Founded in 2014 by Stefan Haenel, Jens Podewski and Michael Kramer, FinXP was originally known as Paymentworld Europe. Offering payment solutions like credit card processing and SEPA Direct Debit, which is a core competency of the company, Paymentworld focused primarily on ecommerce and the iGaming industry.
As the years progressed, the company expanded target verticals and diversified its product portfolio, such as by introducing IBAN4U, a Euro IBAN account, in 2018. This was originally offered exclusively to corporations until it grew to include select customers such as performers.
We are most excited about our upcoming cross-border payment solution, which includes 125 countries and payouts to bank accounts, Visa, Mastercard, China Union, mobile phone wallets, payment wallets and cash outlets.
The company considers IBAN4U to be its flagship product, and is investing heavily in that product vertical to ensure its offering is competitive in the marketplace. For example, in 2020, Paymentworld implemented Oracle Flexcube, a core banking system, and a year later the company became a principal member of Mastercard, enabling it to issue debit cards and prepaid cards linked to IBAN4U accounts.
In 2021, as business continued to grow and level-up, the company executed a complete rebrand and renamed itself FinXP, to emphasize the added value of its financial expertise. Today, the FinXP group has grown to around 40 employees, with offices in Germany, Malta, Cyprus and Lithuania.
XBIZ sat down with Haenel to discuss his company’s milestones, successes and plans for the coming year.
XBIZ: What is your overall marketing approach to recruiting new clients?
HAENEL: A lot of our business is generated through word of mouth. We believe this is testament to the quality of our services and how we treat our clients and partners. Building strong relationships with the people we work with is paramount to our success and this is partly why we are now promoting the company more actively at industry events, where we can engage in face-to-face communication with stakeholders.
This year, apart from XBIZ Berlin, we also took part in major expos in the iGaming and crypto spaces, which are both key verticals for FinXP alongside adult entertainment. Beyond exhibiting at events, branding plays an important role in our marketing. Having a well-executed brand is key for clients to trust us with their payments strategy, and that’s why we are investing in public relations, publishing standout ads and why we are establishing ourselves as thought leaders in the payments and banking space.
XBIZ: And how do you ensure long-term retention of clients?
HAENEL: Payments and banking are by nature very sticky products. As long as our systems are reliable, our customer service is responsive and our pricing continues to be competitive, then it is unlikely that a client would stop using our services. With that said, we are always looking for new ways to add value for our clients. This year we have given our clients the opportunity to link a FinXP-issued debit Mastercard to their IBAN4U account at no extra charge. In the coming months we are expanding support for SEPA Instant Credit Transfer, and this year we are also working on providing our own mobile banking app. As a co-founder, I believe this constant drive to find new ways to add value is one of the reasons behind the company’s success over the years.
XBIZ: Give us the elevator pitch for why a merchant should choose FinXP for payment and banking services.
HAENEL: FinXP stands out on multiple levels. We increasingly see ourselves as a one-stop shop for a company’s payment and banking needs. Many companies in our space offer either payment processing or merchant accounts. We offer both, which means that customers save time because they only need to apply and communicate with one company. Furthermore, working with just one provider means that clients can negotiate better rates because their transaction processing volume isn’t divided amongst several payment providers.
Another important advantage of FinXP is that clients benefit from working with experts who have decades of experience in the financial services industry and in high-risk industries. This expertise translates to FinXP being a well-respected and trusted brand in the fintech industry, one that provides clients with peace of mind that they are being served by a reliable firm that practices good governance. Nowadays, this cannot be taken for granted.
On more of a product level, if we had to focus on IBAN4U, a major differentiator between FinXP and many other industry players is that clients are able to open accounts directly with us, without any intermediary banks involved. This means that no other bank can force us to close or freeze client accounts. Many other payment companies offer their services through white-labeled banking solutions, which means they do not have complete control over which customers they can onboard and keep. This is not an issue with FinXP, and it is a major benefit for our clients.
XBIZ: What unique EU considerations might U.S. industry players not be aware of, that FinXP is uniquely positioned to address?
HAENEL: In Europe, the payments industry is quite fragmented. As a result, different countries have different preferences when it comes to how they like to pay. Because of our experience with the different payment preferences in various European countries, we are well-positioned to advise merchants on which payment methods they should be offering customers when entering national markets inside of Europe. For example, the payment methods used in Germany are different from those used in Greece. Offering the wrong payment methods adversely affects your checkout conversion rates, and hence sales. That’s why it’s so important to work with experts who can advise you on your payment strategy and how to optimize it.
XBIZ: Discuss which business trends you are most actively staying ahead of the curve on.
HAENEL: In short, the answer is instant payments, cross-border payments and account-to-account transfers. There are a lot of developments happening in all of these areas, but really and truly, regardless of the above trends, ultimately the goal is always to make payments as seamless, reliable and affordable as possible. That hasn’t changed over the years and so whatever the trends are, achieving these three objectives will remain key.
XBIZ: What technological innovations are you most proud of having introduced?
HAENEL: One of the most important solutions that we have recently rolled out is our B2B2C offering that allows platforms to make instant, cross-border payments to their users. So for example, using our service, a cam site can arrange for instant payouts to their performers. We have been first-to-market with this innovation and we’re happy to say that it is garnering a lot of attention from many big industry players.
We are most excited about our upcoming cross-border payment solution, which includes 125 countries and payouts to bank accounts, Visa, Mastercard, China Union, mobile phone wallets, payment wallets and cash outlets. More information to follow in the coming months.
XBIZ: Which of your primary products, which range from SEPA Direct Debit to IBAN4U, is projected to grow fastest?
HAENEL: SEPA Direct Debit has been a very important part of our business over the years because it was one of the first services that we offered. However, now IBAN4U has grown to become our flagship service, used by thousands of customers. The fact is that banking is a major pain point for many companies operating in high-risk industries such as adult entertainment, and we happen to have a really great solution.
Furthermore, we’re investing heavily in IBAN4U, year after year, so that we can continue to offer a leading product in the market. For example, this year we introduced the XP White, which is a debit card linked to the customer’s IBAN4U account, and we offered each account holder a free card so they can more easily make use of the funds in their account. Next year, we have more new features planned.
XBIZ: What are your company’s biggest goals for 2023 and beyond?
HAENEL: Next year is going to be FinXP’s ninth year and without a doubt it’s going to be a very interesting one. On the one hand, there is the economic downturn in the U.S. and EU, and it’s still unclear how this will affect the industries that we serve. Regardless, we do have our eyes on strengthening our presence in certain areas, such as the Baltic region, as well as in some countries outside of Europe. Needless to say, we have a whole road map planned out that includes launching new features to existing products, and also new payment products that will help differentiate us in the fintech industry.
Even though the company has a growth mindset and it is conquering new ground, increasing our market share in the industries that we already serve is just as important. Speaking specifically about adult, with the deals that we are already discussing behind closed doors, I am very confident that in 2023 our market penetration and brand awareness is going to be bigger and better than ever before.