [37:15]
D
In.
- [37:16]
C
On the platform it's different topic for treasury team, but on the platform we are doing like, for like transactions, meaning that a UK customer will pay from a.
- [37:26]
B
And since the Brexit, the cost between UK and Europe have gone up. Yeah.
- [37:31]
C
Is the Brexit time then.
- [37:33]
B
Then there is the.
- [37:34]
A
I was hoping we were going to get through this without talking about Brexit. I'm still, I'm still sad about that, but I let it go online. Keep going. Yeah.
- [37:40]
B
And the authentication process change as well. The rules that apply in, in Europe to secure the transactions don't necessarily apply between the uk. It's very near, it's still Europe.
- [37:53]
A
Yeah.
- [37:53]
B
So everything is pushing the, the commerce to become local.
- [37:57]
A
Yeah, but, but I guess in order to make those things happen and to create, you know, localization of specialisms, but then instant internationalization, I'd say of networks to do these things, it kind of means for organizations like yourself, you've got to, you've got to participate very heavily locally but also participate from a global network perspective as well. Like how do you manage those two demands?
- [38:25]
B
Well, it's very hard. So we've got on one side to be prepared to follow the demand on the cross border side, anywhere currencies, interchange management, all the fees, billing, settlement, and on the other side we've got a huge demand from clients to go local. But going local is very difficult. You can go. So we are local in America, in Canada, in Europe. Europe is considered as one country. We are lucky for that. Now UK is one country, but Africa is many countries, Asia is many countries, you see. So it's very difficult to set up a localized solution for all those Asian countries. So if the marketplace or the merchant wants to go local in Thailand and we don't have Thailand, then they need to pick a local provider or another provider. So it's complex.
- [39:30]
C
You said that Europe is one country, but it's mostly because it's of the currency and one regulation. But if we go back to the fragmentation of payment means, for instance super fragmented on the other side, even though there are some transversal initiatives like the euro, digital or instant payments.
- [39:58]
A
Well, and different from an infrastructure perspective, common from a regulatory perspective. But consumer behavior is so dramatically different as well. You know, you guys must see very different behaviors from different geographies that you operate in as well.
- [40:10]
C
Yeah, definitely. For instance, in the Netherlands they are paying with ideal. Like 95% of all transactions are going through ideal. In France it's mainly cards, card banker. Germany it will be more PayPal and Klarna. Yeah, super, super different from one country. And sometimes it's not just about the payment means. For instance, in Germany when we added the TNCs of pack market on the checkout page we saw an increase of conversion and they were actually clicking on the TNC link. Yeah, it was a reassuring element.
- [40:51]
A
It's amazing. Different places have very different behaviors in that structure, don't they? I was in Lisbon yesterday and there's still a lot of cash businesses. Didn't realize when we went into the coffee shop that it was a cash business. Had to leave my colleague as like a down payment on the coffee and the patisserie that we'd picked up so I could go and find an ATM to be able to pay for it. But it's so yeah, different geographies have very different structures. What else makes up that operating system then? You know, we've touched a little bit on the regulatory side of Things we've got cross border networking to allow us to do those things much more effectively. What else is in that blueprint that we want to achieve that future that we were talking about earlier on?
- [41:33]
B
Well it's a white topic I can say it's becoming more and more world of fintechs. So this is the title of your podcast Fintech Insider. But it's true, it's. It's a business that is, you know, contrary to what people think that is very low margin from a provider point of view but high demand of new functionalities, new stuff innovation as we saw heavy regulation and that that creates a lot of constraints for, for banks in particular to to remain very competitive in this space because many of them have the choice of investments between more cash generating products than this one. That's why we are not so many banks in this business anymore. 20 years ago it was 100% a bank business. Today I would say banks are minority players in that space. So it's also a major evolution. But I would say that and that's something that we have seen lately, it's also good to be a bank in this space because treasury and Commerce works well together number one. Number two there is a security element we have seen unfortunately. I say unfortunately because it's damaging the whole industry. Companies falling down, companies in jeopardy. Today we see stock prices in payment companies falling to the bottom. So it's not good for the industry, it's not good for all of us. But it means that a bank that has stayed strong in this industry despite all this is an important asset for the industry. So what I would say is that it's not only about price, it's also about the security, it's also about the quality of service and we need to be mindful about this as well.
