Praful Morar is the Global Expansion Officer at Nuvei, a payments technology company with headquarters in Montreal, Canada. He’s responsible for driving the company’s global growth across Asia-Pacific, the Middle East, and North Africa.
Recently promoted in February 2022, he relocated from London to Singapore.
Before Nuvei, Praful spearheaded the sales teams at the Royal Bank of Scotland and RBS Worldpay. He also worked as the Corporate Development and Strategy Director and later the Chief Strategy Officer at Safecharge International.
Praful joins the second episode of the Payments Powerhouses podcast to discuss exciting fintech and payments trends in Asia, as well as cryptocurrency's development into a mainstream payment method.
Listen to the podcast below, or read on for the highlights of our conversation with Praful.
Praful Morar: Thank you! I help Nuvei expand into global markets identified in our strategic roadmap. At present, we have a very strong presence in the USA, Europe, and Latin America. We’ve worked in Asia for some time and now want to focus on developing it. We’ll begin by examining our existing merchant base to help them expand globally.
We chose to operate from Singapore because Nuvei had already built a business here. It is the most agile place for payments, given the widespread availability of the relevant partners based here.
In addition to Singapore, Nuvei has a presence in Hong Kong, Australia, and the United Arab Emirates. So these are the markets that I’m targeting. Further down the line, I’ll look at other regions, such as India, Japan, Korea, and Southeast Asia.
Across all these markets, I’m most interested in the different ways that each one is developing. Generally, digital payments are growing at a different pace in each market. We’ve recently seen the emergence of methods like Buy Now, Pay Later (BNPL), alongside the expansion of major card brands like Mastercard, Visa, and JCB.
Cryptocurrency is also a field that interests me. I look forward to seeing how it will grow in each market.
Both markets experienced a major shift towards digital payments during COVID-19. Before the pandemic hit, there was hardly any difference between physical purchases and online shopping in Europe and Asia - I’d say they were on par with each other. But with the pandemic forcing everyone to stay indoors, we noticed a shift in consumer patterns. Based on Nuvei’s figures from 2021, at least 86% of our revenue came from ecommerce as more people chose to make online purchases from the safety and comfort of their homes.
As for differences between the two markets, Europe’s payments ecosystem is more streamlined than Asia’s. Europe is split into two markets because of Brexit: the UK and the rest of Europe. Here, the payments ecosystem is quite singular and straightforward. You have fast bank transfers in the UK, while over in Europe, you have Single Euro Payments Area (SEPA) payments. This makes it easy to move money quickly in two core currencies: Pound Sterling (GBP) and Euro.
Conversely, Asia is a fragmented region, with each country autonomously running its own separate payments system. This makes it a lot harder to move money across different countries. However, payments are swift and straightforward within each country -- this is definitely the case in Singapore.
The impact has been massive, beginning from the basics of cross-border travel itself. Passports and logistics aside, even getting insurance has become very tricky as there are so many regulatory hoops you have to jump through.
And specific to payments, Nuvei has had to drive two different companies to deliver the same product. We began by setting up a company in the UK, complete with all the necessary licensing requirements and contracts set up. We also trade in Europe, so we have to establish a separate set-up there. This dual approach is entirely driven by regulatory differences in the UK and Europe.
I have family living here in Asia, and they told me that during the COVID-19-imposed lockdowns, it was difficult for folks to be out and about. They couldn’t socialise with each other or shop outdoors. With folks confined to their homes, what recourse did they have? And this is where ecommerce really shone as folks turned to online spaces to do their shopping. In the foreseeable future, ecommerce will continue to expand in Asia.
This situation is different from the UK and Europe, which are going back to pre-COVID-19 behaviour of going outdoors without masks. However, we still see a high volume of online orders, as people continue to work from home much more than they did in the past.
Well, I’ve been working in this space since I was 16! That’s just shy of 40 years, so I’ve been through many phases. From physical banks and ATMs to online payments and ecommerce, I’ve witnessed how the world has drastically evolved.
Above all, the most powerful tool invented in my lifetime is the mobile phone. Everywhere you go today, this is all you need to perform various tasks, from making payments right down to tracking your COVID-19 vaccination status. This is vastly different from 10 to 20 years ago when there were so many limitations around the conveniences that we take for granted today.
Despite all that I’ve said so far, cash remains relevant today, as there will always be a demographic of people who don’t have access to banks and digital payments.
As a payment service provider, Nuvei creates a global marketplace for our merchants to trade and sell to their consumers via a single point of integration. We have the standard cocktail of credit cards and debit cards within this space, but we’ve also added to this mix with alternative payments. Today, we have around 530 alternative payments to credit cards.
So if you choose to sell your goods and services in both Japan and Brazil, Nuvei can help you set up capabilities for local payments in these countries. This is where the expertise of longtime partners like 2C2P comes in, as they help us set up payment capabilities in regions where we don’t have a presence.
Crypto is one of the alternative payment methods that we support. The idea behind this is that if you can pay via a local payment method like NETS in Singapore, you should also be able to use crypto to make payments. That’s why we added support for around 40 cryptocurrencies.
To this end, we also acquired Simplex, a Payment Solution Provider (PSP), to enable users to use their fiat currencies to buy crypto and pay for goods and services. We did this because we saw tremendous growth in the market, giving users the flexibility to make purchases and hold their cryptocurrencies as they choose.
