Monetary and Banking Research Institution
Date:1/12/2019 11:34:13 AM   |   Code : 294027
Getting Rid of the Free Service Cycle Preconditions for Fintech Business Development
Getting Rid of the Free Service Cycle Preconditions for Fintech Business Development
A payment field expert said: Getting rid of the free transaction cycle and free services is a prerequisite for the development of Fintech businesses in the country. Until this happens, we will not see a major boom in this area.

Karim Khamseh, Chairman of the Board of Novin Payment Company, spoke about the role of the new businesses in the industry, and said: “Providing free services, in addition to preventing future development, by creating shareholding phenomena in the payment industry, it also threatens the current situation.” According to the Public Relations Department of the Monetary and Banking Research Institution and quoted by the news headquarters of the 8th Annual Conference on Electronic Banking and Payment Systems.

"This process has led to the arrival of players who, while not providing any service, sometimes asking for payment service fees, and as an uninvited guest at the table, claiming rights," he added.

Khamseh reminded: “Expansion of enterprises, including banks and corporations and payment companies will always tend to slow down the speed and agility in these institutions. If the continuity of competition, the maintenance and promotion of market share requires the provision of new services, this paradox is emerging as a challenge.

The chairman of Novin Payment stated: “The entry of new players into the industry, which has greater agility and risk-taking as compared to older and larger companies, can be a solution to the challenge, ultimately leading to a coexistence and sharing of benefits between banks and these businesses and by offering value added services on this platform, Fintechs can provide their own and the old players’ utility and profit.

He noted: “Creating a pay-as-you-go phenomenon in the payment industry, which means sharing a pay-as-you-go transaction fee over the use of PSP services, raises the risk that, if the linking and sharing of benefits in this case is not well managed, the entry of new players in this space may spark this phenomenon.

The Chairman of the Board said: “Protecting businesses with the extreme and ineffective ways widespread in the country also led to the loss of resources on one side and the disruption of the businesses on the other side.” He stressed: “We must take advantage of past experiences in the present time, and do not repeat them again.”

"The biggest problem is the lack of business models for this cooperation." He explains in a statement on the challenges in collaboration between PSP and Fintech. “Because the free transaction has made the arrival of these new players as a new partner in the profit of fixed earnings, and it's natural that old players will be less willing to give in to Fintechs companies.”

The expert in the field of payment pointed out: "Throughout the world, providing e-banking services and payments are subject to fees from the ultimate beneficiary, and if Fintechs can provide more valuable services to their users at lower cost, they will be welcomed."

Khamseh added, "Therefore, bigger banks and institutions are looking for cooperation with Fintechs, and they are not looked at as a new partner or uninvited guest over the table."

He reminded that some of the Fintech companies in the country are currently charging fees for the services they are providing, which should be welcomed and manage the process in a way that the industry’s competitive atmosphere does not push these businesses towards cheap or low-cost services.

He added that the income of these new players in the competitive market, if limited to their share of the pay-as-you-go transactions received in partnership with payment companies, would only lead to a reduction in the incomes of the infrastructure companies and would be harmful to both groups.

It should be noted that the 8th Annual Conference on Electronic Banking and Payment Systems with the theme of the Blockchain Revolution will be held in the Milad Tower Conference Hall on 29th and 30th of Janurary 2019.

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