Page 35 - gs250702

Insights and Expertise

flow of transactional activity that aligns with known but their infrastructure is clearly not ready to handle this
merchant profiles and user behaviors. Pricing must strike volume (for example, having one customer service agent
a balance between commercial logic and operational on payroll or having no IT costs budgeted in the plan),
practicality to avoid raising internal red flags during the the logical answer is always a no. Planning big for the
application review process. future but not creating the necessary, basic environment
to support growth when success hits is one of the main
Marketing reasons why startups fail.
Banks and payment providers are also looking at the Understanding the risk
marketing plans, not in the typical sense of branding and
design, but to see if the go-to-market strategy is realistic Just because something is legal does not mean that the
enough to generate quick profitability and target the right bank or payment provider wants to work with it. The
customers. The marketing plan has to clearly show how world has changed: banks and payment providers are
clients will be acquired, from which countries, how much no longer fighting to take a startup’s business, but quite
this will cost, what channels will be used and what type the opposite. Startups must secure the most reliable, cost-
of traction can be expected from it. effective and technologically sound solution that fits their
unique and individual business requirements.
More often than not, startups are overly optimistic, and
their marketing numbers are inflated without any realistic Banks and payment providers always evaluate the risk
foundation. Not understanding even the basics of the the business brings to them against the possible benefits
incoming flows and therefore banking risks only means they yield from the cooperation. Being a startup in this
compliance red flags and will result in either rejection or evaluation process is definitely a handicap.
increased fees with worse terms and conditions.
Payment and banking strategy, a must from day one
Business activity
Millions of great ideas and products are everywhere.
Perhaps the most important part in a business plan is the The devil, however, always lies in the details. Payment
description of the business activity, as this determines the and banking today impact customer experience, risk
risk. This is where everything starts or ends. The business management, technology, product development, data
activity and all related revenues must be clearly explained security, compliance, finance and more. It should be
in a way that leaves no room for misunderstanding or considered a standalone function, an essential element of
compliance concerns. Unfortunately, this is where many the business strategy, not just a part of finance.
startups go wrong, mainly when they have an innovative
product. Having a solid payment and banking strategy from day
one will not only improve the chances of being accepted
Even if the activity is legally allowed without a license, by banks and payment providers but will also save
banks and payment service providers are private significant time, cost and reputational damage in the long
institutions, so they have every right to deny working with term. But balancing these co-dependent factors requires
the business if there is no proof that even the opportunity specific skills and specialized expertise.
of money laundering, tax evasion or criminal activities
has been eliminated with the business setup. Relying on banks and payment providers to advise
independently on what is best for the company would be
If there is a slight opportunity from a payment and like expecting a fox to guard the henhouse: a sales-driven
banking perspective that something can go wrong, plus organization cannot act against its own interest and
the business has no previous track record to prove it will prioritize yours instead.
be handled well, this will lead to rejection.
It does not cost much to set things up properly from
Payment providers have the utmost goal to defend their the start, but it can cost a lot more to fix everything in
own business, even if this means they will not onboard firefighting mode when things start to go wrong.
a new client, thinking “I do not know this business, I do
not trust it, I would rather not work with it, because I am Viktoria Soltesz is the CEO and founder of PSP Angels and The Soltesz
not going to risk my whole operation to gain a new client.”
Institute. She is a leading advocate for strategy-led financial operations,
Scalability ethical industry practices, and structured education in an area too often
overlooked in traditional business training. PSP Angels is a globally
Evaluating scalability is also a very subjective yet very awarded, independent payment and banking consultancy that has sup-
important part of the process. Providers want to see if the ported over 1,000 companies in building scalable, secure financial infra-
startup’s idea, legal setup, risk assessment and technology structures. The Soltesz Institute is the first and only independent online
can all scale well to lead the company to success. If organization offering EU-accredited training and certifications focused
the business plan suggests that the business might be exclusively on payments and banking. To contact Viktoria, please email
handling 100,000 transactions per day in the near future,
viktoria@pspangels.com.
35