Anita Paju, Director of Banking Services at LHV Bank
Anita Paju, Director of Banking Services at LHV Bank, recently discussed the bank’s activities and broader fintech trends at Money20/20.
LHV Bank, a UK-based institution, operates three business lines, with Paju heading the banking services team. This team provides payments, accounts, and infrastructure to other regulated businesses. Paju highlighted Money20/20 as a crucial event for LHV Bank, allowing them to connect with clients and conduct a year’s worth of business in just three days.
Discussing emerging trends in fintech, Paju noted that ongoing challenges in Europe include making payments instant across the SEPA area and increasing open banking adoption, issues that have been discussed for a considerable time. However, she expressed optimism that new regulations mandating instant payments will drive progress. Beyond these foundational issues, Paju observed a growing maturity among fintechs, leading to market consolidation. The focus for these more established fintechs is now on client retention and expanding services into more bank-like balance sheet offerings, which she believes will further fuel the growth of embedded services.
Paju then addressed the unique challenges of banking fintechs. She explained that fintechs, especially those of a certain size, are highly demanding regarding technology. This includes expectations for up-to-date technology, high performance, efficient incident management, and platform security. Paju stated that LHV Bank, being primarily a technology company, is well-equipped to meet these demands. However, pairing these technological requirements with the stringent regulatory and compliance obligations of serving other regulated businesses presents a significant but manageable challenge.
Finally, Paju expressed her anticipation for the upcoming discussions with other Money20/20 guests. She was particularly keen to gain insights into their top priorities and future plans. Paju explained that for an infrastructure provider like LHV Bank, a forward-looking vision is essential for planning their roadmaps and products. Unlike retail banking, where products can be launched and then marketed, infrastructure providers must align their offerings with clients’ future needs, often requiring a year of lead time. Therefore, understanding the strategies of leading fintechs is crucial for LHV Bank to foster future collaborations and inform its own strategic direction.
John O’Beirne, CEO of Square International
John O’Beirne, CEO of Square International, discussed embedded finance and its evolution. He stated that the term “embedded finance” is becoming outdated, with a shift towards AI and tokenization. For Square, it means simplifying complex business processes by embedding the platform to help businesses operate faster, cheaper, and grow, with payments blending invisibly into the process. Square focuses on verticals like food and beverage, hospitality, and retail, tailoring their platform to the natural flow of these businesses.
Comparing the US and European markets for SMBs, O’Beirne noted they are very different. The US banking system is fragmented with varied state regulations, serving a self-directed customer base. Europe has a more embedded banking system with diverse regulations, customs, and languages. He suggested the US is at “2.0” in payments, the UK at “1.5,” and Europe at “1.0,” with a consistent trend of payments moving from traditional banks to modern platforms that solve underlying business problems. He gave an example of a bakery using Square’s platform to integrate payments, track inventory, and plan for growth, freeing up the owner’s time.
Regarding pain points for businesses in sectors like food and beverage, O’Beirne identified the gap between expected and actual gross profit as a key issue, due to factors like returned meals or changing ingredient prices. Square designs products by understanding the seller’s workflow, helping them track inventory, plan, and create loyalty and marketing programs to expand their customer base.
For the end consumer, O’Beirne stated that they expect a “world-class customer experience” from every local store, comparable to larger businesses, including immediate phone access and personalised recognition. Square aims to “democratise” its platform, giving small businesses access to the same tools as large ones, empowering them to compete and grow. He emphasised Square’s purpose in helping businesses access the economy and recreate a neighbourhood feeling.
Joëlle Bønding, Adyen’s VP Vertical Strategy Platforms and Financial Services
Joëlle Bønding, Adyen’s VP Vertical Strategy Platforms and Financial Services, discussed Adyen’s role as an “invisible engine” for partners like Fresha. Fresha, a vertical SaaS platform and marketplace for salons, uses Adyen to power its payment processing and financial products, leveraging Adyen’s financial technology platform and banking license.
This allows Fresha to offer seamless payment experiences under its own brand, building customer trust and facilitating the development of financial services relationships. A key takeaway from a recent session was the CEO of Fresha’s focus on consolidating technologies into a single platform to solve SMB problems and generate additional revenue from payments.
