In July the Open Banking Excellence evening focused on the opportunities Open Banking can and will afford to the Prepaid community. Our fellow OBE steering committee member Tatyana Marsh, Head of Communications at Centtrip, stepped up to the mic and shared the illuminating Centtrip story of keeping rock stars on the road and super yachts sailing the seas...
Who is Centtrip? A little introduction:
Centtrip is a treasury management, payments and foreign exchange fintech based here in London that serves a variety of SME and corporate clients and has a couple of particular niches where it has built large dedicated client bases. These include corporate, music, marine, film, TV and the wider entertainment industries.
The company was founded in 2013 and launched publicly in 2014 by entrepreneurs who had previously run a foreign exchange brokerage and it started by providing SMEs with market-leading currency conversion tools, under the banner of trust and transparency. We quickly realised though that FX was not a stand-alone task but part of intelligent treasury management. Today, Centtrip offers a range of treasury services to clients, including an award-winning multi-currency prepaid card.
My job is the head of comms, so it’s my responsibility to trumpet the achievements and success of the company. Don’t worry though I won’t blow our horn too loudly – I will instead restrict my comments to our topic of prepaid.
Centtrip multi-currency card
As mentioned, Centtrip introduced a multi-currency prepaid card five years ago and it’s been a huge success. With that experience I wanted to share with you a couple of things we have learnt, tell you some ways in which our clients use it in their businesses, so you can get a sense of practical applications, and discuss its relevance within the Open Banking context.
Even though prepaid is a fast growing sector in the financial services landscape, one challenge we found early on was that there were a lot of preconceptions and misconceptions about the sector. There seemed to be stereotypes that prepaid is a low-budget product for retail use and typically for people who have poor credit scores and are unable to obtain a credit card.
Our belief from the beginning was that card products should be an essential part of the corporate treasury management suite and we were one of the first to recognise how valuable they could be for SMEs and enterprises. The numerous warnings we heard that prepaid would not resonate or gain traction in high-value markets have proven to be completely untrue.
Sure, prepaid cards in themselves are simple – you spend what you have, with no overdrafts or APR interest rates. But it’s this very simplicity that makes it a valuable service for the corporate world.
To be fair though, we didn’t just offer a standard prepaid card. We spoke to our clients and have shaped our product for our audience, which means we enable our clients to benefit from the largest balances (it costs up to €350,000 to fill up a superyacht in one go) and 15 currencies on one card. That means they can make frequent, large-size transactions in different countries in different currencies.
The sectors we have established ourselves in are global high-value markets that are hard to enter, so we had to get it right. And we think we succeeded at it.
As just one example, our clients in the music industry told us cash management was one of the biggest headaches for tour managers as they need to have sufficient funds to pay crew per diems (daily allowance) and a host of other expenses, in the currency of the country they are touring in. Converting multiple currencies is time-consuming and can be exorbitantly expensive.
The benefits to users from prepaid cards, in the music industry and in general, is that they reduce security risks because there’s no need to carry cash, and they reduce the opportunities for fraud or misuse of funds. They also offer greater visibility for the people using them because they see balances in real time, and they’re typically more cost effective than other cards and easier to use.
(Of course, there can be many benefits to providers of prepaid cards from a revenue perspective -- the global prepaid card market is expected to reach $3.7 trillion by 2022, meaning having even a small slice of the pie could be a meaningful business opportunity.)
But we are bullish on prepaid not just because it’s a good revenue centre for us and because our clients like it, but also because we think it will flourish in the world of Open Banking.
Contrary to what some people have suggested, we don’t think open banking is the death knell for cards. We do think it will put pressure on certain key segments of the card markets -- our theory is that debit cards will be the most challenged and credit cards may also feel some pressure – but we expect prepaid cards will continue to gain favour.
One of the key advantages of Open Banking is direct access to your bank accounts, which means your debit card will be less relevant. When out and about in Starbucks or Selfridges you still may use your card, but when paying for things online you will not necessarily need to use your bank cards.
We’re not telling people to close their bank accounts or cut up their credit cards, we recognise both are valuable and we also know it’s too early to know exactly how this will play out, but we do think prepaid cards will be the most insulated because they tend to be used for a specific purpose and are not always the day-to-day spending/living account.
Of all the card types, prepaid offers the most flexibility and the biggest capability to adapt to future innovation. That’s likely why its the most used product in the fintech world and nearly always a starting point for new challenger banks.
For our clients, such as the super yachts or touring music artists, prepaid will continue to be very attractive in an open banking context. Their main focus will remain on managing money and distributing it around the world, yet Open Banking should mean they can move money quicker and from one place.
It also promises significant benefits from a treasury management perspective by reducing the potential for error. By not having to log in and out of multiple systems with multiple banks and effectively keying in the same instructions in different places the margin for error is minimised.
Sometimes it's not about how clever you are and how sophisticated your technology is, it's just about how simple you can make things and how easy to use it can be. Having to do something once instead of say three times is going to be a great benefit to our clients.
Still, our own research on Open Banking would suggest there is still some way to go till these benefits are felt. We found earlier this year that although a considerable amount of development has taken place behind the scenes to make Open Banking available for wider use, 8% of businesses still have no idea what it is and a lack of understanding of its benefits has meant that 59% of respondents are not yet reaping its rewards.
So even with the best tech and best products, without awareness our efforts may be futile. Which is why evenings like this are so important and it’s my great privilege to have been able to speak with you tonight.
Tatyana Marsh, Head of Communications
Centtrip, is a fast-growing London fintech that specialises in treasury management, payments and foreign exchange.
In my role, I am responsible for creating awareness of the company’s achievements and capabilities outside of its Shoreditch office, a task that sees me engage with journalists from major news outlets, as well as encourage the company’s employees and management to consider how to articulate its accomplishments and unique offering in a crowded fintech market.
In addition to my role at Centtrip, I lead the communications function for Open Banking Excellence and its work in bringing together and growing the Open Banking community. I'm also passionate about the opportunities of technology to disrupt and improve finance and about seeing more women in fintech.
Prior to joining Centtrip I have held roles at HSBC and IHS Markit.