To get a sense of how fast the financial technology boom is sweeping through the industry, consider that Worldcore celebrated only its one-year anniversary in September, yet already this Central and Eastern European company is well on its way to achieving its aim to become a one-stop shop for all payment solutions, and in doing so take a big chunk of business from the banks. Worryingly for lenders, the company's ambitions don’t stop there.
“We have developed very quickly a lot of payment options like voice biometrics identification, APIs [technology that builds software applications for services] mass payouts to any Visa/MasterCard around the world, and merchant processing for e-commerce – all this was done this year,” explains Alexey Nasonov, the youthful-looking founder and CEO of Worldcore, which bills itself as “the world’s first EU-regulated global payment platform with voice biometrics authentication”.
Before the end of the year, Worldcore expects to receive confirmation it has met the PCI DSS (Payment Card Industry Data Security Compliance) standard that will mean it can store credit card data on its servers. “This is an important step, because Worldcore will then be able to become a direct card issuer and acquirer, so we will begin providing corporate debit card programmes with branded and co-branded prepaid cards,” Nasonov explains. This is a rapidly growing market, as it offers an instant, cost-effective solution for corporate payments, he notes.
The plan for the coming months is to launch a mobile application that is designed to provide full parity with the desktop web experience, and to offer all this in languages including Polish, French, German, Spanish, Portuguese, Swedish and Dutch. On the corporate side, Worldcore will look to offer full white label payment solutions products, allowing clients to increase their own brand value.
The speed with which Worldcore is developing its business is symptomatic of how these smart, innovative, flexible firms are eating away at the banks’ traditional intermediary role in financial systems. Nasonov, who has entirely self-financed the growth of his company and dismisses any talk of bringing in outside investors, explains that his method is to compare all the available payment solutions with similar services package out there, and try to find some disadvantages or advantages in each.
The challenge is to then “find what I can do to enroll clients faster and keep them happier than the traditional bank system,” he says. The paperless workflow allows Worldcore to be fully compliant with all regulations while also providing the fastest possible client enrollment in the industry. “Moreover, it’s all very cost effective,” adds Nasonov.
A typical company of around 100 employees scattered around the world can distribute Worldcore debit cards to its staff, which are then loaded up with salaries and expenses in a matter of minutes each month at a cost of less than one dollar per transaction. Compare that with Western Union, which charges over $10 for each cross-border transaction. Incidentally, Worldcore is also looking at introducing cash money transfers to compete with Western Union – it’s not just banks that are in the firing line.
Worldcore also takes full advantage of its CEE location, with most of the people involved on the technical side, such as programmers and developers, located in Nasonov’s hometown of Moscow, while the administrative and regulatory part of the business is located in the EU in Prague. “It’s much cheaper to operate a fintech company in Central Europe than say the United Kingdom, where salaries and everything else cost a few times more,” Nasonov explains. At the same time, he admits that given the newness of the fintech industry, there are not so many experienced professionals in this part of Europe.
Like a bank, but not
Like many in the fintech industry, Nasonov is dismissive of the banks and their prospects in this new age of digital financial services. “Banks are outdated, our solutions are like a smartphone, theirs is like a phone with buttons,” he quips. “I think that the banks’ share in the market of payments will decrease rapidly over the next few years because there are a lot of payment solutions that are different, better and cheaper, with much wider services package and no maintenance fees.”
The first to look elsewhere for payments services, he predicts, will be larger clients. “We plan to get integrated with SWIFT and SEPA and will start competing with banks on the cross-border transfers market even more than now. We will be able to offer much lower rates to institutional clients; 50-60 cents for EU bank transfers – no banks can offer such rates.”
But Worldcore’s ambitions go well beyond payments. Its licence in the Czech Republic currently allows it to make a full offer of payment services, but without taking deposits and offering loans. Worldcore is working on filling some of those blanks, however.
“We can’t take deposits and give out loans, but current European regulations allow us to offer investment opportunities through a crowdfunding platform, which is being developed, and peer-to-peer loans, so we can have a group of companies – with one for payments, another for loans, and another for investment crowdfunding. It will be almost the full set of services offered by banks,” says Nasonov, smiling. “That’s the plan for the next two years,” he says.