The transformation of payments through fintech
Sean Fitzgerald, CEO and Founder at Sentenial, explains to FX-MM editor Peter Garnham how agile fintechs are taking advantage of regulatory change to revolutionise the payments industry…
Fitzgerald founded Sentenial in 2003 to focus on the potential opportunities created by SEPA, a regulatory change that prompted a significant shift in the payments market structure across Europe, and the firm has ridden the wave to become one of the new breed of fintech firms that is transforming the industry.
“Banks and corporates were all going to have to adapt to the change and that led to a significant opportunity,” he says. ”Usually when you have regulatory change there is an opportunity.”
There was, in addition, a lot of technological change in that period, notes Fitzgerald. This, coupled with the technical advances enabling service delivery in the software-as-as-service (SaaS) mode, started to make it look very attractive, notes Fitzgerald.
The old fragmented European market structure, consisting of the different national schemes and structures, particularly around direct debit instruments, was revolutionised with the creation of a larger market for single common payments instruments across the continent. That, says Fitzgerald, meant that firms such as Sentenial could deliver common services across a larger market. In addition, that market was underserved by the existing service providers, the banks.
“The opportunities were there for significant players to make the appropriate investments to come up with a platform to serve the entire market because before they would have had to build systems for each different market. The economies were there now,” he says.
Sentenial’s strategy played out as they built a bank-grade engine platform in the cloud for acquiring ACH transactions; SEPA credit transfers and direct debits.
“We built that system with very significant investment over that period of time,” explains Fitzgerald.
As a consequence, Sentenial stands as an important payments outsource acquiring and processing partner for some of the largest banks in Europe. Indeed, European banks process over €35 billion worth of payments over its multi-tenanted software-as-a-service platforms annually.
Sentenial also provides its payments origination and processing services directly to corporates and to other payment service providers (PSPs).