Pavel Gubin, CEO of OpenWay analyses the strategies, tools, technologies, and philosophy needed to build a resilient digital payments business.
Pavel Gubin, CEO of OpenWay, the developer of a top-rated digital payments platform and a strategic partner of leading payment players in Europe, the Americas, MENA, and Asia-Pacific. Born and raised in Ukraine, Pavel now lives in Belgium and travels frequently to meet with OpenWay clients in the US, Italy, Australia, Kenya, UAE, and many other countries where they launch payment projects. In April 2022, OpenWay sold its business in Russia to prevent its technological innovations from entering sanctioned markets.
What happened to the payments industry during the pandemic?
In the past, innovations in our industry were mostly driven by banks, fintechs, and ecommerce. But during the pandemic, digital payments became critical for the survival of entire communities, and because of that, they became a priority for a variety of companies, from small merchants to global enterprises. If before the pandemic we were used to customers walking into stores and paying with cash, curfews made this scenario less likely and less desirable. During the pandemic, financial institutions had to learn quickly from the situation and improve their disaster preparedness so that their customers who were stuck at home could still pay for food delivery and make other purchases electronically.
Similar challenges have been observed before during wars, also during natural disasters, including those related to climate change. These events are no longer like black swans, but a tragic normality.
Since digital payments are critical to life, how can we ensure they don’t collapse?
We see that digital payment systems are prone to failure if they don’t meet certain requirements. To prevent this, companies need to adopt new technical and organisational concepts that lead to resilience. They are essential not only for select players like banks and fintechs, but also for governments ensuring the stability of national financial ecosystems.
OpenWay has first-hand experience with resilience requirements. During the pandemic, we managed to implement our platform remotely for a client in Italy whose employees could not leave their residences for months, and a client in Australia, whose borders were closed for a long time. Right now, we are helping our clients and partners in Ukraine provide their customers with reliable digital payments during the disastrous war. For Ukrainian refugees, international bankcards issued by our client banks were among very few assets they could take with them abroad.
We have long been working in Indonesia, which experienced just in the first six months of last year 1,432 natural disasters. Our platform powers payments in Bangladesh, where the central bank implemented a national switch to boost financial inclusion and address poverty. In an increasing number of countries, regions, and market niches, payment infrastructure resilience is becoming a must, not an option.
How do new technologies contribute to resilience?
For an organisation, resilience in general means that you need to avoid a point of failure – whether it is data, transactions, services, knowledge, or people. And if we look at the platform level, there are two approaches: one is classic and the other is completely new.
Until recently, it was common for organisations to ensure platform resilience by making copies of systems and data in different data centers, maintaining multiple connections and robust synchronisation between them without data loss. And our platform does support high availability and geo-clustering in a live environment, which is especially important for large-scale businesses. I can say that this approach makes infrastructure resilient to connection failures, but it’s quite expensive. You need to duplicate everything — infrastructure, data, traffic, and personnel.
The new approach is to rely on a cloud environment, distributed database management systems, and microservice architecture. We have been successfully incorporating many aspects of this approach into our platform. Several years ago, NewSQL and NoSQL data management systems were not ready for real-time financial solutions requiring 100% data consistency. But now, systems like FoundationDB and Cockroach not only comply with the strict requirements of digital payment platforms, they are also faster than classical SQL equivalents and more cost-effective. They support geo-distributed data management, so if one or two nodes of the cloud infrastructure fail, the whole system remains stable, processing transactions without data loss.
Since governments have also realised that digital payments are critical to life, many of them introducing on-soil implementation requirements for banks, fintechs, telcos, and retailers to store and protect personal customer data within their country. Therefore, when we manage a cloud implementation with our clients, we work towards resilience whether they choose a public cloud, a local data center of a public cloud, a private cloud, or a combination of these.
Aside from technology, how can an organisation be more resilient as a whole?
Resilient IT infrastructure is not enough, because, according to Conway’s law, an organisation’s communication structure and software architecture are closely related. Organisations, like platforms, achieve a much higher level of resilience by means of decentralisation.
It is not just about a distributed environment where people can work remotely. I am talking about building several hubs for every key function: R&D, delivery, and business management. These hubs should be united by a fully virtualised yet secure infrastructure and – no less important – a culture of ongoing knowledge transfer and documented products and projects. That’s how you get an agile team reacting quickly to changes, and if one of the hubs is busy or even closed, the whole organisation will stay stable.
Increasingly, banks don’t want to rely solely on vendors or partners, or even in-house engineers. They go for an ecosystem co-powered by their own IT, with several technological and consulting partners. This kind of hybrid solution ensures maximum resilience. If something happens to a third party or the working relationship is terminated, they could still operate the payments software and change the code independently. For this same reason banks also insist on perpetual licenses, escrow-contracts, and proactive knowledge transfer from vendors.
What are the downsides of making digital payments more resilient?
For payment players resilience is beneficial all around. But for other parties involved, there are certain risks. If a bank is very stable and able to act independently, its environment – society, partners, vendors like us – are very limited in ways to influence its business trajectory. This was sadly demonstrated when the war in Ukraine started and sanctions were imposed.
For example, OpenWay has several hubs for R&D, delivery, and business development in EMEA, Americas, and Asia, and works with partners across the globe. We used to have employees in Russia, but in April 2022 we decided to close our business there and sold our local subsidiary in that country. We no longer have any relationship with our former clients in Russia, which means that we do not provide them with any software or services. But due to their perpetual licenses and robust infrastructure, we cannot prevent them from using our software. This is what may happen when a digital payments player is resilient and has become independent of its vendors.
This is not just a downside for us, it is a constant pain point. Our company is against war. For me it’s also very personal: I was born in Ukraine, I was educated there. My family was in Kyiv when the war began and the bombings started. When the war began, I drove there to evacuate my family to Brussels. As a company, we relocated some anti-war colleagues from Russia to our hubs in EMEA and Asia, and opened our doors to the employees of our Ukrainian partner. Those who wanted to and could travel were able to relocate. From our resilient hubs, we keep supporting our clients in Ukraine every day to help them maintain digital payments in their country and for refugees abroad.
Is mobility crucial for overall resilience?
The short answer is yes. But I’d like to point out that mobility is more than just physical relocation.
Yes, we mostly talk about mobility in times of mass migration due to disasters or employment opportunities created by global projects. But the pandemic has revealed the benefits of another kind of mobility.
First, employees realised that they could work successfully remotely, and in some cases perform their duties even more efficiently and with greater opportunities. Then companies saw many benefits in a remote workforce that could be involved in more activities outside their region of residence. It also became easier for companies to hire talent across the globe.
As a result, our industry is witnessing the rise of organisations of a new type – with cross-office mobility, better talent acquisition, agile management, greater social experience and professional growth across functions, domains, and regions.
What does it mean in practice? For example, how did OpenWay build a digital wallet ecosystem for our clients in Asia to ensure the financial inclusion of millions of individuals and hundreds of thousands of SMEs? We involved our many experts from various domains and regions with the most relevant skills and experience. Among them were engineers who had managed integration projects with M-PESA in Kenya, large-scale digital payment projects in Europe, and launches of mobile payment solutions in Central Asia.
Mobility is crucial in many cases. But still, it is not universally applicable. Some organisations, even those gargantuan in size, are willing to work in an agile or scrum environment and do business fully remotely. Others, including some small startups, rely on their local presence and culture to unite their project team. Vendors in the payments industry have to remain flexible. We should be able to offer solutions that feature resilience and mobility to the extent that satisfies each client.