Why are we paying so much for payments?

Most consumers and businesses don’t realise that enabling a single transaction can involve up to ten different players: issuers, acquirers, processors and so on, with each party taking their cut. Each extra link in the value chain increases the cost – as well as the complexity and risk – of payment services, and merchants with shrinking margins cannot afford to waste money on payment services that are burdensome and fragmented.

The problem for merchants is that payment services today don’t meet their needs. Innovation in payment technology has long promised increased convenience and utility, but the reality has not lived up to the hype, and businesses have been exploited by an expensive and complex “value” chain for too long.

Here’s how the traditional payments value chain affects consumers and merchants:

1. Cost: Multiple providers have increased the CAPEX/OPEX cost of payments. In an effort to offset these costs, merchants are passing them on to consumers who are unknowingly footing the bill without seeing the benefits. Making a payment abroad is a clear example of how consumers are stung with excessive and often hidden costs. By removing unnecessary links in the value chain, foreign exchange fees can be reduced by as much as 5%.
   
2. Complexity: A myriad of providers creates a headache for merchants. Payment services take too long to integrate, are inflexible at a time of rapid change, and do not offer the visibility and control merchants require to run their business.
   
3. Risk: Security is fundamental to payments. Any breach could result in serious fiscal and reputation consequences. ‘Gaps’ between technology providers compromises security and increases risk.

So, if we want to start paying less for our payments – and reduce their complexity and risk – we need to unshackle merchants, small businesses and consumers from this complex and inefficient ecosystem. We need to trim the ‘fat’ by removing the excess links in the value chain to make payments simple, seamless and secure.

And that’s where Kalixa comes in. Kalixa is here to disrupt the payments market. With products that cover virtually every area of the value chain – from issuing and acquiring to acceptance – Kalixa owns its own payments ecosystem. This means that Kalixa customers only need Kalixa, rather than a sequence of providers along the value chain.

One integration, one platform and one company: Kalixa is turning what merchants have typically seen as a cost into competitive advantage.

Kalixa Pay prepaid MasterCard® launches in Austria

Today is a special day for the Kalixa Group: we launched our prepaid MasterCard product, Kalixa Pay, in Austria. It’s also a special day for the 90 Kalixa employees in our Vienna offices: they can finally start using the award-winning product they’ve been developing, perfecting and living since 2007.

The Kalixa Pay prepaid MasterCard is now available in Austria

Kalixa Pay already has over 150,000 customers across Germany, Italy and the UK, offering them a cost-effective contactless-enabled prepaid MasterCard with unique travel benefits, and we’re very pleased to now be able to offer those benefits to the Austrian market – and our Vienna employees.

So why is our Vienna team so excited? Apart from the obvious excitement that comes with a successful product launch in a new country? Well, Kalixa Pay is the best travel-money product available in Austria. It offers the best foreign exchange rates, zero commission, worldwide acceptance and no FX fees (until the end of 2013) when used abroad.

The Kalixa Pay Card draws funds directly from an e-wallet. It offers consumers one wallet and one way to pay, making payments simple, seamless and secure – online and on the high street – including contactless Tap & GoTM payments at thousands of retail outlets, such as Austria’s leading supermarket, Billa.

Our prepaid Kalixa Pay Card provides customers with full control over their spending. Unlike using credit or debit cards, customers can only spend what they load, and can keep track of their finances online, or with our free SMS and email balance updates and transaction notifications.

Ed Chandler, CEO of Kalixa Group, said: “The launch of Kalixa Pay in Austria is a significant step in our ambitious growth plan as we continue to disrupt the global payments market with a range of products that help people to make and accept payments simply, seamlessly and securely. We will be rolling-out Kalixa Pay to new markets very soon as part of our on-going effort to push the boundaries of payments in Europe. Exciting times ahead!” concluded Chandler.

As Ed says above, it’s our goal to simplify the way consumers, businesses and merchants make and accept payments, and Kalixa Pay is an integral component of that plan. To date, we’ve invested more than €100 million in designing and building our integrated platform which also includes our two other core payment solutions: Kalixa Accept helps businesses accept online payments, and the soon to be launched Kalixa Pro offers non-cash payment solutions for small businesses.

With Pay, Accept and Pro, Kalixa covers every area of the payments chain – from issuing and acquiring to acceptance. In short, we own our own payments ecosystem, which helps us turn browsers into buyers, risk into reward and cost into competitive advantage.

In addition to our own branded Kalixa products, we also power a range of other cutting-edge payment solutions, including moneto, the first NFC enabled iPhone prepaid wallet in Europe, and Watch2Pay, the first watch in the world that can be used for contactless payments.

We’ve got 130 employees, in London and Vienna, from 25 nations. We’ve got twelve years of industry experience. We own our payments ecosystem. Over the past twelve months we’ve processed transactions worth €2.6 billion for over 300 merchants (including Austria’s WESTbahn). We have massive support from our single shareholder, bwin.party. The Kalixa Group is going places – and today’s launch into Austria is just the beginning.