India remains key priority as Adyen expands beyond payments: Gary Yang

Adyen's APAC President Gary Yang says India remains a key priority market, with plans to deepen its payments capabilities while expanding into fraud mitigation, loyalty, and usage-based billing

Dutch payments company Adyen is betting on helping global businesses collect payments in emerging markets such as India. Its platform lets enterprises and platforms worldwide accept more than 200 payment methods. In an interview with Ajinkya Kawale, Adyen's Asia-Pacific President Gary Yang discusses the company's India strategy, how it plans to use its payment licences in the country, and its push into products beyond payments. Edited excerpts:

 

Q: How is India placed in your global portfolio?

 We are a global fintech company having been there for around 20 years. Last year, we processed around $1.7 trillion in payments. We have about 5,000 employees globally, 29 offices, of which two are here in India, in Mumbai and Bengaluru. We are in India because we hear about the demand from global customers where they want help with this market. It is unique in many ways in terms of payment methods, different consumer behaviour. We have a trusted relationship we have built with them and it is a lot easier for them to use us here than spinning up another payment processor, another API integration, another set of reports, another relationship to manage. We entered India 7 years ago. Over time, we've acquired the payment aggregator (PA) licence, and the payment aggregator-cross border (PA-CB) licence. We are continuing to invest in India.

 

Q: India is a payments market with well-entrenched players, including those offering broader services and niche ones like cross-border. Do you continue to see growth here?

 The market is growing well. We also have a unique set of benefits that we provide to merchants. We have three foundational layers that are effectively the core assets of the business that allow us to provide differentiation. First, a single global platform. If a company wants to expand to a new geography, or if companies want to come to India; same API (application programming interface), same integration. It’s huge for speed because a lot of companies doing breakneck global expansion could light up in new countries in a week.

 

Second, licensing such as PA and PA-CB which is unique to India. In the European Union, United Kingdom and United States, we are a bank which allows for things like lending. Third, dynamic identification. We can have better rate optimisation, higher probability the cart succeeds, better fraud detection. While there are other payment companies out there, our ability to really drive revenue growth for companies, the 200 plus payment methods around the world like Unified Payments Interface (UPI) that we allow to access the world, it's unparalleled.

 

Q: You have a sponsor bank you work with here. Indian players speak about compliance burden for acquiring data such as Know Your Customer (KYC). Does that restrain you from doubling down in India?

 Our preference is to go full stack where possible. We have direct acquiring licences and bank licences in some. We are using a bank identification number (BIN) sponsor here. The vast majority of what we want to do, we can still do. It's really our stack. It's just using the BIN sponsor. We have deep partnerships with the BIN sponsors we work with. We also work with very blue-chip companies globally. We're not working with a bunch of SMBs (small and medium businesses) where you're not as clear about the source of funds. We work with enterprise businesses and platforms. So a platform will be the equivalent of a marketplace like an eBay, where they will have small businesses, but we work with a platform and we power them.

 

Q: Which are the other markets in Asia Pacific (APAC) you are in?

 The markets where we have offices are India, Hong Kong, Shanghai, Tokyo, Kuala Lumpur, Singapore, Sydney, Auckland. In China, we do not have local licenses, but we do help them with a lot of outbound business.

 

Q: What are your plans to expand India’s share to global revenues?

 We see India as a long-term bet. We continue to invest in the market. While we don't have any specific numbers, it is at a global level, including with our entire management board, India is a key priority country.

 

Q: What is required to expand the topline contribution from India? Adding more merchants, value added services (VaS), or software-as-a-service (SaaS)?

 We'll certainly continue to deepen our domestic product and the richness of the capabilities and the optimisations around it. Historically, the focus has been on payments but we have expanded beyond that. Closest adjacency is fraud mitigation. A lot of customers find it valuable to stop fraud. We have our own in-house authentication engine for 3DS. So while a lot of people outsource this, we believe in building it in-house. We believe by controlling more of the value chain, you can really find the global optima for how you convert the most customers with the least amount of fraud. We bought two companies over the past year. One is loyalty to help customers provide the right discounts to the right consumer at the right time. The other one is on usage-based billing. There's a large variable cost for usage, the token cost, particularly in artificial intelligence (AI). Companies need to be able to build that through, and they want someone to help them.

 

Q: Do you have any plans to get a banking licence in India or to acquire a stake in one of the banks?

As of right now, we have so much that we think we can do in terms of value we can add with the licenses we have. We want to really focus on that. Part of it is we work with enterprise customers, and so the quality is really deep. We'd rather focus on getting this right first. And then of course, let's see what our customer needs are over time. If it makes sense, absolutely we can explore it

 

Q: Is India profitable for you now? And do you need investment from the global arm?

 The way we look at our business, it's not one country within itself. We really look at it at a global level because for example, we have Microsoft using our India product or Oyo using our global product. We really try to stick to one global P&L which I deeply appreciate. We have around 50 per cent Ebitda ((earnings before interest, tax, depreciation, and amortisation)) margin globally as a business. We netted $2.7 billion in net revenue last year.