Pulse

Retail: the future of payment processing

By Lewis - 4 September 2019

G3 interviews OKTO’s new recruit, Simon Dorsen, about the future direction of retail payment processing and the innovative solutions the Greece-based company is bringing to market

OKTO is a relatively new FinTech that’s been in existence for just over a year, having spun out from the Greek technology company, NetLink, an established business that currently operates 30 per cent of the POS network in Greece. NetLink services 5,000 points of sale across convenience locations in Greece, tobacconists and service stations, etc., enabling customers to pay their bills, top-up mobile phones and perform a range of cash and digital transactions. As the second largest provider in the market, NetLink will process around €200m in transactions this year. NetLink was established in 2003, developing its own transaction solutions. Born from such innovation, OKTO is NetLink’s FinTech division focused on mobile transactions and solutions across retail, banking, real estate and gaming.

The OKTO team, headed by Filippos Antonopoulos, the founder and CEO of Vermantia, has been developing its mobile wallet solution and underlying technology for 18 months, backed by the established NetLink business and significant experience within its domestic market. Simple to understand, the company’s bespoke 360 cashless payment environment is designed for the mobile world, connecting online and retail platforms through smartphone technology, while its offering comprises digital banking, mobile payment and retail solutions, as well as cashless gaming.
The online payments sector is extremely busy, competitive and crowded, however, the OKTO team believe that not enough focus has been placed on the digitisation of the retail player. OKTO’s view is that while players and customers conduct their lives on their mobile, the ability to utilise payments across retail and digital betting and gaming environments remain limited.

Speaking to OKTO’s newly appointed Director of Gaming, Simon Dorsen, he believes that OKTO’s mobile wallet App is aligned with players evolving demands. “Digital payments are growing globally at 10 per cent every year, with European mobile payments currently accounting for 54 per cent of digital payments,” described Mr. Dorsen of the current payments landscape.

“Consumers have shown their desire to conduct their payment transactions via mobile and gaming operators need to follow suit and offer retail players a complete digital payments journey. At OKTO, we are all very aware that increased regulation and financial restrictions around AML is causing massive disruption to traditional payment models.”
According to OKTO, retail gaming operators need to look at ways to onboard players and efficiently manage KYC. “The most important part of the equation is the on-boarding of the player as part of their retail journey,” underlined Mr. Dorsen. “OKTO is at its heart a customer engagement company and offers smooth solutions for operators which need to overcome traditional hurdles in offering a seamless customer journey.”

Another hurdle OKTO is addressing is attracting the next generation of player. Its solution appeals to the demographic who want an entirely paperless experience where they can place bets and receive betting receipts on their phones, just like mobile flight board passes have now become the norm. This approach, according to Mr. Dorsen, provides another channel of interactivity through which operators can drive player engagement. “The OKTO solution takes players on a journey and gives customers a better experience,” explains Mr. Dorsen, whose own experience in land-based retail is crucial to selling this solution to retail operators. “The similarities between a mobile-first App solution and the revolution created by TITO (ticket-in, ticket-out) over a decade ago is striking. Back then we were told that players would not accept the noiseless environment created by ticketing, that instead they preferred the “romance and nostalgia” of coins. However, the reality was that TITO provided a better experience for the player and operational benefits for the operator. The rest is history.”

When operating with cards and cash, the pay-in and pay-out process naturally incurs transaction costs. And while the costs of card transactions are well documented, there are also hidden costs attributed to cash, with such transactions becoming increasingly expensive and difficult for retailers to absorb. However, digital solutions cab greatly reduce those transaction costs. “Operators have shown their desire to move to a true cashless solution, an ecosystem in which the flow of customer cash is frictionless until the point of payout,” commented Mr. Dorsen. “Talking to operators, they have shown a strong desire and focus to address the large amounts of paper and tickets circulating within their locations and optimise the retail estate.”
The reception given to new technology entering the retail sector can optimistically be described as mixed, but Mr. Dorsen has been impressed by the initial feedback from operators. “Operators have recognised that this is a very dynamic environment in which they must work with fast moving innovative companies, they understand the journey and the need for a mobile-first solution,” stated Mr. Dorsen.

“We want to partner with key customers in key geographies, working collaboratively to address specific needs and ultimately building country-specific ecosystems that can be used by everyone.” Mr. Dorsen said that in seeking aggressive growth, OKTO has established country-based strategies and will employ local teams to support those key geographies.

“We are relatively new, but we are also mature in our thinking about what is needed in this sector. OKTO isn’t a start-up, it’s building on the success of NetLink, a company with a strong understanding of the market and the experience needed to be successful.”