There are three types of cryptocurrencies. The first is your standard crypto, which everyone recognises as highly volatile and prone to market swings. Standard cryptocurrencies like Bitcoin and Ethereum are built on decentralised blockchains. People purchase these coins in the hopes that their values go up the longer they are held.
The second type is stablecoin. It’s in the name: stablecoins are, well, stable. Stablecoins are generally set up by private equity companies or private entities, who give them to users to store value or use as a retail tool. Although stablecoins are supposed to be stable by definition, they’re volatile, as with any foreign exchange.
The third type, which is the most interesting, is central bank digital currencies (CBDCs). Issued by government-led central banks, CBDCs can be used to store some level of value and also as a payment tool. CBDCs facilitate the movement of money between banks in a much more secure manner. To this end, China is one of the first countries in the world to set up CBDCs.
One of the cryptocurrencies that we brought in enables merchants and consumers to purchase goods and services. The adoption of crypto in retail will take some time, as it does involve a mindset change.
Mobile phones can help to simplify the process a little, but it may still be difficult if the crypto payment experience involves a redirect. So when consumers pay for something in a shop, the process can still be a bit clunky. However, this will get better over time as they get more experienced.
From the merchant’s perspective, the experience they deliver to the consumers will also improve over time when they have worked in the space long enough. Ultimately, the bulk of the traffic that we support and process is for folks who want to grow the value of their cryptocurrencies for the future.
We did a paper on this a month and a half ago! Generally, anyone who provides a service online -- for example, dating sites, game providers and gambling operators -- is inclined to use crypto as a payment method. This is especially evident in Europe and the UK, but prevailing trends may change when the US enters the picture.
Podcasts like what we’re doing now really help! For older folks like me, we still need to read up and do our research to participate in crypto. And whenever you don't understand the new payment, the best thing to do is simply try it out on a small scale to build your confidence. It’s the same logic as when mobile phones were first introduced: you need to actually use these things to get comfortable with them.
I firmly believe that things will only get better, especially in Asia. The payments systems in this region have already started to form collaborations, which will speed up the process of using crypto to pay for goods and services.
When using crypto to make payments, you need to understand that you’re undertaking a risk. This is different from when you use a credit card - when you make a payment with a credit card, you personally authorise and capture it. And if you don’t like what you purchased, you can simply contact the merchant to get a refund or a chargeback. This is different from crypto. When you make a payment, the crypto you used is gone, and it’s impossible to get it back.
I think this is interesting! I’ve also seen other countries like Venezuela readily adopting crypto, and I support their decision. Crypto signifies the evolution of payments. It represents the next big step, and we’ll eventually see it forming its own way around regulations. I believe that if you regulate something, people are inclined to trust it more as there’s a clear money protection barrier that backs it up.
NFTs are one of the fastest-growing use cases of crypto, and they are born out of art. NFTs work like this: People look at a given image, determine its worth in terms of crypto, and then use crypto to purchase it. The image can then be traded on a marketplace in exchange for crypto or other NFTs. So there’s this emotional element tied to NFTs that is absent in the crypto trade; the value of an NFT is entirely subjective and lies in the eye of the beholder.
Apart from art, NFTs have also tapped into the gaming world. For example, you can look at an avatar that you create from scratch: its value begins at just ten bucks. Yet when you arm it to the teeth with knives, guns, and other weapons, its value skyrockets to 10,000 bucks. The avatar could then be bought off you, and you can begin to build another one.
In a nutshell, NFTs present the possibility of buying and owning virtual assets, which is a cool development. Furthermore, NFTs are built on the same blockchain system as crypto, meaning they enjoy the same security reinforcements.
What Nuvei has done so far is to analyse the market. Essentially, we’re focusing on products in both the physical and ecommerce fields. I mentioned before that our 2021 financials revealed that at least 86% of our revenue came from ecommerce. COVID-19 had a huge part to play here, but it’s also an indicator of the demographic of folks buying goods and services online.
At Nuvei, we split our operations two ways. The first way is organic sales, where our sales and account management teams reach out and sell to merchants targeting specific markets aligned to Nuvei’s strategy.
The second way is acquisition, where we focus on markets that have tangibly grown. So if you look back on our record, you’ll see that we've made about five or six acquisitions in total. Simplex is one of them, alongside Paymentez in Latin America, Mazooma and Base Commerce in the USA, and Smart2Pay. Nuvei’s biggest acquisition was on the digital payments side, where we acquired SafeCharge for USD 889 million.
As a public dual-listed company in Toronto and NASDAQ, we get a sense of where everything is. We do market and competitor research, and we constantly keep up-to-date with the latest market trends.
Despite all this professional stuff that we do, the best insights come from the ground: your customers. So we conduct quarterly business reviews, where we scrutinise our customers’ demands to see if there’s any need to launch a specific product or provide services to a region.
I don’t have a favourite payment method per se! It depends on where I’m travelling. So if I’m in Mexico, I’d gravitate towards OXXO Pay. And if I’m in India, I’d choose Paytm. Your mobile phone is the key to accessing all these different payment methods, which I love.
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Payments Powerhouses is a monthly editorial series interviewing the movers and shakers of the payments and wider fintech industry in Southeast Asia and beyond. If you’d like to be featured on Payments Powerhouses, reach out to us here.