We have made an exclusive interview with Ozan Payment Services and Electronic Money Inc. CEO Ömer Suner for the Fall 2020 September & October issue of Fintechtime Magazine.
We have met with Ömer Suner, CEO of Ozan Payment Services and Electronic Money Inc, and his team. The company received the license to operate as an electronic money organization with the board decision issued by the Turkish Banking Regulation and Supervision Agency on September 12, 2019.
You are one of the most experienced names in the sector. You have employed your vast experience in finance and technology in many corporate firms and startups. And currently, you are in Ozan to further employ your experiences and realize your dreams. First of all, we would like to congratulate you. Can you briefly introduce Ozan? What are your plans? Who is your target audience? What will be your priorities?
First, I would like to thank you very much on behalf of the Ozan Family. We have started our initiative by taking fast yet firm steps. Ozan provides many groundbreaking features. In a nutshell, our goal is to provide financial services to more than 20 million adults who cannot benefit from banking services for various reasons. Besides, Ozan will bring a breath of fresh air to the fintech sector with the projects and developments it will undertake in the field of “DeFi” within the current context in which the future of fiat money is questioned. To that end, we aim to be far beyond the ordinary applications that end-users and micro-SMEs briefly take a look at or delete their notifications without reading. We will exist in people’s lives, not on their phones, and in the businesses of SMEs, which are the locomotive of the economy. So, you will always have a valid reason to check out Ozan. Please do not think that we will do all this only within the borders of Turkey. As we always underline, our aim is to become a prominent player in the global market with the support of our group. We are not far from the global market. We have an electronic money license in the UK, as well as group companies with both electronic money and banking licenses in the US and Europe. To sum up, we have sufficient power and competent and experienced staff necessary to achieve our goals.
We know how much you care about team spirit. So we are sure that you have formed a competent team. Well, if we go into a little detail, can you give us information about the products and services that Ozan will offer us? What kind of transactions can we perform with Ozan? In what part of our lives will it be and how will we reach Ozan?
Ömer Suner: “By downloading the “Ozan” application to your phone, you can easily and safely perform your daily financial transactions 24/7. Ozan Wallet will include a great variety of functions such as opening an account, 24/7 money transfer, contactless payment, domestic and international bill payments, trading of domestic and foreign companies’ stocks, online gift card, cryptocurrency trading and purchasing game codes (e-pin). In addition, we will introduce our prepaid card Ozan Card to end users with TROY, Mastercard and VISA card schemes, through thousands of retail outlets in Turkey. In this way, Ozan users will be able to make payments anywhere in the world. We also aim to provide small and medium-sized businesses and freelancers with financial services with our Virtual POS and Mobile/Soft POS services. In addition to all these, you will be able to use Ozan for your hobbies, and by hobbies I mean fun ones like games, music, movies, TV series and sports. As Ozan, we will have many exciting surprises and collaborations with world-renowned companies in these areas. Thus, we will quickly turn the Ozan application into a “SuperApp“. That’s all I can say for now. My colleague Emirhan Gökalp, who is responsible for our products, can further explain what people can do with Ozan.
Emirhan Gökalp: “When you think about your daily routine, you can easily realize that your financial transactions take up an important place. We can list many examples, such as using a taxi or public transportation, spending money on meals, grocery shopping, paying bills, purchasing gift cards and transferring money to your relatives abroad. Ozan app aims to help you easily manage such needs. In addition to these, we will soon offer our users the features that will allow transferring money to cryptocurrency exchanges and track decentralized financial products known as “DeFi“, as well as ensuring that online game codes are just one swipe away for gamers. Besides, if you are in the e-commerce business, you can receive payments and track your receivables instantly with Ozan.”
2020 has been an interesting and innovative year for everyone. So, what are Ozan’s goals for 2020 and the next period? What kind of innovations awaits your users?
