Card issuance is enjoying a lot of fintech light shone on it as technology and use cases catch up to the modern economy. From Marqeta to Stripe and now Adyen, payment firms are moving quickly in this space.
Roelant Prins, chief commercial officer of Adyen, joins us on the podcast to talk about his firm’s new card issuing service, where the idea came from and what type of customer demand they’re seeing for it. We discuss Adyen’s global approach and drill down into what he describes as unified commerce.
Adyen’s growth trajectory
It’s been a fantastic ride. 13 years ago, you had no idea where this would lead. We’re building for the long term as a company with all the decisions we make. In terms of your personal trajectory in a company like this, you look at the next one or two years and see how things evolve. The cool thing about it after 13 years is that it’s always interesting — there’s never a routine. Every year, there are new challenges and new things we’re doing.
There are a few key things about how we work that haven’t changed since the beginning. We are very linked to helping our merchants grow their businesses. That’s always driving how we develop our products and what new features we build. That’s been our approach from day one.
New card issuing service
We are working more and more with platforms and marketplaces. We see a lot of food delivery companies and travel companies. The existing issuing solutions that they were working with were very limited because some of it is old technology and limits these merchants in what they can do.
Issuing has various use cases. For example, it’s a great tool for the platform economy to enable sellers or drivers with their activities. Food delivery companies have people who fetch the orders, pay for it, and deliver it. To pay for it, either you give them cash or build an account with the underlying restaurant or store.
Or, you issue a card to these people with a specific amount, only valid for a specific retailer during a certain window. You can make funds available in a very defined window and that’s super valuable to these companies to manage their cashflow and their risk. It’s a solution that just wasn’t available with more legacy issuing products out there. We’re using modern technology to make these issuing services much more fitting to what merchants are looking for.
If you want to build a payments company for the long run, scale and volumes are important. We’re originated from the Netherlands, a country with 17 million people — it’s kind of hard to build a local business and have lots of scale. We think internationally by default. Our first customer was a German merchant and we started out building a pan European solution from day one. Quite soon after, we went to the U.S. and Brazil. We were always interested in building a global company because that’s where the market and merchant needs were going. That makes it a lot of fun.
We work with large tech and ecommerce companies as well as large retailers around the world. Originally, that work was around helping them with online payment solutions. Increasingly, they were asking us to help them fix problems in store. They have fragmented infrastructure and old solutions in their physical stores. They were operating 20 – 40 different solutions across their different markets. Combine that with how significantly consumer behavior has changed over the past few years — moving more control to the shoppers.
In order for retailers to build relationships with today’s consumers, you need a different way to interact with them. You want to give them the same experiences online that you have in store. You want them to easily be able to return something they bought online in store. Payments play a key role here — having a unified payment infrastructure online and in store — makes all this so much easier. That’s been driving the retail activity we have. We’re investing heavily here. There’s big demand as all these companies go through a digital transformation process.
The U.S. market
The U.S. market is a highly strategic area for us. It’s always been — from the early days, we’ve been working closely with a lot of tech firms in the Valley to help them expand across the world. Most of the consumer-focused companies work with us.
Over the past few years, we’ve been heavily investing in the solution for the domestic market in the U.S. We have a large team — over 125 people — specifically in New York and San Francisco. This year, Subway decided to roll out with Adyen across the country. This was a big moment for us. Subway is largely still in-store payments with a franchisee model with many location across the U.S. It really signals that we’re here with a domestic solution.