Planet Payment is a processing services provider that specializes in foreign currency exchange and conversion services. The company operates in 20 countries and actively provides conversion services for 80 currencies.
Its "Pay in Your Currency" service provides merchants like retailers, hotels and restaurants with technology to help foreign consumers better understand the prices of goods and services by providing bills and invoices in their home currency and language. Another offering, "Shop in Your Currency," provides e-commerce tools that let consumers see real-time price conversions when shopping on a foreign merchant's website.
The technology's been adapted for other uses, like a partnership with ATM vendor Payment Alliance International to provide foreign travelers in the U.S. the ability to view, select and manage currency conversions from the U.S. dollar amount dispensed at ATMs into their home currency.
Planet Payment's stock has been traded on the AIM (a submarket of the London Stock Exchange) since 2006. In December, its Securities and Exchange Commission registration statement was approved and its stock began trading on the NASDAQ exchange. However, at the same time, Planet Payment cancelled plans for a $75 million initial public stock offering, "because of unfavorable market conditions," according to an SEC filing.
Philip Beck is the CEO of the Long Beach, New York-based company, which he founded in 1999 after spending nearly two decades as an international banking and corporate attorney, "helping businesses do business in different countries." As he tells it, this experience—along with the rise of the Internet and e-commerce—led him to begin offering professional services to help merchants tackle the regulatory and legal challenges associated with doing business internationally.
But it quickly became clear that merchants' primary focus was on international payments processing. By 2001, Planet Payment had evolved into a payments processor, building a cloud-based infrastructure for issuers and merchant acquirers to provide currency conversion services.
Beck spoke with PaymentsSource about his company and its role in international commerce in the following interview, edited for length and clarity.
PaymentsSource: Describe the challenges that come with transacting business in multiple currencies. How can technology help both merchants and consumers with these issues?
Beck: It's not just about card types and local debit schemes or differences in security or encryption. It's also about basic language and currency. Think about a place like Hong Kong, where even if you're processing statements in English, merchants still need to be invoiced in Cantonese or Mandarin. And even if the operations people are seeing English on the screen, the names of the merchants are in Chinese characters and the amounts are in Chinese characters.
Our technology has the ability to handle different interchange regimes and different card types across multiple regions. We have one platform for the entire world, which is very unusual. That gives us a relatively flat technology expense base, from which we can expand into new countries to produce more volume and more transactions.
PaymentsSource: What is the value proposition for merchant acquirers to offer merchants and in turn, consumers, multicurrency payments?
Beck: The merchant acquirers participate in the revenue stream of international payments and localized pricing. We want to do anything we can to help merchant acquirers have better return on investment, make more money and have innovative, new products they can sell to merchants that will help them be successful.
It's better for merchants to have more clever ways to market their goods. If you're an online merchant and want to sell things internationally, then you need a multicurrency payments engine and gateway. If you're a point of sale merchant like a retailer, restaurant or hotel, it's clearly more convenient to offer foreign travelers the ability to check out and pay in their own currency and in their own language.
PaymentsSource: In July 2011, Planet Payment filed a $75 million IPO, but recently cancelled that stock offering in December. Why the change in course and what were the factors that led to this decision?
Beck: Planet Payment did file a Form 10 to list on NASDAQ as opposed to listing in conjunction with an IPO. We felt that this was the most efficient way to list on NASDAQ in the current circumstances, as we did not need to raise capital at this time.
PaymentsSource: Do you anticipate attempting a public stock offering again anytime soon?
Beck: We can't comment on any future plans to raise capital.
PaymentsSource: Can you give an example of a typical consumer and merchant experience with Pay in Your Currency?
Beck: With Pay in Your Currency, you make a buying decision at a merchant based on the local currency. When you go to the cash register, you get the option to check out in your currency.
For example, let's say a consumer checks out of a hotel in Hong Kong. The merchant tells the consumer what they're paying and the amount they're charged in pounds. So if the charge is £500, we will tell the merchant acquirer how much it's going to get paid tomorrow or the next day, depending on local settlement timing. Planet Payment then also works out whether the acquirer made money or lost money based upon the movement of the currency between the date of sale and date of settlement.
PaymentsSource: And what about Shop in Your Currency?
Beck: Shop in Your Currency is when you're a foreign cardholder shopping online or at a point of sale and you see prices in your currency. So you could be shopping online or at a retailer like a hotel gift store and you're seeing domestic pricing or in your own pricing and it could also be in your own language or a local language.
I think Shop in Your Currency is a more powerful product because it helps influence buying decisions and helps merchants sell more things.
PaymentsSource: Prices can be updated automatically online, but for transactions at the point of sale, are prices listed on retailers' shelves? Or can consumers look up prices at a kiosk or with their phones?
Beck: Retailers have scanning registers and scanning guns, so wherever you've got an inventory database, you've got the ability to do localized pricing. But it's still early because it's a function of technology and cost. You could tag your merchandise, but you'd have to retag is regularly, unless you did it electronically.
There's a convergence of technologies and other things coming and I think that's the future. The juxtaposition of mobile will help make the future of shopping at the point of sale look like the future of shopping online.
It used to be whenever you traveled the world, you saw prices in local currency. Then the Internet came along and you could buy things from your desktop, so retailers had to localize pricing. Now, when you're shopping at the point of sale, you might be using your mobile phone to do comparison shopping or getting offers, like coupons.
If RFID and NFC were really here—and they're not—you'd be able to go down shelves and see products with different pricing using a mobile phone to scan items. That's the future and it's coming.
PaymentsSource: Which are the most popular or most used currencies?
Beck: The top currencies are the U.S. dollar, euro, pound, and Japanese yen. It depends where you are in the world. The currencies you're accepting in the Middle East have a different profile than the currencies you're accepting in mainland China. For example, there are many interregional currencies that are important in Hong Kong, the Philippines and Taiwan that are obviously different from Brazil and Mexico.
PaymentsSource: Is there a typical profile for the types of merchants that use these services?
Beck: Our portfolio is split about 40% hospitality, 40% retail and the balance is a combination of e-commerce and other types of businesses. In the hospitality sector, it's big hotels like the Venetian in Macau, China and Hong Kong Disneyland. On the retail side, we do Carrefour stores in China and the Middle East.
Working with Vantiv in the U.S., we do Abercrombie & Fitch, Sachs Fifth Avenue and Dillard's. So we've got a broad spectrum of big box retailers and resorts and we've also got high-end retailers, including duty free stores in Asia.
PaymentsSource: Planet Payment recently expanded into Brazil, a country gearing up for a surge in foreign visitors when it hosts the 2014 World Cup and 2016 Olympics. Do you seek out partnerships with event organizers to connect with merchants to spread your offerings?
Beck: Not today. We work with the merchant acquirers and focus on being their collaborative partner. We're providing them with technology, product and training support in addition to day-to-day operational support.
PaymentsSource: So you rely on merchant acquirers to generate interest from merchants in locations getting ready for a big event?
Beck: That's right. We were there for the Olympics in other countries and the World Cup. In any vertical, it's a plus for foreign travelers and the Olympics are definitely a call to action.