Today’s profile is from Rich Wagner from Advanced Payment Solutions (APS).
APS is an alternative provider to traditional banks, providing access to fair and transparent banking services via its digital current account service to consumers, SMEs and the public sector.
Let’s get on with the profile. Our questions are in bold.
Who are you and what’s your background?
Before setting up APS back in 2004, I worked at both Barclaycard and Visa, racking up 30 years’ experience in the UK and US payments industry. I became very aware that the banking industry does not meet the needs of every person, and, eager to solve this problem, I launched APS.
In the wider industry, I am also determined to push for fair access to financial systems for non-traditional FinTech players. As an Advisory Board Member of the Emerging Payments Association, I am currently lobbying to open up systems, such as Faster Payments and BACS to non-traditional banks. Currently, alternative financial service providers are still chained to the infrastructure of the UK’s major banks, meaning that newer players cannot flourish on their own.
What is your job title and what are your general responsibilities?
I am the CEO and Founder of Advanced Payments Solutions (APS) and CEO of our subsidiary company APS Financial (AFL). First and foremost I am thinking everyday about how to continue our superior growth in leveraging a strong UX and customer experience in every activity they do with us. I also look for gaps in the industry that customers demand but are not offered by alternative banking providers like us, to ultimately become the innovations champion for the company to drive these to completion. As a regulated entity I also ensure a strong competency in regulatory compliance.
Can you give us an overview of your business?
APS is a leading challenger to the banks, offering alternative banking and payments solutions for consumers, SMEs and public sector organisations who are security conscious, short on time or funds, need to complement existing accounts or are fed up with traditional bank services. We are the most awarded alternative banking solutions provider in Europe and one of the most successful e-money businesses, with over 1.2 million Cashplus cards issued and more than £3 billion in payments processed.
Tell us how you are funded.
We received £7.4 million from Trident Capital, a Silicon Valley venture and growth fund in 2005 to start the business. They have been with us since launch and have been a great partner ever since.
Why did you start the company? To solve what problems?
When I started APS, my main goal was to meet the needs of the unbanked and underbanked but expanded quickly to solve banking issues even for the traditionally banked. We are in a situation whereby the banking sector does not meet the needs of every person. I have faced many barriers; I had trouble in securing a company bank account when I started APS and even after securing £7 million worth of funding, I was still unable to secure a company credit card! It’s these first-hand experiences that make me determined to solve the problems that are inherent in the current banking system.
We are dedicated to levelling the playing field between banks and alternative FinTech providers like ourselves, to provide a fair and transparent banking system for every person. I fought to become the first non-bank issuer to gain MasterCard membership in 2007, we were the first to implement a general purpose prepaid card in the UK and we were also the first to create a reload network via the UK Post Office. This ultimately expanded to a full Banking Service at these branch counters which was another first within the industry for a non-bank player.
Who are your target customers? What’s your revenue model?
APS essentially aim to meet the banking needs of three core groups of customers:
As my experience has shown, small businesses are regularly denied even basic banking services, such as a current account. This is down to the nature of the banking system. If a bank is unable to find a way to make a customer profitable, normally via loans or overdrafts, they won’t entertain the idea of helping them. This serves as a huge barrier for SMEs setting up shop, particularly if they have no trading history. Instead, we allow small business owners to set up a digital account within minutes, regardless of their credit history, which allows them to start accepting and sending payments that day. Currently, more than 1500 SMEs come to APS to gain access to our alternative banking option, Cashplus.
We also help consumers gain access to fair and transparent banking services. We can offer individual access to a Cashplus card using our bespoke technology and experienced management team. With our depth of credit experience APS has also been driving innovative ways to provide customer credit via standard overdrafts and credit cards, but in ways that allow customers to remain in control by targeting these products only to those that are prequalified and can afford to take out credit in a responsible way. To date, we have issued over 1.3 million Cashplus cards.
APS’ public sector clients rely heavily on our service to support the distribution of social care allowances to thousands of benefits recipients. We are currently in 1 in 5 local councils, and handle over £180 million worth of benefits payments annually.
At APS, we are very open in the sense that do have a fee for having a Cashplus account and we don’t sneak in extra unexpected costs. When it comes to overdrafts, instead of sending a customer a bill for exceeding this, we instead let the customer choose how they want their money to be managed. We only let customers go over their limit if they specifically request to be able to – we don’t want to force indebtedness upon those who wish to avoid it. Further to this, even if a customer who has requested this option is about to exceed their limit, we actively contact them to let them know, leaving them in complete control of their relationship with us.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
Competition and innovation needs to be made a priority for the payments sector. Whilst the launch of the Payments System Regulator this year aims to open up the UK payments infrastructure, there are many other inefficiencies that need to be addressed for this to truly be achieved. If we are to truly cut the reins of the country’s biggest banks and allow new players to operate on their own, alternative payments players need direct access to clearing and settlement systems at a fair price. Only this will result in a truly diverse industry that is able to respond to the needs of the customer.
What is your message for the larger players in the Finance industry?
Don’t be afraid to embrace alternative financial services! Earlier in the year we became the first FinTech player to link up with the Post Office – a much needed move to level the playing field between the banks and alternative FinTech providers. Now, APS’ Cashplus customers are be able to carry out real-time banking processes in this well-known establishment, truly putting the customers’ needs first. It is a significant milestone to have pushed this through, not just for APS as the first non-bank to link up with the Post Office, but for the whole FinTech industry. Now that the infrastructure is in place, other non-bank alternatives will be able to collaborate with the Post Office.
What phone are you carrying and why?
I carry a Samsung 5. Primarily I like the design and features, but most notably this was first branded phone with NFC to allow me to use it directly for mobile payment at a retail point of sale. It’s a cool solution to pay at sandwich shops and even the underground. I’m typically an early adopter to all things that revolve around payments so it was my main reason for the selection of this type of phone.
Where do you get your industry news from?
I mostly get my news through digital mediums, especially for my work. I set up Google alerts for topics I’m specifically interested in, and I am registered to digital outlets such as Finextra, PYMNTS.com and blogs such as the Financial Services Club chaired by Chris Skinner.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Anna Irrera of Financial News – @airrera
Chris Skinner at the Financial Services Club – @Chris_Skinner
Brett King author and founder of Moven – @brettking
What’s the best FinTech product or service you’ve seen recently?
I haven’t seen one that jumps out – maybe this is the reason I like being in the FinTech space. Not to be self-serving but the APS business solution for online acquisition is by far a leading FinTech solution giving a SME a bank account with seconds of sign up. No digital bank or high street bank comes close.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Reduction in interchange will transform how banks make money. How banks and card issuers respond will create a new ‘norm’ for consumers. Reward programmes on cards will become extinct and likely customers will be charged for the use of a credit card (not the other way around).
I also believe in niche banking for millennials and beyond. Customers will no longer have one bank account. I believe that the customer will have many and will choose the provider that does a particular payment activity the best. Key niche’ solutions will emerge in bill payment, online purchase (beyond PayPal), travel, and even a niche solution for currency exchange (like Transferwise).
If you’ve any suggestions for other hot FinTech companies (startup, or established ventures) that we should be profiling, I’m all ears. Don’t hesitate to drop me a note at email@example.com. There’s more information on this page.