Can you sum up Trustly’s year? What major hurdles have you had to overcome?
In terms of the challenges, at the start of the year, the Swedish market re-regulated, which had an impact on the whole industry there. Obviously, that affected us too, but we have managed to grow out of that. We’ve continued to launch new brands with operators and new initiatives, including one with Catena Media. A small dip doesn’t affect your full-year results unless you let it.
There is always competition and new brands stepping into the market, but we have a strong product and that has put us in a good position. Other challenges include Payment Services Directive 2 (PSD2), which has meant there are a few banks making late changes. But we’ve been preparing for PSD2 and open banking.
You touched on the Swedish market. How has the year been there since the market re-regulated?
We have experienced a challenging time in the market, but this was right across the industry in Sweden. The good news is we continued with our plans and solidified a good position. Hopefully the challenges re-regulation have posed will make us come out stronger in the end.
Does it present any learning potential whenever a market does go through re-regulation?
I think this was quite a unique case; the self-exclusion measures are what set it apart. Nobody was totally prepared for that, but what it has taught everyone is you need to stay ahead of the regulations when getting ready for a new market. But obviously, you grow and you learn and it’s really a case of each regulator having their own way of doing things. They will have their own way of implementing their own rules and policies.
Other markets do not have the rule where you can only provide one offer in a player’s lifetime. That is very unique to the Swedish market and regulator. There are different challenges which are unique for each market, but I would say for every market that does regulate the challenge remains the same. You need to tighten up and show leadership when it comes to compliance; you must take care in the application process and anticipate the time it will all take.
For us, as a payment provider, we were already a licensed Swedish financial institution and so we did not have as much to prepare for. That put us in a good position.
When we spoke with Samuel Barrett for a previous edition, he said you may need to suspend services if an operator was deemed by the Swedish Gaming Authority or courts to have breached the terms of the Swedish Gambling Act. Did you need to do this at any point?
We had a case of that this year, where an operator had its license revoked and obviously we removed our service after that. The operator themselves had to shut down their own website. We have only had to do it one time in the year.
In May, you announced a merger with Silicon Valley-based PayWithMyBank. Can you describe the significance of this deal? Does it pave the way for expansion into US gaming?
That’s an interesting question. When it comes to our merger with PayWithMyBank, we have constantly been listening to what our clients want; the markets they want to go into or the ones they need assistance with. Obviously, the US is quite high on their list of priorities.
This merger with PayWithMyBank is a huge opportunity to push that market from our side, together with the operators. In terms of gambling clients, PayWithMyBank already has clients within the gaming industry in the US, so this is not totally new to them. It’s a great stepping stone for us into an extremely attractive market.
This is about positioning ourselves so we are able to capitalise on the ever-growing use of bank-to-bank transfers, which is a growing trend in the US.
Are there any other new markets you are looking at entering?
We’re not in a position yet to say specifically what they would be, but we are working on launching in new regions. Trustly has gone from being an EU provider to a global provider and we’re aiming to continue doing that. Which market comes first and when it will happen is something that is still a little too far away to predict.
What challenges do you foresee for 2020?
The gaming space is always a competitive market. The markets will become more populated with competition and regulation. But with this increase will also be opportunity.
In our case, Trustly is in a position to turn any challenge into an opportunity. We have been preparing, even with PSD2, API and open banking. We are looking to launch new products and improve our current offerings.