• Thom Ruiter, Vice President of Banking and Financial Products at Adyen


• 21.06.2024 02:45 pm
#payments #moneyflow

The speed of money flow is crucial in the payments sector. It supports fast and prosperous businesses. Thom Ruiter, who leads Banking and Financial products at Adyen, talks about what drove Adyen to become a bank in the UK - and gives a glimpse into the fintech’s next steps.

In 2023, we obtained our banking authorisation from the Bank of England and we started processing quickly. We connected to the Bank of England and Faster Payments Service in just 8 weeks after getting authorised. The authorisation enables us to offer our newly launched integrated financial product suite in the UK, including enabling our SaaS platform customers to offer embedded financial services to their small business users. 

Our banking license lets us keep providing banking services and financial products in the UK. This continues our operations here under the Temporary Permissions Regime and means we can now match our services in the UK to our European and US offering.

Adyen already works with Instant Payments and Payouts in the EU and US, so we are excited to add Faster Payments to that list of key infrastructure to enable this in the UK too. The ownership of these infrastructures under our licenses is pivotal for ensuring the highest quality and the most efficient flow of funds for UK customers on a global scale.

The authorisation further underlines that we are growing as an ambitious centre for international commerce and reflects our vision of becoming an end-to-end financial technology platform for the world’s leading businesses.

What tangible impact does the authorisation have for your platform customers?

Our banking license lets us enable our platform customers to pay their UK users, such as online sellers, vendors, and gig workers, in a minute, 24/7, with only one global partner for both payments and payouts. This way, these platforms can differentiate themselves and appeal to new users who value receiving their funds as fast as possible.  

We conducted research alongside Boston Consulting Group and found that 69% of platform users would move to another platform that offers a more integrated payments experience, including faster payouts. It’s a big opportunity, and established platform businesses are already seeing as much as 80% of their revenue coming from embedded payments. 

For those platforms considering embedded finance offers for their small business users, we found that there could be a potential revenue uplift of 70%, while the market for small business embedded finance is still at an early stage of development - with less than 5% of penetration. Our technology means platforms can offer business financing to pre-qualified users directly via their platform, while minimising denials. Everything is automated including the proactive risk assessment, defining the amount of money a business can borrow, as well as repayment management. 

If a platform customer of ours processes the embedded payments, they can estimate how much a user can borrow responsibly and automate repayments without burdening their cash flow. Embedded payments make it possible to automate how much a user repays per transaction. The need for business financing for small businesses can’t be overstated. 94% of the small businesses that we spoke to for our Embedded Finance Report said they would benefit from access to liquidity in order to grow their business.

Adyen’s banking license also allows us to create new products in the finance sector, like Card Issuing that help our customers to discover new sources of income and to future proof their businesses.

Adyen customers can use one API to payout globally to their own platform customers, which gives those users the chance to use their own money to earn interest, invest in R&D and reduce their dependence on external funding. This way, they avoid the operational difficulty and scaling issues of working with different providers across regions, and they can also manage funds globally with one partner.

Finally, as a local acquirer, we control our operations and ensure that UK customers benefit from our wide range of services, with more speed, flexibility, and reliability. 

What does the future hold for Adyen?

We want to capitalise on the banking-as-a-service opportunity, and we are expanding our portfolio of in-house solutions that we offer our customers. By investing in banking licenses in our core markets, we’ve positioned ourselves as the sole provider that offers a full stack embedded financial product suite via a single integration.  

We already have Capital and Accounts solutions that enable our platform customers to continue to offer innovative services to their own users. Capital enables platforms to proactively offer business financing based on historic payments data, while Adyen’s Accounts product allows users to run their finances where they do business and get instant access to funds.

We’re now focussed on what’s next. Businesses need financial technology that keeps up with their own ambition. We started with payments and tackling head-on the patchwork of legacy systems. Looking at the wider, often fragmented financial landscape, we’re seeking to build greater control and flexibility to the next generation of businesses.