What does the future of fintechs look like?

Recently our CEO John Cragg joined David Poole, Head of Mobile Solutions at our sister company MYPINPAD, on The Green Sheet’s inaugural Virtual Fintech Summit to discuss the future of Mobile Payments. In this discussion, John and David gave their views on the problems and solutions in the industry and how it will change over the next decade. Here we give an overview of the key takeaways.

Traditional on-premise HSM’s vs HSM as a Service

John discussed the problem with traditional, on-premise payment HSM’s is that they are very expensive, costing thousands of pounds per device and only having a shelf-life of roughly 8 years. Many organisations (especially banks) have become increasingly frustrated with the continuous cycle of buying, maintaining and replacing obsolete units which absorb money, space and focus from other areas of the business.

This was especially an issue when the majority of the back office infrastructure and systems migrated to the cloud. However, up until now Payment HSMs have remained as the traditional own- and-operate model.

This is what inspired the MYHSM team to launch Payment HSM as a Service, replacing massive capex costs into a simple, low cost, monthly fee based on utilisation.

Reduced total cost of ownership, reduced complexity, and always compliant. Exactly what businesses need, especially start-ups.

HSM as a Service helping fintechs launch quickly and securely

Further to this, John discussed how there were two extremes in the finance industry. The big legacy banks on one end who have the required infrastructure and then the virtual fintechs with no brick and mortar competing to become the next unicorn. Both of which are seeking ways to remove the complexity and cost associated with Payment HSMs.

Fintech start-ups can spend years in a testing phase, perfecting new technology they hope will change the industry. It doesn’t happen over night. However, during this process, the technology still needs to be PCI compliant and this means requiring a payments HSM. But with the large price of traditional payment HSMs this can be a wall too big to scale.

That’s why MYHSM’s low cost alternative is such a boon to start-ups and why they have seen a huge uptake of them. It has removed the barriers to entry for many fintechs, helping to speed up the process between concept and going live.

Driving innovation in payments ecommerce

According to John, the solution to many issues in the ecommerce space always seems quite logical but the journey there takes much longer than it needs to. This is primarily down to compliance issues. Becoming compliant is really important but it is a long process that delays innovation.

MYHSM’s Service is PCI DSS and PCI PIN approved, so organisations can focus on developing their own solutions and businesses.

David also believes that speed is an issue and agrees that supporting innovation is key. With the current pandemic the need for innovation is more vital than ever before. All the challenges the world is facing right now, such as the pressing need for contactless, is driving innovation at an incredible rate.

Future of Fintech

MYHSM and MYPINPAD share one vision: to simplify the complex payments infrastructure and deliver IT as a service through trusted products and services. The problem is that it takes time for companies and consumers to get onboard.

John thinks that MYHSM will play its part in this process, accelerating the financial world towards its goals. To do this they will change the way people consume Payment HSMs.

This is just a sample of what was discussed in the talk between Green Sheet, MYHSM and MYPINPAD. You can view the full interview below.