An interview with MaxPay’s Artem Tymoshenko and Alexandr Mikhailenko

Payments are a vast, ever-changing landscape, covering everything from crypto to QR codes.

We sat down with CEO Artem Tymoshenko and COO Alexandr Mikhailenko of international business payments provider Maxpay, to find out how they started the company, why the payments landscape is changing and where payments are going next.

Q: What does Maxpay do?

Alexandr Mikhailenko:Maxpay is a full-scope Payment Service Provider focused on card processing, chargeback management, and incorporation assistance for online businesses. Besides, Maxpay provides 150+ payment methods, access to dozens of bank acquirers, and tools that increase merchants' conversion rates. Our team has deep knowledge of international markets and regulations. Thus we offer incorporation services for clients who need a legal entity in EU and VAT MOSS scheme reporting. And we offer AI-powered anti-fraud services, including payments, payouts, and refund checkups. 

Q: Why did you create the company? What was the gap in the market you spotted?

Artem Tymoshenko: The global fintech market has been evolving since 2008 with a constantly increasing share of investment. In 2014, the European fintech investment experienced the highest level of growth with a 215 per cent year-on-year increase.  Along with that, cashless payments were gaining more popularity. At the same time, the market was lacking solutions for digital payment processing that would cater to business needs, so we’ve decided to create our platform. Of course, financial technologies is a highly competitive market that sets high standards for the providers. For many businesses opening a Merchant account took too much time. 

With this in mind, Maxpay rose as the company that adopted the “Merchant first” philosophy. Our goal was to build a one-stop solution so that the business owners or billing managers could access all the necessary services. Compared to many other services on the market, we offer businesses a faster submission process to open Merchant accounts. Our platform provides the customers with basic services such as analytics, security, payment processing, and additional value in the form of risk analysis and chargeback management. 

Q: How do you make money?

Artem Tymoshenko:Maxpay is a self-invested project. From its very inception, we have been opting for a business model profitable itself without extra investment. However, now we’re open to investments and cooperation. Our clients come from a variety of industries, from eCommerce to Subscription services. They prefer to invest their time to grow their businesses rather than spend time on preparing documentation to get an entity in the EU or PCI DSS certificate, so we’re ready to handle this. Our business model embraces services, crucial to business needs. These are risk management, chargeback prevention, PCI DSS certification, and incorporation services. Also, our team offers the services of payment processing, host-to-host integration, billing logic solutions, and fraud prevention for SME and enterprise clients. Besides, we provide Plug’n’Play plugins to the most common CMSs like Prestashop, Woocommerce, Drupal and marketplaces like Shopify. 

Q: Is payments 'having a moment' within fintech?

Alexandr Mikhailenko: Definitely. Today payments is the largest segment within FinTech. According to Statista’s recent report, the digital payments segment has a global transaction value of $5,204 billion in 2020. This trend will be here to stay with us for at least several years as pandemics changed customer behavior.

Q: Why is there so much VC money flowing into payments at the movement?

Alex Mikhailenko: Practically for the same reason. As I’ve already said, pandemics changed the world. Many industries experienced a decline, many businesses went online or transformed into digital. At the same time, businesses that already operated online were doing great. So as soon as investors realized this, they reallocated the funds there. This means more investments in technologies and fintech in particular. In 2020, this drove VC of $21 billion globally. KMPG Pulse of Fintech research, issued in February 2021, highlighted a curious development that happened in H2 of 2020: not only businesses but also governments prioritized fintech. To sum up, all this is related to global changes and consumer behavior as a result. 

Q: Has the pandemic been good for disruptors in the payments industry? If so, why?

Alexandr Mikhailenko: Absolutely. The popularity of cash has been dropping over recent years and the pandemic accelerated this process up. Very much due to the lockdowns even more businesses turned to cashless equipment and online payments. Speaking about the industries such as subscription, and eCommerce, they experienced boost and required payment processing services.

Pandemic influenced traditional banks too, forcing them to adopt new digital services to satisfy their clients. Fintech startups are also keeping up with these changes, contributing to the digital transformation of banking with such initiatives as cashless payments and technologies, central bank digital currency, alternative payment methods, open banking, launching bank accounts for businesses or individuals. But this also has its downsides with increased fraudulent activity. While more financial operations moved online, fraudsters followed them. This calls for additional security measures. We understood this a long time ago and that is the reason why we also created Covery, an anti-fraud system. 

Q: What do you think about emerging new payments channels such as open banking?

Alexandr Mikalenko: Technologies such as open banking are something that all the parties involved will benefit from. Thanks to them, the fintech ecosystem gets more opportunities to evolve, traditional banks adopt higher standards, take digital transformation and competition more seriously. And, of course, thanks to the individuals – and businesses – get more convenient ways of paying and managing their finances without going offline. As I’ve already said, this often leads to an increase in fraud, but with solid anti-fraud technologies, this won’t be a problem.

Q: What about more revolutionary ideas such as crypto or QR codes, are they here to stay?

Artem Tymoshenko: This will be defined by end customers. Usually, most people take innovations, related to their money, quite suspiciously. But when they make the service faster and more secure, they want more of them. However, finance isn’t the industry that adopts changes fast, so it will pass quite a long time before most of them will be provided by banks and other financial institutions.  A lot of work is to be done from the industry as well. As an example, banks went with the new regulation - PSD2, robust customer authentication. Now end-user payments are challenged with two of three  -  Something the customer knows (e.g., password or PIN), Something the customer has  (e.g., phone or hardware token) Something the customer is (e.g., fingerprint or face recognition).

Q: What is the future of payments?

Artem Tymoshenko: Currently, we’re experiencing more changes than ever and this reflects payments. Now more countries understand the need to digitalize the finance industry, following the EU experience. They plan to start working with open banking legislation and implementation. The same is going on with the Central Bank Digital Currency initiative, cutting down cash usage. New rules and technologies emerge every day and it is essential to keep up with them. Mobile technologies will experience the rise. Brick-and-mortar businesses, especially in the travel industry, will be replacing traditional points-of-sales with mobile solutions. Hotels, for instance, were implementing contactless check-in technologies long before the pandemic started, but now they are being adopted even faster. Same as businesses, individuals will move their finances to their smartphones and tablets. Finance management apps like Starling, Huntington Bank, Genome, or N26 will expand their functionality, offering more services, such as money transfers, payments, currency exchange, and personal finance management. And who knows what else will disrupt the market in the nearest future. One thing is clear: The future is cashless.