Vadim Drozd, CEO of the project, shares the results of work and future plans in an exclusive interview.
Vadim Drozd has over eight years of experience as a FinTech industry expert. His substantial technical and administrative background has allowed him to shift his focus to executive positions and take control of the processes and teams. He currently holds the position of the CEO of FinteqHub, a PCI DSS Level 1 certified payment gateway for online businesses. FinteqHub provides access to integrations with various payment systems via a single platform.
— As FinteqHub celebrates its first anniversary, let’s remember how this project started.
— About four years back, SOFTSWISS made a solid call to develop an in-house payment gateway, now named FinteqHub. Before this move, we relied mainly on third-party solutions. Realizing how crucial it was to have control over our payment infrastructure, we got the team together and laid out the blueprint to craft this gateway. Skip ahead about two years, and we were in the production phase, hitting the launch button on our first transactions.
A year later, we obtained a PCI DSS certificate. This is a game-changer for us because it gives us the green light to manage a variety of payment methods, including cards, and pull off more intricate transactions. Specifically, it lets us do cascading payments, bringing in multiple payment acquirers to ensure transactions are not only swift but also seamless. Should any issues arise with the initial acquirer, the payment smoothly shifts to another, all without the player even noticing. Having this certificate also means we can tokenize cards, making the whole payment process even more user-friendly.
We’ve integrated around a hundred systems. Our solution handles alternative payment methods, digital wallets, and card acquiring. Our clientele is diverse, including users of other SOFTSWISS products, creating opportunities for cross-sales. Additionally, we’ve attracted entirely independent third-party companies from various industries into the fold.
— How do your solutions stand out from other payment systems in the market in terms of customer benefits?
— What sets our product apart is its versatility — FinteqHub isn’t confined to the iGaming industry. In theory, we can collaborate with any vertical.
Our primary attention is still directed towards the sectors where we initially took off and continue to excel: casinos and betting. Moreover, we’ve also seen a significant uptick in inquiries from the Forex sector. Another emerging trend is the rising popularity of skin marketplaces, where in-game skins from titles like Counter-Strike and World of Warcraft are traded.
FinteqHub tackles various challenges for businesses. Its primary advantage is simplifying the integration process for our merchants. When you connect with us, you unlock access to all payment systems integrated with FinteqHub, ultimately streamlining and saving time in the process.
The second aspect involves our back office, which provides user-friendly functionality to configure routing, payment flows, and display payment methods customized for different countries. It also includes features such as transaction history logging and analytics collection. Essentially, this provides additional functionality that businesses don’t have to develop within their own systems or platforms, resulting in cost savings on feature development.
The third and most crucial aspect is our expertise. We deliver solutions that we’ve thoroughly tested and are confident in their reliability. Importantly, we provide our clients with clear guidance on what to expect at every stage of the process and what they will ultimately receive when connecting to the payment system.
Our goal goes beyond selling payment system integrations. We aim to holistically cover the market’s payment methods. In this pursuit, we position ourselves as experts in specific regions, leveraging the extensive experience gained from our partner company SOFTSWISS.
For example, we possess in-depth knowledge of the Latin American market, especially Brazil. We know exactly which methods are essential, what’s effective, and what falls short. This expertise isn’t limited to just a few years; we’ve been at it for five or even ten years in some cases. Another market we’ve thoroughly studied is Canada. We have a solid understanding of the best partners to work with there.
We give our clients a transparent view of the final price. While the contract outlines the terms and conditions, factors such as conversion rates, exchange rate differences, and additional commissions that may not have been initially apparent can impact the price when you start using the system.
— You’re open to clients from various spheres and activities in different domains. How can you help them? Are there any interesting cases?
— When it comes to related services where we’ve provided value to our clients, the banking aspect stands out. We’ve assisted our clients in opening bank accounts with reputable banks. Opening a bank account can pose challenges for companies in high-risk industries, as banks are reluctant to take on certain risks. Moreover, a potential client may invest considerable time in various stages of communication, uncertain of the success and efficiency of the time spent.
We’ve forged robust partnerships with banks, transcending the conventional third-party client relationship. Banks view us as a valued partner and provide dedicated account managers or even teams assigned to our account. Agreements with banks clearly outline the types of clients they find acceptable, ensuring a mutually beneficial and transparent collaboration.
We conduct a preliminary assessment in advance, addressing initial questions for both the bank and the client. This proactive approach eliminates wasted time, dispels uncertainties, and streamlines the process. We leverage our previous experience to identify and approach those with whom there’s a high probability of successful cooperation.
Besides, businesses often grapple with the issue of trust and secure management of their funds. Particularly concerning bank accounts, we’ve helped numerous satisfied clients who initially attempted to navigate these challenges on their own or through intermediaries, only to encounter unsuccessful outcomes. We were able to solve this challenge for them. These clients not only return with additional requests but also refer new clients to us. Currently, we aren’t seeking clients; rather, they’re seeking us.
— Could you provide an overview of the payment systems and methods supported by your platform, and how they cater to the diverse needs and preferences of users across different regions and markets?
— It’s important to highlight that our focus is driven by the markets we serve, and the market itself dictates which payment systems we prioritize. Different regions favor different local payment methods, typically falling into broad categories like bank transfers, card acquiring, and wallets, with each gaining popularity in specific areas.
