FinTechs and Others Look to Build Their Own Payment Processing Infrastructure

When a bank becomes a principal member in the credit card industry, that doesn’t necessarily mean it’s ready to start issuing cards and processing transactions. Instead, that designation is like a driver’s license.

You may have a driver’s license, but you still need a car, fuel and roads before you can drive. Similarly, a principal member needs a payment processing infrastructure.

That’s how Marvin Blazhevski, CEO and founder of SEPA Cyber Technologies, described his company’s role. The FinTech not only enables credit card processing, but also builds, maintains and enhances any kind of payment processing platform and technology.

“Here is where we come into the field,” Blazhevski said. “Yes, we also have very big banks as clients, but where the innovation is coming is basically that you do not only change the front, but also the core.”

Growing Demand for Payment Processing Infrastructure

The need for such services is growing, he said.

At the beginning, most FinTechs were building a new front end, but they were borrowing a license from a bank and connecting through an application programming interface (API) to an infrastructure that the bank had purchased from a legacy processing giant.

When FinTechs get big enough to be regulated and become banks themselves, they’re often still stuck using the core processing, intelligence, governance, security and other assets that belong to the other bank. What’s more, that bank is profiting off of their work.

“We have a totally different approach,” Blazhevski said. “We are not profiting from the financial service provided to the end user. We are only a tech company, we know where our place is, and we are enabling all these young FinTechs out there and also big companies that would like to step into the payment industry, that would like to set up Visa product or card products, to participate in the payment processing ecosystem.”

Using a SEPA platform enables companies to go for a Visa membership, for example, with a bank license of its own or with a principal member that does not own the infrastructure.

Cooperating on Exciting Projects in Crypto

SEPA Cyber Technologies turned four this month. Since it has been in operation, the company has seen that its customers have similar service needs: simplicity, time to market and flexibility to operate the system without having to wait months to add a new feature. At the same time, though, no two projects are the same.

“We’re very open to communicate and to brainstorm solutions that are even just an idea,” Blazhevski said. “The most exciting projects are always the projects where someone is coming in saying, ‘I have an idea, I have the needed budget for it and I would like to realize it.’”

Big topics recently have been around blockchain, crypto, stablecoins, smart contracts and non-fungible tokens (NFTs). While its core field is classic regulated technology, SEPA Cyber Technologies has clients that are crypto exchanges, FinTechs that have integrated crypto and classic banks that have integrated crypto.

“Over 40% of our requests in the last month were actually always related to crypto,” Blazhevski said. “So, we’re looking forward to work on very exciting projects.”