1on1 with Danny Chazonoff: "We have big ambitions"
1on1 with Danny Chazonoff: "We have big ambitions"
Ahead of ICE 2017, Paysafe COO Danny Chazonoff reflects on a huge year for the expanding Paysafe Group and what lies ahead for the listed payments specialist.
Totally Gaming: 2016 was a transformative year for Paysafe Group, how has your business changed structurally and operationally and how will those changes aid 2017 growth and progress?
Danny Chazonoff: It really was a great and important year for us. We completed the integration of Skrill earlier than we initially anticipated, moved into the FTSE 250 Index, bought two more businesses – MeritCard and Income Access – and focused on developing our Group under a centralised technology platform.
The team has done a great job bringing the companies together at a day-to-day operational level and of course under our new Paysafe brand. Our new brand identity was only launched in November 2015 and we’re really excited about the interest it has generated and our plans to build the business further. It’s an incredibly exciting time to be in payments.
In terms of industry verticals like gambling, the last year was very much a case of focusing on what we do really well: extending our position as a payments innovator, broadening our presence in new markets and offering more payments-related products and services that help to take the friction out of sending and receiving money. We were already well established as a relevant and trusted partner from a payments perspective for the entire gambling community with our NETELLER digital wallet products and with our payment processing offering.
Adding Skrill to the mix was a step change. That transaction effectively doubled the size of the business and undoubtedly helped to increase our relevance around the world to businesses and consumers. With the Skrill acquisition we also added paysafecard which is a leading prepaid solutions provider to the gambling industry.
TG: Paysafe has established itself as the leading payment supplier for the igaming/betting industry. Coming into 2017 how are payment services evolving for a consolidating global betting market?
DC: After completing the integration of Skrill ahead of schedule, we turned our focus to our core technology. Innovating and harnessing state-of-the art technology tools that add value to our merchants and consumers is one of the strategic pillars for our business. It reflects our drive to consolidate our capabilities across all the payment methods we provide into a single proprietary platform. This is important for us and the market as it brings a level of convenience, simplicity and scale to the mix for businesses we support both now and in future.
It’s evident around the world that payment services are evolving rapidly as technology and innovation play their part amid changing consumer behaviour and the need for faster, simpler and more convenient payments. We’re really well positioned amid this. Consolidation is a fact of life in the payments industry as it is in many other industries and we’ve certainly been an active player amid this over the years.
We’ve also repeatedly made clear we have big ambitions. With the ongoing drive for mobile-centric, location-based payment services and deeper, real-time insights from ‘big data’ into consumer behaviour, it’s likely that the services we’ll be talking about in a year from now will offer even more simplicity and convenience in the years ahead. After all, people aren’t so interested in payments for the sake of payments. They just want to buy, send and receive money easily. The winning services will be those that make that happen.
TG: As a group you have placed a high emphasis on data and knowledge transfer between your payment transactions and industry stakeholders. How does this data help optimise industry operations?
DC: It’s fundamentally important to the industry at both a business and consumer level. This is one of the reasons why we pay so much attention to adding value to the payment services we provide. The data platform we are building is designed to power real-time decision making for merchants. This is essentially about enhancing the quality of payment-related services they provide for their end customers. We’re also building a new unified merchant onboarding capability covering our entire offerings across our processing, wallets and prepaid services as well as compliance, risk management and KYC tools.
Taken together, and leveraging our longstanding expertise across the payments industry which goes back 20 years, we’re continuing to build value around payments for businesses of all sizes – smarter payments are simply better for everyone.
TG: Having undertaken a number of acquisitions targeting operational services for the igaming/betting sectors, is Paysafe Group still primarily a payment provider or has your company evolved into a new being?
DC: Payments is in our DNA. It is core to what Paysafe is. Innovations, technology and customer expectations are revolutionising how we use and manage our money on the move in our increasingly connected digital world. More than ever, businesses and consumers expect faster, safer, more frictionless ways to send and receive money and a big part of what we do is understanding the needs of our clients and providing them with the comfort that we have a complete suite of products and the expertise to manage these expectations.
We’ve been championing change in the payments industry for 20 years and do a lot more than just process payments: from merchant acquiring to payment gateways and integrated payments; from enabling alternative payments, to omni-channel and secure cross-border ecommerce; from white -label credit solutions to mobile order and delivery platforms, and access to a global payment network with a single partnership. We’re pretty proud of the breadth of our payment capabilities, although we know we can always do more.
In general, the driving force behind our acquisitions centres on how we become more relevant and adding more value. We effectively transcend payments and bring real value to the gambling community. That includes VIP management, partnering on various promotions and affiliate management tools or indemnifying funds in e-wallets, and KYC capabilities. These are just some of the additions and tools that make us more relevant and powerful as a payments partner of choice.
As we’ve said before, we’re interested in bold M&A to grow our business, it’s one of our core five strategic pillars which also include: driving organic growth; developing state-of-the-art technology; offering niche-orientated solutions; and maintaining our entrepreneurial culture.
Those who have followed us closely over the years have seen us execute transformational deals like the Skrill acquisition in 2015 along with numerous bolt-on strategic transactions. They all give us more relevance and reach in particular industry verticals or markets. The Income Access deal late last year is a good example of that – it helps embed our relationship with merchants as a preferred payment service provider for their affiliate payments and allows us to expand our collaborative marketing efforts to drive new customer acquisition. Importantly, it also leverages relationships to expand revenue-driving activity both in and outside the iGaming space.
TG: Assessing the current industry value chain, how can suppliers and stakeholders work better together to create optimal consumer services and products. What current factors have to be overcome?
DC: Close collaboration between the partners along the payments value chain is key – helping each other to understand their respective aspirations, priorities and strengths and identifying how best to use them together.
It’s also important to work closely with various stakeholders at large and have a clear understanding of regulation and demand. For example, as our merchants expand into new geographies, we work with them to find and leverage appropriate local payments types. There are a lot of new payment ecosystems where credit cards are not well utilised or issuing banks don’t accept cross-border transactions. In instances like this, we look to integrate alternative payments to help merchants realise their goals, which in turn expands our own growth and horizons.
In the past we have helped companies expand to markets where there were problems with conversion rates, and we integrated a few local payment types that turned 30% approvals into 80% approvals, making a big difference for us and for the merchants.
TG: Coming into 2017, from a leadership perspective what new sector trend, topic or debate, do you feel will dominate this year’s agenda and how should stakeholders begin to prepare for any potential impacts?
DC: From a regulation perspective, the AML and KYC requirements are notable. One of our core assets is our ability to respond quickly and effectively to regulatory change, and as such we see the ongoing reforms as an opportunity for us to become more relevant to our merchants wherever possible.
We’ll be helping gambling and gaming companies that are looking for assistance in these areas, helping them in their journey through an evolving payments landscape. Looking at ways to limit exposure to chargebacks and manage risk and fraud remain priorities for gaming companies. It’s an area we have long-standing expertise and it will continue to be a key area of focus for stakeholders.
From a technology perspective the move towards mobile-centric and ‘smart’ payment offerings has been well documented. It will continue to be a key focus in a world excited by the possibilities imagined by the Internet of Things. This is one of the reasons why we are so excited by the role we play as a global payments provider – connecting businesses and consumers with simple, secure and seamless payment solutions.