Bønding elaborated that vertical SaaS companies are significantly transforming traditional banking by capturing the underserved financial services market for SMBs. By partnering with companies like Adyen, these platforms can become primary relationship providers, using their extensive data to underwrite users more quickly and offer financial services such as loans. She believes vertical SaaS platforms are poised to disrupt both embedded finance and traditional banking. Merchants using these platforms appreciate the convenience, with high return rates on loans due to the automated, in-dashboard application process. For end consumers, the expectation is a seamless payment experience with preferred payment methods and efficient terminals, with the ultimate goal of even paying in advance.
Looking ahead, Bønding is excited about the increasing integration of financial services into vertical SaaS businesses. She predicts that payments will become a foundational offering for SaaS platforms to remain competitive. She foresees platforms building more comprehensive financial services, including money management and business cards, with Adyen powering these innovations as the “invisible engine.”
Grant Evans, VP Partnerships at Worldpay
Grant Evans, VP Partnerships at Worldpay, shared his views on open banking, embedded finance, payment fragmentation, and future innovations.
Evans considers the current year a “landmark” for open banking. He noted that while it was once touted as the “next big thing,” account-to-account (A2A) transactions currently make up only 7% of global e-commerce. He distinguished between Payment Initiation Service Providers (PISPs) and data-focused Account Information Service Providers, suggesting that “pay by bank” should be seen as a complementary alternative rather than a direct challenger to cards. PISPs’ main advantage is cost, as they bypass card interchange and scheme fees, and they’ve seen success in high-value transactions in financial services and automotive. However, he acknowledged the consumer protection benefits of cards are not yet matched by open banking.
Evans sees “100%” untapped opportunities in embedded finance. He highlighted its value in cross-selling products like embedded insurance or merchant cash advances when customers are already in a “buying mode.” He views Independent Software Vendors (ISVs) as the “new gatekeepers” to merchants, making platform partnerships a key focus for Worldpay, as these platforms can extend a payment provider’s sales team.
Regarding the fragmentation of local payment methods, Evans found it counterintuitive, especially in Europe, where different payment apps exist for the same currency. While initiatives like Wero aim for centralisation, he expressed skepticism about rapid adoption, drawing parallels to the slower growth of open banking. He suggested that successful A2A adoption often depends on strong government or central bank mandates, which have been lacking in the UK’s approach to “pay by bank.”
For future innovation, Evans identified platform partnerships as the most significant model. He stated that partnering with platforms, which are now the “new age gatekeepers” to merchants, is crucial for payment providers, aiming to seamlessly integrate their services as an additional part of the platform’s tech stack.
Scott Dawson, CEO of Decta
Scott Dawson, CEO of Decta, discussed meaningful innovation in payments, consumer and merchant expectations, and the future of regulation.
Decta is an end-to-end payment solution provider with offices in the UK, Ireland, Cyprus, and Latvia, offering regulated services across the UK and EU. Their technology center in Latvia provides global technology services, all aimed at helping banks, fintechs, PSPs, and merchants grow their payment infrastructure.
Dawson clarified that he distinguishes between “innovation” (something new) and “progress” (change that benefits the world). He believes the industry should focus more on progress, particularly in areas like accessibility and inclusion, such as banking the unbanked, providing better access to finance for businesses, and developing technologies to assist people with disabilities in accessing financial services. He noted positive changes already happening in these areas.
Regarding consumer expectations, Dawson revealed that Decta recently commissioned research (soon to be published on their website) to understand what merchants should expect from PSPs, by directly asking consumers. While he didn’t disclose all findings, he stated that consumers, much like merchants, seek dependable, cost-effective, and efficient payment solutions, with a strong desire for consistency. He emphasized that for consumers, the size or context of the merchant (SME, enterprise, or startup) is irrelevant; they simply expect a smooth transaction. This means that even small operations need modern payment flows.
Switching to merchants’ pain points, Dawson explained that they primarily seek basics: lower costs, increased conversion rates, and reduced fraud. Merchants assume that features like good risk management are standard and accessible. He stressed that payment service providers should aim to be in the background, facilitating business, as merchants are driven by their passion for their core business, not by payment flow discussions.
Finally, if he were to design the next round of payments regulation, Dawson would aim for a collaborative approach, involving not only large financial institutions but also SMEs, merchants, and PSPs from across the value chain. He would particularly focus on fostering the SME space, which he described as the “lifeblood of the UK economy,” responsible for significant employment and turnover, but currently struggling. He would propose regulations that streamline tax, improve access to financial services like lending and bank accounts, simplify employment law, and offer incentives to attract businesses back to the UK, as he feels the country is “losing its magic.”
