When things get really Sexy…

Q:  What is more sexy than Emerging Payments?  What is more sexy than Big Data ?

A: When both of these collide.

I had the real privilege a few weeks back to have a conversation with Charles Fraenkl, former CEO of Click & Buy and now a guru and investor in the emerging payments space. He was flat out as normal, but was kind enough to give me an hour of his time at the airport. And I made the most of it … as he talked me through what makes a successful payments business and how to increase capital value, something he has done many times and a topic I am interested in. His insight was exceptional, but it was towards the end of the conversation when he got me truly hooked. I asked what we should be on the look-out for as the next big thing in payments and he replied with one thing: “data driven models and risk profiling using big data”.  So I took a look.

I found Klarna – which I am now a HUGE fan of. They are a great example of a company using big data to provide their merchant clients with knowledge of their customers around risk. Their service, in turn, has allowed their client merchants the ability to offer their customers ‘pay when you receive the goods’, rather than ‘pay before you receive the goods’, shifting the risk to the merchant rather than the buyer. Too risky for the merchant? Actually no, because it’s only offered to people with the right risk profile and that profile is now much richer and accurate than before. Klarna is seven years old, with its principal business in Scandinavia, with a capital value of €800m. That’s not bad business.

It has now got me thinking as I know a bit about Big Data and emerging payments. And combining that with what I know about social media and how to raise funds… we’ll see…

– Sid

Andrew Salmon