Wallets may not be as prevalent in Europe compared to other regions, but they still hold a considerable market share, particularly in iGaming solutions, especially those offered by major companies such as PayPal and Paysafe. Meanwhile, Open Bank Transfer Solution is currently gaining traction in Europe. However, the narrative shifts when we explore Asia and Africa, where wallets play a central role and tell a distinct story in the payment landscape.
Any method popular in the market is incorporated into our offerings, whether it’s bank transfers, card payments, wallets, or vouchers. Additionally, we have partnerships that facilitate the resolution of issues related to crypto processing. Our approach is to provide not just one supplier, but an alternative option. This ensures that in the event of challenges with one supplier, you have the flexibility to seamlessly switch to another.
— Could you elaborate on the role of emerging payment trends in meeting the universal demand for instant transactions, cost-effectiveness, and reliability in the evolving payments industry?
— The universal trend in payment preferences revolves around three key aspects: instant transactions, cost-effectiveness, and reliability. Regional disparities, however, highlight historical inclinations toward specific payment methods. For instance, countries with accessible banks often favor card-based or bank transfer options, while regions with limited banking infrastructure lean towards digital wallets or mobile money solutions.
Global FinTech giants like PayPal and Skrill serve customers worldwide. The cryptocurrency domain, growing rapidly, presents a contrast to existing fiat systems with a 99.9% acceptance rate, swift transactions, and minimal commissions, envisioning the future of payments.
In Europe, open banking solutions have surged in popularity, using banks as the backbone for card acquiring and other methods. With widespread possession of bank accounts, open banking and bank transfers emphasize rapid modernization, prioritizing user convenience and speed.
Previously, initiating a bank transfer involved formal requests processed during specific operational hours, managed by a designated individual. However, significant advancements have streamlined the process. In many countries, government regulations or support have enabled instant payments for users. While the actual transfer of funds may take some time, users experience the convenience of swift transfers. This ensures that they promptly access the desired service or game, contributing to a seamless and efficient experience.
The prevalence and evolution of digital wallets is particularly pronounced in countries with limited traditional banking infrastructure. In markets like India and Africa, indigenous digital wallets gain prominence, fueled by significant funding and strategic investments from major players such as Ant Financial. These solutions compete with local banks, offering users more affordable and convenient services, marking a persistent battle for user adoption.
An emerging FinTech trend is the rising popularity of “buy now, pay later” services, as evidenced by extensive coverage in FinTech news. Operating akin to microcredit, these services offer users short-term credit for purchases, similar to prevalent overdraft cards. Banks provide interest-free loans, usually spanning a week or a month, depending on the terms offered.
Now, this system operates without traditional banking involvement. Essentially, risks are gradually shifting to sellers, specifically online stores. Users receive purchased items instantly, settling payments as funds become available, marking an emerging trend gaining rapid market traction.
Cryptocurrency payments, though not new, are evolving rapidly. Regulatory changes are underway, and recent developments, such as the closure of major U.S. exchanges, signify the maturation of the crypto infrastructure. This evolution indicates that cryptocurrency payments are becoming entrenched in legislative frameworks.
In certain countries, fully legal crypto machines are now available, allowing users to either cash out their cryptocurrency or, conversely, load funds into their crypto wallets. This shift is poised to impact the online landscape significantly. Cryptocurrency remains a robust, continuous trend that will undoubtedly progress in 2024 and beyond, particularly with the emergence of new regulations governing this domain.
— How do regulatory frameworks in financial markets evolve over time, and how do these changes impact industries like iGaming, particularly in terms of market growth, stability, and user trust?
— Understanding financial markets requires acknowledging their operation within strict regulatory frameworks, where changes unfold slowly. Specific bureaucratic processes and laws that were formulated, let’s say, five or seven years ago, are taking effect only now.
In the iGaming realm, countries are reshaping their regulatory frameworks to better align with their societal and economic objectives. These regulations transcend legal necessities; they symbolize a nation’s commitment to nurturing and fortifying the iGaming sector for its intrinsic progress.
A well-structured regulatory framework not only guides operators toward markets offering growth potential and stability but also ensures a secure gaming environment for users while serving as a dependable revenue source for governments. This shift towards tailored local regulations represents a move away from the previous one-size-fits-all regulatory model.
A compelling example of this trend is evident in Brazil, which, through strategic regulatory initiatives over the past decade, has garnered significant attention within the iGaming sector. Positioned as a pivotal player, Brazil stands poised to reshape the dynamics of the industry.
— How do you evaluate FinteqHub’s first year? What challenges have you faced?
In my perspective, having the right people on your team can solve any issue or overcome any challenge.
As a young and dynamic company, we’re in a constant state of growth, continually refining processes and undergoing restructuring. The past year has been both interesting and demanding for us. We successfully completed another PCI DSS audit, restructured our application, and revamped our infrastructure to facilitate even faster integration of diverse payment methods. Throughout the year, we integrated numerous new solutions (around 30), including the addition of solutions tailored for the Indian market.
We’ve set a certain pace, and I’m encouraging the team to keep up the momentum in the coming year.
