Guest Blog for Business & Finance: Ireland a hotbed of payments innovation!

I was delighted to guest blog for Business & Finance this month.  Here's a copy of the post as it appears on their site:

Ireland is fast becoming a thriving hub for the global payments industry.  We have the right experience, world class skills and are building a solid reputation globally for creating highly innovative payment businesses.

According to IDA Ireland there are 30 indigenous companies in operation here, employing around 1600 people and producing over €225m in exports.  Ireland has also attracted large global payments brands such as MasterCard, PayPal and Elavon.  The IDA states there are now 12 multinational payment companies here employing around 3700 people.

Over the last few years we have seen a lot of new innovative solutions- from payments technology to entirely new payment concepts. There are some fantastic success stories emanating from this country! 

Kerry is a regional hothouse of payments innovation with Fexco and Monex.  Set up in 1981, Fexco now employs 1800 people globally offering Dynamic Currency Conversion (DCC), corporate payments and global treasury solutions.  Monex was established in 1997, offering multi-currency pricing, DCC and cross border acquiring solutions.  Similarly Continuum, another Irish-owned operation also offers DCC services from a Kerry base.

Irish-owned Realex, which was set up here over 10 years ago, already processes payments of over €24 billion a year for 12,500 online retailers including Aer Lingus, Paddy Power, Vodafone and Virgin Atlantic. It employs 160 people in offices in Dublin, London and Paris.  Colm Lyons, founder, is now driving the company’s growth further by pushing into UK and Europe by partnering with Elavon, to offer a gateway solution for online retailers across Europe.

Sentenial, the Maynooth-based payments company providing technology for other companies to ready themselves for the SEPA changeover, has recently announced over 100 new jobs.  These will be created over the next 14 months, bringing the total workforce to 270.

OmniPay, a global payments processor, was founded in Dublin in 2000.  Due to significant business growth, this company also recently announced the creation of 30 new jobs at its headquarters in Clonskeagh, Dublin, bringing its total workforce to almost 200 people over the next six months.

MasterCard has now based its global innovation ‘hub’, MasterCard Labs, in Dublin with 200 people employed there.  Similarly, Elavon supports a variety of business lines globally through its 400-strong workforce in Ireland. Paypal, set up in 2003, now employs over 2400 people at its Dublin plant. 

Neither of these is Irish-owned but as with other examples in this industry offshoots do develop so it will be interesting to see what emerges.  Stripe, a new e-commerce tool for online payments, offers an alternative online payment system to the likes of PayPal. Whilst US based, it was founded by Irish brothers Patrick and John Collison.  Only two years old it has already secured thousands of clients in the US and recently launched officially in Ireland with further plans to expand into Europe.

There are a number of Irish research institutes involved in ongoing research into payments technology such as Centre for Cybercrime at UCD, the Computer Science Centre at UCC and the Dependable Systems Unit at DCU where students are developing more reliable software systems, examining security issues and exploring mobile forensics.

It’s not difficult to see why such companies would choose to set up here. Irish financial regulation, whilst stringent, still serves the payments market in Europe well.  Ireland is signatory to the European Payments Services Directive and e-Money directive and is a member of SEPA. This is undoubtedly an attractive aspect for any interested US or European business

Equally, government enterprise bodies offer employment grants and favourable tax credits to companies who set up here.

With regards to innovation on the Irish front, the Irish Payments Services Organisation (IPSO) doesn’t directly call out their thoughts on fostering innovation.  Instead they reference the goals expressed by the National Payments Plan (NPP).  These NPP goals revolve largely around changing the focus, usage and adoption rates of newer payment technologies rather than listing any specific goals to attract or foster investment in new payments providers or payments innovation. 

Surely this is a strategic gap which needs to be filled?

IDA Ireland however bills Ireland as ‘the location of choice for international payments firms’ and is promoting Ireland as having a strong capability in DCC, PCI compliance, prepaid cards and payment processing platforms. The payments market in Ireland offers rich opportunities to start up, scale and grow new businesses with a truly international focus. 

It is important that we do more to foster indigenous enterprise rather than focusing all our efforts on attracting multinationals.  Investment in research and education, a focus at national level by bodies such as IPSO and incentives to set up at a local level will certainly help.

This way we can ensure we continue to strengthen our payments knowledge and technology enabling us to retain and grow our global reputation in this area.

Sources include: Government’s Action Plan for Jobs 2013 http://www.djei.ie/publications/2013APJ_Annex.pdf, Irish Independent, IDA Ireland