As Ozan team, we work with incredible motivation to come up with the best solutions in the areas concerning the daily lives of our users. In Ozan platform, a variety of brilliant ideas converge and materialize whereas utmost importance is attached to security, user experience and privacy. And our priority is to truly get to know our users. By saying “getting to know our users”, I mean much more than sending just a birthday message or e-mail to users. As Ozan, we will score the unbanked populations within the framework of the Personal Data Protection Law and the General Data Protection Regulation with the opportunities provided by technology and without compromising data security and privacy. And we will introduce micro credit to these masses through our group companies. Our main goal is to make people’s lives easier with microcredit. For those who are already in the banking system, dividing a ₺100 shopping into 4 installments is an ordinary situation, while paying an ₺80 electricity bill can become a real issue for unbanked people. Today, half of the world’s population is outside of the banking system for various reasons. The situation is similar in our country. Scoring this population and providing them with financial products that will make their lives easier is a small step for us, yet it is a great source of happiness and pride on our behalf when we think about the people whose lives we will improve. In addition, it is among our main goals to score the alpha generation, who are skeptical about the banking system, and to provide them with financial products. With our cooperation with Veloxity, one of the leading technology companies in its field, we will do what banks cannot do and introduce micro-credits to our users with the scoring we make based on their behavior. At this point, we will focus entirely on making the lives of our users easier. People can relocate easily at this age. However, they leave their relatives and friends behind. Thanks to our application, someone working in Turkey will be able to pay the electricity bill of their family in Azerbaijan. In addition, our users will be liberated from the unbearable weight of carrying cash thanks to our prepaid cards with Troy, Mastercard and Visa logos and will have Ozan Cards that they can proudly carry in their wallets and spend wherever they want. We also attach great importance to our cooperation with BKM Express, which we regard as a key player in the ecosystem. Our innovations are not limited to this. As the Ozan team, we have kicked off our work to establish a Blockchain Lab. In this scope, we will form a strong team that will be a leader in this field in Turkey.
“Blockchain” is a well-defined term in the global market, but it is still quite a vague term for many people in Turkey although it has been frequently mentioned. We cannot say that this term is widely understood in our country. So, you aim to spearhead the sector in Turkey by establishing a Blockchain Lab. Can you tell us about what will be produced in this Lab and what your ultimate goal is?
Blockchain technologies herald the start of notable projects in the insurance, logistics, healthcare and finance sectors. It is an important tool for the “trust” element in the system. In this framework, it lays the groundwork for the next technological breakthrough that will dramatically change our relationship with fiat money. Although these technologies and their areas of usage are spreading rapidly, the process of turning them into tangible products is still in its infancy phase. For now, we are mainly interested in the financial product aspect of the blockchain. We want to be the number one gateway for our users to access the latest investment and financial instruments. Therefore, as Ozan, it is very important for us to make blockchain products and tools as accessible as possible to our users.
We have established the Blockchain Lab since we needed an agile and multidisciplinary team to deliver blockchain technologies to our users as quickly as possible in line with our vision. The Blockchain Lab is an outlet that will compete in the blockchain ecosystem alongside the Fintech ecosystem in blockchain technologies. Within the Blockchain Lab, we aim to present the existing financial products to our users first, and then offer unique solutions that are the products of our research and development activities. While establishing the Blockchain Lab under the umbrella of Ozan, we set out with the vision of democratizing the financial tools and services of the future, and making them easily and safely accessible at a global level. In this context, as part of our roadmap, we will soon announce our unique products and services, which will be a solid bridge between traditional finance and new generation financial networks facilitated by new generation financial networks and blockchain technologies. It is not acceptable for us that the model that allows users to easily access and use new generation financial instruments and systems is still not established in 2020. We are targeting to open the doors for everyone that only 1% had access to before.
The pandemic has also made us question our relationship with physical money. What would you like to say about fintechs in Turkey, their solutions, accessibility and overall potential?
I can say that we, as Turkey, have gained surprising momentum in adapting to the behaviors brought by the pandemic. Although using QR code is still very new and not established in Turkey, there has been a significant increase in both QR code usage and contactless payment in the country in the last 5 months. As of March 18, 2020, the limit of contactless payment, which offers a hygienic payment experience as well as being secure, has been increased to ₺250. The share of contactless payments within the face-to-face card transactions was 15% in January 2020, while it has reached 33% in June 2020. Let’s just say that both businesses and consumers have adapted to this process very quickly. We already had contactless payment and paying with QR code on our agenda regardless of the pandemic. We design all of Ozan’s products and services by prioritizing the health and safety of people. And we embarked on our journey with this priority in our minds. In addition to all these, fintechs have a major role at this point. There are many things that can be done. But I think one of our primary duties is to turn the features like QR code and contactless payments into a habit. The next step should be to clearly explain to our users what the blockchain is and what it does, and most importantly, we need to raise awareness of the users in this regard. As Ozan, we are taking a major step and establishing a comprehensive Ozan Blockchain Lab, as I mentioned before.
