What does it take to bring innovations to the payment industry?
Introducing a completely new product into a market is certainly a challenge - especially when the market is as highly regulated and legacy-based as the payment industry. And yet, kevin. managed to bring the first-of-its-kind account-to-account (A2A) payment solution for point-of-sale (POS) terminals to the market.
This solution enables merchants to accept direct account payments in-store via a POS terminal. Accepting a bank card payment results in merchants paying a significant amount of card fees with every transaction. Paying directly via a bank account means eliminating bank cards and removing all related fees, as well as improving security. A2A payments made in-store don’t require a change in user habits and bring undeniable benefits to merchants.
What does it mean for a relatively new company to introduce a revolutionary product to the legacy-ruled market? How do teams work to develop something that has never been invented before? Edgar Žigis, VP of Mobile Engineering at kevin., shared how he and his team contributed to developing a ground-breaking innovation, A2A payments for POS terminals.
Edgar, please tell us about your team at kevin. What do you do?
My team is responsible for the whole mobile domain here at kevin. We are responsible for developing everything related to mobile products. That includes anything from the sets of simple checkout Software Development Kits (SDKs) to the SDK for A2A payments for POS terminals, which can be integrated into any merchant app.
In simple words, what is the mobile POS SDK?
kevin. mobile POS SDK is one of the core elements that enables merchants to use A2A payments on point-of-sale terminals. The SDK is integrated into a merchant’s mobile application. The integration is quick and simple, and it enables merchants to start accepting A2A payments with their existing in-store POS terminal.
kevin. became the first company in the world to provide A2A payments for POS terminals. How did your team contribute to building this solution?
Our team performed the technical research on A2A payments for mobile devices. We had to figure out how to enable open banking payments using a mobile phone on POS terminals. We were exploring whether we could override the existing payment protocols, which are more applicable to card payments. The challenge was to adapt this in the easiest way possible for A2A payments.
Two other teams, Platform and Open Banking, created products we could use. Then, we built an additional layer on top, which would be responsible for A2A payments on POS terminals. That’s how we developed the mobile POS SDK. If it wasn’t for the Platform and Open Banking teams that contributed to making all this infrastructure, such as bank account linking and payment initiation, we wouldn't have been able to create this product.
How much time has passed since the idea was developed into a working prototype?
There are two answers. One answer is that it took the company four years. That’s because we needed the infrastructure first, open banking platforms, APIs and so on.
But if you’re talking about my team’s contribution, we were able to implement everything from A to Z in nine months. We had a working prototype in around six months, and we were already able to produce the first payments after that. But there was plenty of polishing and testing involved.
What technical issues have you run into along the way?
It’s not about technical issues but more about changing the mindsets of our partners, such as POS vendors, acquirers and banks, as well as the people with whom we’re working.
The payment industry is still very conservative when it comes to physical payments. Online payments are improving, and we see innovations made every year. But when it comes to offline payments, it was more about convincing our partners and making them believe that it was possible to bring A2A payments to POS terminals.
From a technical standpoint, developing a new payment method is not something you do every day. You need to understand how payment protocols work and research quite a bit along the way. Only a few select companies in the world do that, because how often do you go through the trouble of creating a new payment method? It’s very rare. Even when you see the new implementation of a payment method, it’s usually still based on card networks. But here, we needed to think outside the box and create something completely new.
Was there ever a time when you thought maybe you couldn’t do it?
No. I believe that our engineers can do anything. You just have to give the right amount of effort. In order to solve some problems, you may need to give less effort. When you solve complex problems, you need to give much more effort. We knew it would be hard, and it would take time.
At that time, our team was small. We had two backend engineers and one Android engineer working beside me, because I was also coding. I was a team lead at the time, and my role was to support the team in whatever they needed, so I helped with coding and understanding the documentation. We had really limited resources.
Currently, our team is much bigger than it used to be, and we’re constantly growing.
What are the main challenges innovators face in the payment industry?
In payments, the industry is still very interconnected. There are lots of big players, big banks, payment providers and terminal providers. It’s a highly regulated industry and still quite conservative.
The biggest challenge is convincing partners that a new solution will bring value. And when you’re this small with such large sharks around in such a regulated industry, there are a lot of business challenges. It’s a tough place, and it’s amazing that kevin. was able to squeeze in. At first, big players were a bit sceptical, but when they saw that our solution worked, all we heard was “WOW”.
The real challenge is to create this moment where you see their eyes go wide with surprise. kevin. managed to do that.
When it comes to innovations, you have to be a bit secretive about them. We’ll explode for sure, and we’ll bring more value soon. Our products received a lot of recognition, and we’re not planning on stopping.