- [44:08]
A
Yeah, it's an interesting point that on the balancing act of commoditization of capabilities but also the need for them to always be pushing the boundaries and to your point earlier on around the fraudsters are always pretty quick to find gaps in those things which means we need that balance between how do we create commodity and shape the price of structuring to move money. Talking about trillions of dollars around the world that equally that it's being innovative, it's being safe, it's being secure. That's quite a hard balancing act, isn't it?
- [44:42]
B
Exactly.
- [44:43]
C
And adapting quickly as well.
- [44:45]
D
If I may regarding bank and versus Fintech. I think it was fintech area for years but now with a new regulation more constrained to have a more equality between the fintech I think banks become bank. Yeah. And for treasury perspective it's really a good shift because bank is not just a service provider. I need them to, I need to expertise locally. I need the experience to have the benchmark for other countries and other companies. So for me I prefer to play with banks as merchant sometimes it's some debate internally with payment service but that's the point because I need to have agility as gpmonger but I need resilience.
- [45:40]
A
Sure.
- [45:41]
D
That's very important for me and I'm glad to see how it will change in the future.
- [45:47]
A
Yeah, I mean that's an interesting point because then it's not just about just the individual products it's about the holistic nature of the service then, isn't it?
- [45:55]
D
It's a global relationship. It's very important.
- [45:57]
A
I think we've covered like, like a million different things that we probably could have done like an hour on each of those topics but we, we've sort of gone through you know, agentic commerce, regulatory side of things, structuring operating system around it. I mean what's the one bit we're gonna have to wrap up real soon because you guys are probably going to go home. Right. But what's the thing that you're most excited about? Let's start with you at the end. What gets you out of bed going, you know what this is for? I love working in this industry. Like it's fun to do this thing.
- [46:33]
C
I for me it's agent E commerce. Obviously we have been talking about it a lot and how is fraud management is going to adapt even more than the payment experience? Because I'm sure that payment experience will be super smooth, et cetera. The question is more where will we put frictions because of fraud management in this experience? That is a big bet and big focus for me at the moment.
- [47:02]
A
Sounds good.
- [47:04]
B
No, I think it's linked to what I was saying previously. It sounds like a dinosaur saying this but I think it's very important to understand that we talk a lot about innovations AI but in reality things are not moving that fast because at the end of the day you've got a consumer that is deciding and whether we like it or not, consumers are extremely conservative about the way they spend money. So what really excites me about this business it's to maintain a kind of reality to this, to all those dreams of evolution, innovation and to convince more and more companies that it's good to be a bank in that place.
- [48:06]
A
Sounds good, sounds good. How about you what's the. What are you sort of. Do you know what, when we get to this point, it's going to like change how I do my job or.
- [48:14]
D
From my point of view, we can see a real shift about the role of Treasury. For years it was seen as back office and brewing, but it was always strategic role. But now it's obvious with technology, everything move fast. So we have to integrate all this technology and to prove our agility, to prove that we are the great department to bring decision support to, to avoid risk, to take opportunity and I'm glad to build my part in this future.
- [48:53]
A
Very good. I'm often sort of say it's like we're so lucky to work in the industry now. You know what I mean? Like innovation a couple of hundred years ago was like very boring things, you know, like, so to do what we do today, it's a blessing to work in the industry for sure.
- [49:09]
C
It's tremendous time to be in payment.
- [49:10]
A
Yeah, indeed. Indeed. All right, on that note, we are going to have to wrap up though, because we're going super duper long, but we will definitely have to come back to Paris and do this again. So on that note, it does wrap up the show to end. Where can people learn a little bit more about you and your company?
- [49:25]
D
You can reach me and check my profile on LinkedIn. I'm an ID conveyor. I prefer to repeat all of the.
- [49:32]
A
Spellings in the show notes. Everybody, you got this right, so I'm.
- [49:36]
D
I will be glad to continue this conversation.
- [49:38]
A
Very good. How about yourself?
- [49:40]
B
Yeah, LinkedIn works fine as well.
- [49:42]
A
Good stuff. How about you? Very good. And yeah, for everybody listening, I'm predominantly lurking on LinkedIn these days, so you can find me out there. Thank you so much for listening, everybody. If you've liked what you've heard, follow our podcast. Don't forget to leave us a review. Super Duper helps other people find the show and helps us make it better as well. As always, if you want to join the conversation, you can find us on on pretty much every social media channel. Just search for 11Fs or FinTech Insider. Or if you really want to, you can send us an email on podcasts@11fs.com. That was a lot of fun. Thank you very much. Goodbye.
- [50:13]
B
Thank you.
- [50:13]
C
Thank you.