Innovation in Payments: Interview with Saud Aziz, Head of Strategy and Operations at Revolut

COVID-19 has massively accelerated the growth of e-commerce. What do innovation opportunities in Payments look like in post-COVID world? Highline Beta has put together a special report on payments innovation opportunities and trends — Crisis Manifesto: Innovation Opportunities in Payments post-COVID and interviewed companies Today, we talk with Saud Aziz, Head of Strategy and Operations at Revolut Canada about the future of payments post-COVID, and how to compete on UX and win new customers. Revolut is a UK-based fintech company offering banking services including a prepaid debit card, fee free currency , cryptocurrency exchange and peer-to-peer trading.

1. What existing trends have been accelerating in payments and why?

We’re an excellent product for remittance and have done very well through this period on that side. In terms of trends, e-commerce transactions have gone up and we’ve focused on helping our customers and users to feel empowered through this. We made it easier to shop online securely — single-use virtual disposable cards have been made free for all of our users, to help as much as we can.

Revolut hasn’t come to Canada yet, but we’ve  onboarded a few thousand users so far as part of our Beta program. One thing that keeps coming up for fintechs: it’s never been easier to open a bank account with fintechs and never been harder to do this with banks. 

2. You have been collecting amazing troves of data at Revolut What are some of the trends in consumer and business behavior that you’re seeing?

As a consumer, and especially during COVID-19, I’ve noticed in the finance space that the lack of automation in some of the more established companies is becoming more prominent. They’re not set up for scale, for remote work, for sudden spikes in customer management volume. FinTechs have solved this through chatbots and automated self-serve functionality, and that’s helping us all today. Incumbents have discovered that a reliance on brick-and-mortar service is now a liability. If I lost my bank card, I’d have to wait two weeks or go to a physical branch. At Revolut, we can get a new card to customers within 1-2 business days. We built our product to be seamless for the customers and this has stood the test of time. 

3. Startup collaborations with large companies: What role will creative collaborations between large and small players play in shaping the future of payments on the other side of the pandemic?

Medium-term established players are starting to rely on smaller ones for advice or outsourcing fintechs to help with onboarding things like know-your-customer solutions or customer support. For now, this will be outsourced but in the long-term these established players will have to figure out how to bring these services in-house. 

For fintechs, this is the time to prove yourself. There’s a clear need and willingness for consumers to try something new. Some of the fintechs will have to make sure they’re built for scale and have sustainable revenue models. Banks don’t need to worry about cash flow as much as fintechs which are focused on growth. We’ll have to change our strategies to bring profitability in the more near-term. Recent tech IPOs have brought this issue to the spotlight. Business fundamentals are more important than ever to startups now. Product-market fit is now on every VC deck, as is profitability. Dynamics and relationships with VCs are more of a partnership now. They have much closer relationships with companies.

4. What are you seeing when it comes to verticalization in payments? How do you think this will impact the state of payments in 2020 and beyond?

Our business offering has an open API and lots of accounting fintechs can work with us and integrate. In Canada, we don’t have one. You need a banking license, so in Canada we work with our partner People’s Trust to help us on the issuing side. Our ideal operating model is to do whatever we can ourselves. For premium products, we have partners offering device insurance, travel insurance, etc. In Canada, based on the product offering, the ‘perfect; customer for us is someone who has a need for a financial-friendly account, who is tech-focused and younger; who is international and has a need for using currencies outside of CAD. While we’re in beta, we’re focused on building out our product offering to be more friendly to everyday domestic users.

5.  What do you think the medium and long-term impact will be for the rest of 2020, and how should companies large and small prepare for the road ahead? Has Interac been impacted by COVID-19 and if yes, how? What kind of advice would you offer to the changemakers who are trying to push the industry forward?

For 2020 at Revolut, we’re in a beta stage, and the key goal is to gather consumer feedback. We’re collecting this now and iterating on our product to increase the offering vertically, offer different currencies for remittance and make sure we properly localise our product to meet Canadian needs. The goal is to make something new happen in this market. 

It’s an exciting time. Today, banks are trying to be tech forward. We’re a technology company focused on finance. If Revolut succeeds, big banks will succeed as well. The competition will drive innovation.

We can compete on the UX and properly localize our products. For example, we want to make it incredibly easy to open an account. It shouldn’t be something you couldn’t do on the spot: if you’re sitting in the park and decide to open an account, you shouldn’t have to go home and look for documents and provide extra information. 

The payment services directive has been a strong proponent for fintechs in the UK allowing payment companies to hold deposits and issue cards. This framework has been successful in the UK and we would like to see something similar go live in Canada.

Steve Jobs invented features to meet consumer needs that they didn’t yet know they had. That’s the approach we  want to take. In 2015, we launched the ability to lock Revolut cards from the app and only recently bigger Canadian financial institutions introduced this feature. This was especially useful for COVID-19. I never use ATMs or cash much after COVID and can click on my card at Revolut and turn off ATM access. This is industry-leading security from the user perspective. If you put the user at the heart of your company, you’ll be well ahead of the market. 

The future of success on the other side of the pandemic will rely on a willingness to embrace strategic alliances, listen to new consumer needs and act decisively in uncertain times. Please read the full Crisis Manifesto: Innovation Opportunities in Payments post-COVID report here.