In this installment of the Challengers series, Rodolfo Passeri spoke with Ralph Rogge, CEO and Co-founder at Crezco, a free open banking payment solution designed for online invoice payments. Crezco's checkout solution initiates bank-to-bank transfers seamlessly and securely for the customers, allowing funds to arrive in the seller's bank account in seconds, without fees. Ralph and Rodolfo touched on various topics, including the key trends in FinTech, Open Banking, BNPL, and much more!
Ralph, could you introduce yourself to our audience and tell us what made you start Crezco? What does Crezco do exactly, for our readers who are not so familiar?
Ralph Rogge, CEO and co-founder.
I remember paying invoices at my last company. The difference in convenience between contactless card payments for coffees in the morning and invoice payments later in the day was shocking. Why does the difference exist?
Card payments are expensive for receiving merchants, slow to process, and subject to fraud, such as chargebacks. Still, they are accepted by consumer-facing businesses (B2C) due to the increased convenience at checkout. Business facing businesses (B2B) aren’t willing to accept these costs, so payments are processed manually 30 days later (or worse) and remain subject to human error and inertia.
My co-founder and I saw open banking as an opportunity to provide B2B invoice payments with the same level of convenience as B2C card payments while bypassing the costs associated with cards. Our solution, which is free for both merchants and buyers, securely facilitates instant settlements up to £250,000.
Where do you see Crezco going into the future? And what differentiates it compared to its competitors?
It depends on who the competition is. Nonetheless, we aim to be the most convenient and product-focused company. This means prioritizing customers first and placing everything else as secondary. If this is too philosophical, we’re also free!
As to our future, it’s a combination of expanding the markets in which we operate and the products we offer. We have recurring payments working in beta, and we are working on an FX product for international payments to bypass the corresponding banking system, just as we have already bypassed the card schemes.
What do you think is the future of Open Banking?
What does the CEO of a gas plant think about the future of fossil fuels? My thoughts cannot be viewed objectively, but I believe them. Open banking is in its infancy. The number of open banking markets will increase every year, and the number of open banking products will increase too. It’s a cartesian graph, with markets on the y-axes and products on the x-axes, and we’re heading top-right, but we’re positioned bottom-left.
Open Banking is a hot topic globally right now; what do you think is the next big trend in FinTech?
I’m excited to see how (if) crypto-currencies can migrate from a store-of-value to a medium-of-exchange.
Many FinTech companies claim they use AI, but few do. The majority don’t have sufficiently reliable or readable data (something open banking can help with). Yesterday these companies showed no awareness of the most simple statistical models, but today they’re websites advertise how they’re beating the Turing Test...
Still, the machine-learning algorithms are cool and employed appropriately in other industries. I think the insurance industry would benefit most from AI and is in desperate need of radical disruption.
What are your thoughts on BNPL? While many believe it enables increased financial freedom, a growing audience also thinks it encourages predatory lending?
BNPL for businesses is working capital; for consumers, it’s just debt. When a company borrows, it ought to be value-appreciative. Excluding mortgages and a few anomalies, when consumers borrow, they buy depreciating goods. Most of Klarna’s users are under 36, and over 90% of transactions concern fashion and footwear. A B2B BNPL basket would look very different. It’s an investment, not a consumer purchase. But, of course, thoughts are likely dictated by your views on Libertarianism, and this is the nation of John Locke, Adam Smith, and John Stuart Mill.
What podcasts are currently in your playlist, and are any interesting FinTechs you’re using?
The “BBC Radio 4: In Our Time” series. Plenty of great men and women in history to learn from. As to fintech, I genuinely enjoy paying via Crezco; it’s super convenient and saves loads of time.
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