Paul Stoddart, President at GoCardless, shares insights from his nearly 30-year career in FinTech, payments and financial services. In this interview, he discusses key milestones that have shaped his journey, the recent acquisition of Nuapay by GoCardless, and his vision for the future of bank payments and FinTech innovation.
You’ve had an illustrious career journey in FinTech. Could you share some key milestones or experiences that have contributed to your growth within the FinTech sector, particularly your role at GoCardless?
It makes me feel old to say this, but I’m closing in on 30 years in FinTech, payments and financial services. When I started, I never imagined that the industry would be as dynamic or exciting as it’s turned out to be.
In terms of key milestones or experiences that have led me to GoCardless, the first is international experience. I’ve had the privilege of working in nearly every region of the world over the past three decades. One thing I’ve learnt is, no business can expand internationally without achieving true product-market fit in each location. This is what we’re focusing on at GoCardless; the priority is to get competitive in each of our main markets by investing in our technology and people – we have to be at least as good as the local leading provider.
The second is my background in payments. A combination of WorldPay, Barclaycard, Vocalink and Mastercard, before I joined GoCardless – I would like to think – means I understand the payments industry. In particular, bank or account to account payments are growing faster now than they have ever before, and this is within a wider industry that is already red-hot. GoCardless is at the forefront of bank payments and I’m excited to be part of it. It’s not every day you get to build a new type of payment network that will rival the Visas and Mastercards of the world, but that’s what we aim to do.
As someone deeply entrenched in the FinTech landscape, what are some of the most pressing challenges you’ve faced in your career, and how have you navigated through them, especially in light of the recent acquisition of Nuapay by GoCardless?
When you’ve been around as long as I have, you’ve seen pretty much every kind of challenge. Some are perennial, such as how to scale without significantly increasing your costs. Others are cyclical, such as how to thrive in the face of tough macroeconomic conditions. In each scenario, I’ve found that proactive and open-minded companies come out on top. These are businesses that anticipate – or at least recognise very early on because they have invested in a combination of smarts and experience – that the world around them is changing and they need to adapt, fast. These organisations are also open to organic or inorganic growth, though they are exceptionally disciplined in the latter. This means only engaging in M&A if the transaction is very clearly aligned with their strategy and having a good integration plan.
At GoCardless we recognised a few years ago that the clock was ticking on the low-interest rate environment, and that growth at all costs would not be the metric upon which start-ups would be judged. We acted quickly to rationalise our activities and only focus on the most impactful parts of the business, the areas where we have a competitive advantage. We also looked at different ways to accelerate our growth including M&A. Our latest acquisition is Nuapay, will help us scale the channels that are currently working really well for us, in addition to adding new capabilities that would have taken us longer and cost more to build.
The recent acquisition of Nuapay by GoCardless seems poised to significantly impact the payments industry. Could you elaborate on how this acquisition aligns with GoCardless’ strategic vision and enhances its position in the market?
We’re really excited about the Nuapay acquisition and we’re confident that it’ll accelerate the execution of our strategy.
The acquisition will create a full-service bank payment provider: one that can collect and pay out across more than 30 countries, offering instant and standard payment timings and leveraging open banking to enhance and improve the overall merchant and end-customer experience.
The deal also strengthens our indirect channel proposition. This is the channel where we provide the best of GoCardless through our network of over 350 partners. It includes GoCardless Embed, our white-labelled product which enables other payment service providers (PSPs) to offer our bank payments to the thousands of customers they serve. Acquiring Nuapay will accelerate our investment and growth in this critical part of our business.
In addition, by incorporating Nuapay’s offering into our bank payment platform, we will fast-track the rollout of disbursements to our customers and prospects. This means we can unlock new industry verticals and use cases in areas including insurance, savings and investments, payroll, utilities, gaming and gambling.
With the emergence of technologies like open banking and real-time payments, how do you foresee the landscape of bank payments evolving in the near future, and what role do you see GoCardless playing in driving innovation within this space?
According to a recent McKinsey report, the global payments market is now worth $2.2 trillion, with projected growth of more than 7% per year over the next few years. Much of that will be driven by real-time payments.
As a company that has specialised in bank payments for 10 years, GoCardless is in a prime position to drive this once-in-a-generation transformation. We’ve spent a decade moving money directly from one bank account to another and making bank debit fit for the digital age. We’re also in the process of building the world’s bank payment network, so adding open banking and other forms of A2A real-time payments to sit alongside our bank debit capabilities is a natural next step.
Because new technology takes time to get traction, in my experience about 7-10 years, especially ones such as open banking which require a lot of stakeholders to align and move in the same direction, we have a distinct advantage over our competitors. We generate a healthy level of revenue today with consistent good growth across all our markets through our core business; we don’t need to wait for new technology to mature before we can become profitable and we can insulate our customers from innovation risks.
GoCardless has established partnerships with over 350 companies, including high-profile brands like Xero and Salesforce. How do you envision these partnerships evolving post-acquisition, and what opportunities do you see for further collaboration within the FinTech ecosystem?
The Nuapay acquisition will strengthen and significantly scale our indirect channel proposition. We believe it will consolidate our position as a key payment provider to existing and new customer segments including Independent Software Vendors (ISVs) and PSPs.
The deal caps off a solid 12 months of growth within our indirect business, during which we renewed and extended relationships with strategic partners such as Xero, Intuit and Chargebee as well as signing new customers like Ecommpay, which recently launched bank payments in the UK and Europe through GoCardless Embed.
We know that businesses like to have payments embedded into the platforms they use every day, so we’re always open to more partnerships.
As GoCardless expands its footprint across more than 30 countries, what are some of the unique challenges and opportunities you anticipate in scaling the business internationally, particularly in regions with diverse regulatory environments?
In terms of challenges, we need to find product-market fit in each market. Making our proposition compelling in, say, the US where cards are still dominant is very different to deepening our footprint in Europe where bank debit is a trusted and preferred way to pay. We need to make our value-add so obvious that choosing GoCardless is a no-brainer.
While it’s true that different geographies have different regulatory requirements, we have strong relationships in all of our markets. We participate in numerous regulatory and industry working groups, from those on Variable Recurring Payments in the UK to real-time payments in the US. We’re proud to use our seat at the table to advocate for our customers.
We see plenty of upside as we scale. As B2B payments become fully digitised, there will be even more demand for services like ours. And if the cost of living and the cost of doing business continue to bite, getting paid on time will become more important than ever.
We’ve made great progress over the past few years, focusing on what makes a difference, the expansion of our most cost-effective channels, the investment into new product capabilities such as open banking and the Nuapay acquisition. We are now ‘fighting fit’ and ready to make the most of the opportunities in front of us.