We have seen you in many large-scale e-sports projects. So we know that you have an interest in and closely follow the e-sports and gaming market. There are 32 million active gamers in Turkey and the gaming industry has reached $1 billion as of 2020. This is quite a large volume. As Ozan, will you have any projects specifically targeting the game industry and gamers? What is your roadmap on this subject?
Of course we will! Ozan cannot remain indifferent to such a huge and entertaining world. We will show our interest in the gaming ecosystem by creating a world, in which we are currently working. It will be a gamer’s dream world. Along with providing full support to e-sports teams, creating our own e-sports ecosystem, creating opportunities related to games for our users, and bringing them together with online/offline activities, Ozan is ready to support young people whenever they need, especially in terms of music, entertainment and education. We will demonstrate this with the actions we will take very soon. And most importantly, the world we will create will also be the voice of the youth and gamers. As their dreams change, we will change as well. By caring about their experiences, we are building a platform that will constantly evolve in order to create a world just like they want. To sum up, as Ozan, we will side with all our stakeholders in the gaming ecosystem, including domestic and foreign game companies, individual gamers who play “traditional” games, and e-sports teams. We will always be there for gamers and e-sports enthusiasts by creating many advantages and opportunities not only in terms of their in-game needs, but also in other aspects such as food, clothing, education and travel.
Payment companies were expected to generate $1 trillion in new revenue worldwide by 2027. Could the current situation change these data? Is the payment industry ready to embrace this wave of change?
Although we are really concerned about the pandemic, we see that it affects the development of the sector positively, as it should, and we expect that this development will continue. In fact, the $1 trillion target could be achieved sooner than anticipated. As already known, the payment industry is a sector that cannot exist on its own. It is an ecosystem and a collective consciousness is needed for its sustainability. In other words, we offer our products and services to users by employing the latest technologies and the highest security system. However, users who will receive and make payments also need to be conscious and eager to learn in this regard. As I have mentioned before, Turkey has come a long way in this regard in the last 5 months. There were significant improvements also on a global level. During this period, e-wallets and contactless cards have been the leading payment methods that benefited from the change. At this point, the primary duty of fintechs is to turn this situation into a habit, not limiting it to the pandemic.
Even though Turkish banks have made great progress in terms of digitalization and mobile applications, there is still a long way to go in e-commerce. We are gradually evolving into a world without POS. And the current crisis is accelerating many of the developments we talked about earlier. So, what kind of a future awaits us?
Our financial system is banking-based and we are much ahead in terms of digitalization and mobile applications, but unfortunately this does not meet the expectations of more than 20 million “unbanked” people who do not use banks. Just to avoid opening a bank account, people travel miles from their homes to send/receive money or pay their bills. We work to make people’s lives easier and we develop our products completely in line with such needs. Not everyone has a “card”, but every home has a smartphone. People should not risk their time or their health because of their basic needs.
Although we have a long way to go for a world without POS, we have at least seen how quickly we can adapt to changes during the pandemic. And as for e-commerce, Turkey is already a very assertive country in this area. So we know that Turkey has the highest demand for e-commerce in Europe during this period. With the increasing demands, although the payment infrastructure and methods seem to work smoothly, there is actually a lot of room for improvement. As Ozan, for those who want to start their own e-commerce website or who want to move their sales to online platforms such as Instagram, we have different payment options such as payment by link and softPOS, which transforms a mobile device into a POS device, within the scope of our virtual POS product. The unbanked population we have mentioned had serious difficulty in benefiting from e-commerce during the pandemic. While the people involved in the banking system could easily benefit from all the advantages of e-commerce, from hygiene to fast delivery, the unbanked could not benefit from them. Moreover, they had to use methods that are obsolete in today’s world, such as cash on delivery, and they paid extra for it. This situation created a tremendous workload for both companies and individuals, especially in cancellation and refund processes. On one hand, endless product variety and delivery within minutes are available on the supply side of e-commerce. But on the other hand, more than 20 million people still do not have a bank account. As Ozan, we will try to solve these people’s problems both with our prepaid cards and Ozan Wallet.
The COVID-19 crisis initially increased interest in sectors such as retail and e-commerce, thus bringing great opportunities for fintechs. The value fintechs add to these industries is obvious. This includes redesigning online purchasing, developing smarter authentication standards and promoting contactless payment. What would you like to say about this subject? What should be the priorities, what kind of problems may arise and what kind of solutions can be offered? What are your suggestions?
