SIBS CEO: EU Digital Wallet Interoperability Will Reduce Dependence on ‘Rigid’ Global Networks

“Very dependent on global networks.”

That’s how Madalena Cascais Tomé, CEO of Portugal-based payments firm SIBS, described cross-border mobile payments across Europe — a challenge which she said requires accelerating innovation among European payment systems in order to bypass the rigid rules and standards set by these global networks.

“[That dependence] also shows that there is space to be more creative and to develop European standards that are more customized and targeted to the needs of Europeans,” Cascais Tomé told PYMNTS in an interview, adding that preserving “European sovereignty” will also require building payment networks with solutions that are unique to the region.

That goal is one that the European Mobile Payment Systems Association (EMPSA) has taken up since it was formed in 2019, working to build interoperability and provide roaming solutions among the 16 participating payment systems in the network, including SIBS, a founding member of the association.

The success of the initiative is expected to boost payments for over 70 million mobile payment users and more than a million merchant acceptance points, while facilitating several billion transactions for hundreds of European banks per year.

Asked about the heavy investment cost and the various national know your customer (KYC) and anti-money laundering (AML) rules that might complicate the process of ensuring seamless cross-border mobile payments, Cascais Tomé acknowledged the difficulty of the task, but stressed EMPSA’s aim to build interoperability between existing digital wallets instead of trying to merge them into one solution.

“There are ways to do that which have to do with helping the different solutions to interconnect, communicate and exchange information between themselves [without the need to] standardize what already exists,” she explained.

Anti-Fraud and Cybersecurity

The Portuguese payments provider has placed a key focus on security issues and anti-fraud measures, and as a result, adopts a “security by design” approach when developing payment solutions — in addition to artificial intelligence and machine learning tools to analyze and detect potential outliers to help improve its models.

“We have, as a European benchmark, one of the lowest fraud levels in Europe, and this is due to the Paywatch solution and services that we provide,” said Cascais Tomé, who added that the firm is also investing heavily into the cybersecurity space — “an area that will be ever more critical to enhance payments and digital services [more broadly].”

Another key aspect of SIBS’ anti-fraud approach is the need to enhance digital literacy and create awareness to minimize the number of businesses that fall victim to cybercriminal attacks, the rate of which has exploded significantly in the wake of the pandemic.

Read more: Portugal’s SIBS Takes Payments Platform International

Today, the 38-year-old Lisbon-based company is one of the largest FinTech firms in Portugal and one of the leading European payment providers, processing 7 billion-plus transactions annually and providing digital payments services to over 300 million users in several markets across Europe and Africa.

Integration of Value-Added Services

The eCommerce sector is one of the industries that has hugely benefited from the rapid digital transformation and the global shift from in-store to online shopping brought on by the pandemic.

“ECommerce has increased by almost two times in the European countries where we are present — it is really accelerating,” Cascais Tomé said, adding the fact that consumers feeling safer when making mobile payments that don’t require giving out their card details is one of the major factors driving this rapid growth.

The boom in digital payments has also proved to be an efficient and convenient way for merchants to receive payments, significantly decreasing attrition rates and shopping cart abandonment at checkout, she noted.

Additionally, the integration of additional value-added services into payment platforms, such as loyalty programs and buy now, pay later (BNPL) solutions, is a key trend that she said will gain traction moving forward.

“Our habits are changing, and payment solutions need to follow that,” Cascais Tomé said. “We are living in an ever more hybrid context and [it is critical] to make sure that we can manage our payments, solutions, payment transactions and payment information [effectively].”

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