Finbricks is one of these new payment service providers, originally established as an internal project of Komerční banka under its subsidiary KB SmartSolutions, called Zaplaceno.cz in its beginnings. It was a way for Komerční banka how to respond to the PSD2 directive, and an attempt to bring an all-embracing PSD2 platform for everyone. From this year Finbricks works as an independent company providing its services to other customers. This service could be used widely on the market and it could make open banking accessible not only to banks.
We talked with Tomáš Fíla, Founder and CEO of Finbricks, to explain what services they provide, where they are going, and what happened to Zaplaceno.cz.
What is the service portfolio of Finbricks?
Our goal at Finbricks is to create such services that simplify the entire PSD2 process as much as possible for companies and end-users, and thus support the entire open banking ecosystem. We believe that this is the future – and not just regarding payments. To be more specific, we offer access to banking services, primarily to payments and information from payment accounts, and also access to other useful functionalities, such as BankID. Technically speaking, we offer PSD2 Service Information Services (AIS) – information about accounts, their balances, and transaction history, and PSD2 Payment Initiation Services (PIS), including recurring payments. Our services are available through a single interface (API), within which we unify the differences between the solutions of individual banks. We cover nine Czech banks for both services at the moment.
In addition to PSD2 services, we created, for example, a User Management Service. Thanks to this service, we will remember the user, and the connection with the bank will be even easier during further use. And the offer is even wider. We are now at a stage where we adapt and tailor our solutions to our clients, and we mainly aim to the areas where our clients have their needs.
Who are your customers?
Our customers are, for example, payment gateways, various financial advisory services, and any solution that works with account information or payments.
Why should customers use Finbricks? Do you offer services that that banks do not offer?
Our customers are companies providing services to end-users. We are kind of a gateway to all banks for them. They do not have to worry about connecting to each bank separately or solving connection problems and payment processing. We solve it for them. Moreover, our customers will also have access to services of other entities, including the already mentioned Bank ID.
Where are the origins of Finbricks? Where did the idea come from?
The beginnings of Finbricks date back to 2018 when we have been finishing the project of implementation of the PSD2 requirements in Komerční banka. PSD2 was then perceived as a major threat, but also as an opportunity for banks as we were obliged to open access to payments and accounts for licensed third parties. At that time, however, no third party had a license and the new PSD2 services could practically only be used by banks. At that time, we decided to try building a payment gateway on new services. The intention was to test our newly deployed interface and at the same time test the functioning of the entire PSD2 infrastructure to see if there was a revolutionary change in the functioning of financial services. As was said at the time. And so we created the Zaplaceno.cz platform.
What is the essence of Zaplaceno.cz? And where has this platform moved to since its birth?
Zaplaceno.cz is an e-commerce payment gateway, which is built entirely on PSD2 services AIS (Account Information Service) and PIS (Payment Initiation Service). In the first step, it uses AIS to obtain a list of the client’s accounts, and in the second step, it allows the client to make a payment from the selected account. Zaplaceno.cz was the first to come into existence, and only then did we decide to provide a back-end payment gateway as a separate product. So Zaplaceno.cz was incorporated into Finbricks and became one of the services provided. We have now prepared a mobile application for use in stores under the Zaplaceno.cz brand. The seller generates a QR code, the customer makes an immediate QR payment from his mobile banking and our application then uses the AIS services to verify that the payment has arrived.
Your services are based on the EU’s PSD2 directive. What do you think about its impact on the market? Did it meet the expectations?
After the new Payment System Act entered into force implementing the requirements of PSD2 in January 2018, open banking services were practically inapplicable. However, the situation improved in 2019, when technical standards came into force. In the last two years, the implementation in individual banks reached such a level that functioning solutions can be created based on PSD2 services. We are currently completing the implementation of a very interesting group of services for our clients. However, we still have a long way to go, both on the side of banks and their way of providing regulatory services, and on the side of end-users who need to get used to them and use them regularly.
Do you cooperate with other fintechs?
Yes, we do. To be honest we do like working with fintechs a lot as it is easier to get something done with them than with large corporations. They are open to new opportunities and give them a chance. They know that it is not always possible to make money on new technologies right away, but it is important to be there. We cooperate with several important fintech, not only locally. Soon we will reveal our partners 😊.
How about the future? What are the plans of Finbricks?
Apart from adding several banks and expanding abroad, at the moment, we address the specific requirements of our clients. We plan on implementing payment lines within emailing or invoices and further major changes that we can talk about the next time😊. Regarding our open banking aggregation platform, we have completed the implementation of some basic services there, whether it is payments, account information, or other supporting functions. We focusing on further tuning these services based on real experience. We also prepare a completely new administration interface for our customers.
However, our main goal now is international expansion. Our customers aim to expand outside the Czech Republic and we want to support them also abroad. We currently work on the integration of Slovak and Hungarian banks. Other markets will follow according to the preferences of our clients.
In connection with the PSD2 directive, it is necessary to understand the importance of PSD2 payment. What exactly is it?
The PSD2 payment is a direct payment from the account. But for the paying client, it is a payment button. Payment gateways offer different payment buttons for different banks. But not all banks have such an option. Or some banks have payment buttons but do not want to cooperate with payment gateway. So for the end-user – company or e-shop – there is a great advantage of extending payment methods with these banks.
For the buyer, this is not such a big difference. There are still many clients who prefer to use the payment card and write down all the numbers. Ten years ago, payment cards were in the same situation online as PSD2 payments are today. Merchants pay quite high fees to card associations and other entities. With regular payment buttons, they pay to specific banks. Our prices are very competitive and should be motivating for merchants. And because we make immediate payments, the company gets the money fast. In addition, the e-shop gets accurate information about the status of the payment – they can check very quickly if the money arrived and can ship the goods immediately.
How would you describe your experience with PSD2 payment?
The success of PSD2 payments improves over time. But it is still not the same as with card payments used by almost everyone. We come across situations where clients do not know their login details for internet banking or do not completely trust the new payment process. Based on this experience, we add various explanatory screens, expand the instructions, and also communicated this real experience to other banks within the working group for the Czech Open Banking Standard at the Czech Banking Association.
Box 1: A little more about the PSD2 directive
The first directive was to be implemented gradually, from the end of 2018 to 14 September 2019. It brought the main change of availability of customer information for the seller (which increases the risk of data misuse) and increased demands on customer identity checks for payments online. On the other hand, PSD2 brought to the banking market a requirement for strong client verification and multi banking, i.e. the possibility to link accounts maintained by other banks within the popular internet banking.