Despite all its negative impacts, the COVID-19 caused some improvements and positive developments in the field of finance. On a global scale, especially the challenges in the field of “Know Your Customer” (KYC) that stem from the face-to-face KYC method have been eliminated as the processes have become faster and more user-friendly with digital improvements. Thanks to this development, people will now be able to open an account through a fintech or a bank within minutes by making use of various mobile technologies such as video calls. So you no longer need to go to a branch. This is one of the several positive aspects of the tough times we’re going through. However, since we have not yet been able to fully reflect the developments in this field in our legislation, we cannot make our users benefit from these advantages completely. On the other hand, contactless payment technology, and especially contactless cards and wallet solutions offered by fintechs in Turkey, contributed significantly to hygiene control and the prevention of the spread of this disease. At the same time, the fact that the Interbank Card Center (BKM) increased the contactless payment limit to ₺250 led to exponential growth in this field. The number of contactless payment transactions has increased by 50% since the outbreak of the pandemic.
The process we have been through has shown that with the economic stagnation brought about by the pandemic, the fintech world has become crucial for users who cannot access financial services or who need cheaper and faster access. Digital solutions are needed to help people stay at home and maintain social distance for preventing the spread of the virus, including using digital credits in order to meet cash needs or contactless payment. With the “digital onboarding” process, which has become more widespread across the world, the procedures of becoming a customer in fintech organizations, which include authentication, address detection and signed contract processes, can be done with digital platforms. This process does not only prevent the spread of the pandemic, but also rapidly increases the accessibility of fintech organizations all over the world. On the other hand, as I mentioned before, the inability of our country’s legislation to adapt to the current situation is one of the main obstacles between us and our users. Although there is always a “gap” between the legislation and the market by the very nature of business, this “gap” has widened a little too much in the current period. The reflection of the current situation on the relevant legislation in consideration of the risk perception will be one of the biggest steps toward the goal of providing value-added services. Apart from these, we can say that consumer financing, especially in e-commerce, will be more important for both commercial and individual users. We cannot ignore the fact that data science will become even more prominent and the importance of individual “scoring” will increase, including users who have not previously formed any risk scores.
All the recent innovative developments, including the currently tested facial-recognition payment, the method of payment with thoughts that is expected to become a reality soon, the use of biometric facial recognition technologies, and the real-time cross-border payment system, have heralded how the payment industry will be in the next decade. Will the COVID-19 crisis expedite the introduction and spread of such developments in our lives?
These are all “payment method” instruments. It doesn’t matter if you use a “card” or a “number block” or a “code block” you put under your skin, or even your face for the payment method. What really matters is to implement the method and businesses that will accept these payment tools, and not to compromise on security and privacy. With COVID-19, the advancement and spread of these technologies has certainly accelerated. The important thing is not to slow down the pace of developments when the pandemic is over. In the context of Turkey, the country should first bring customer acceptance principles in line with the current standards. In addition, fintechs in Turkey should be able to operate in money markets like banks and become members of the funds transfer system, if necessary, in consideration of their capital adequacy.
In the field of payment systems, competition is intense, interest is high, and it is very difficult to be permanent. As one of the oldest players in this sector, what would you recommend to those who want to be permanent in the sector?
First of all, it is necessary to choose your companions very carefully. We are in a sector that is very open to development, constantly alive and requiring a lot of effort. As Ozan, I think we are very fortunate in this regard because everyone in our team does their job with passion. Our team spirit and sense of responsibility are very strong. Of course, this is not only limited to the employees of the company. You also need to choose your partners well and act in harmony with them. We have made the right decisions in this regard. As the Ozan team, we have always been very clear about what we want and considered three aspects while choosing the agencies we would work with: adaptability to the current agenda, commitment and experience. When we found the agencies that met these three and even more, we said OK. We work with an incredible energy and cooperation. We are working with Krombera for social media, Gaming in Turkey for our gaming and e-sports strategies, and Ünite Edelman for our PR and communications. We are very excited about the work we have done and will do together in the future. We need a team that will side with us while we are managing our projects that will make a major impact. I think that we work with the agencies that understand us in the best possible way towards our goal of expanding Ozan to the global market. Another key word is “adaptation”. Our agendas can change very quickly due to the pandemic and the dynamics of our country. Following the agenda and adapting to it can be really hard. If you can adapt your work to the current agenda, you keep both yourself and your brand alive, which is another key factor that contributes to the permanence of your presence in the sector. Lastly, I suggest relying on facts and figures that are not based on subjective data. If you think that the most beautiful color in the world is purple but the data says blue and you ignore it, an unhappy ending will be inevitable. Our industry is challenging yet fun. I wish everyone in the industry good luck.