“When you start building your project or your proof of concept, especially for a payment solution, you need to think beyond your local markets from day one because you don’t want to totally rebuild your infrastructure and technology after just a year or two,” Lion told PYMNTS in an interview.
But while he emphasized the importance of targeting global markets, he cautioned against launching internationally too soon. Instead, he recommends first working with local partners to tailor solutions to local needs as part of establishing a strong presence in core markets.
Once that is achieved, firms can then proceed to replicate the business model in new markets, Lion explained. In fact, Mangopay’s launch in Luxembourg, some 12 years ago, and subsequent expansion into other countries serves as a testament to the effectiveness of this approach, he said.
Despite the firm’s global ambitions, the business-to-business (B2B) FinTech company still generates a significant volume of business in the European market, specifically France, Germany, Italy and Spain.
As Lion said, “it is super important to think globally from the start, but first focus on your local market, get good at it, and then go to a market that looks very alike.”
Expanding into new markets, especially in a diverse region like Europe, is not without its challenges. In fact, the fragmented nature of European markets, with different cultures, languages and payment methods, can present significant obstacles to business growth.
In post-Brexit Europe, for example, one of the major hurdles Mangopay faced was to operate under the TPR (temporary permission regime) like all other payment institutions in the EU. To address this hurdle, the company took it as a challenge to reinvest massively to tackle the U.K. market. Mangopay built not only a legal entity in the country but a dedicated team and product to make the U.K. one of its key markets by 2024.
He also encouraged firms to get closer to local regulators in each market they operate in as rules at the local level might differ from the ones applied at the regional level. “The EU is exactly like the U.S. It looks harmonized but the proof is that it’s not that simple,” Lion said.
Moving forward, Lion said Mangopay, which serves leading EU marketplaces and B2B platforms like Vinted, La Redoute and Wallapop, is looking to accelerate its expansion to the U.S. market, with plans to onboard local marketplaces by early2024.
This comes after the Europe-based firm acquired Dublin-based payment orchestration platform WhenThen and Polish fraud prevention firm Nethone in November 2022 and March 2023, respectively, to build a three-way stack that gives clients access to an end-to-end solution tackling all aspects of their payment needs.
According to Lion, these business mergers and acquisitions (M&A) also underline the importance of strategic partnerships and acquiring companies with complementary expertise — an effective strategy that can unlock new revenue streams and fuel rapid growth.
“We could have done it ourselves, but it would have taken another two years and we don’t have time in this very fierce competitive market,” Lion said of the significant amount of time and effort firms save in the M&A process, adding that the strategy has enabled firms like Mangopay to not only become global geographically, but also global in terms of the solution they provide to their marketplace clients.
This is why he advises firms to move fast when an opportunity presents itself. “If you enter a new market and there is a small player that has the knowledge, while you have better technology, then you should just move ahead with the acquisition,” Lion said. “This is a fast way to [broaden your geographical reach].”
Watch the Mangopay CEO interview: Can Payments-as-a-Service Crack EU’s Cross-Border Payments Complexity?