Checkout.com, a leading international provider of online payment solutions, began as a bootstrapped startup in 2009 under the name Opus Payments. Over the ensuing 9 years, entrepreneur, Founder and CEO Guillaume Pousaz built his company based on a progressive vision of the payment industry as transparent, efficient, and accessible. “I was fortunate to build an amazing company from scratch. It was a combination of luck and hard work,” says Pousaz in his self-effacing style.
Entry into Online Payments
Born and raised in Switzerland by intellectual parents, Pousaz went on to study mathematical engineering for two years before deciding that business was a better fit. It was during his third year of studying Economics in 2005 at HEC Lausanne (also called the Faculty of Business and Economics of the University of Lausanne) in Switzerland, as finals approached, that tragedy struck. Upon hearing that his father was diagnosed with terminal pancreatic cancer, Pousaz stopped studying, failed his finals, and consequently never returned to complete his degree. In December 2005, Pousaz’s love of surfing, led him to International Payment Consultants, a payments company in California. Seeing this as an opportunity of a lifetime, Pousaz worked 70-80 hours per week to learn the payments industry. Ultimately, it was the potential he saw in payments that led him to strike out on his own in October 2007.
Entrepreneurial Venture Begins
Pousaz’s first business was NetMerchant which sold European currencies to U.S. merchants. “The way payment processing works if you’re a U.S. merchant, even now with PayPal, is that payment processors will process your currency (euro, GBP, Swiss franc, etc.), give you U.S. dollars in exchange and usually charge you a 2% markup fee,” Pousaz explains. “In my view, this is either monetizing ignorance or not giving you what Visa/Mastercard really allows you to do.”
As a result, Pousaz’s fundamental business model was unique: NetMerchant would give U.S. merchants European currency directly and then have merchants go to their bank for their foreign exchange (FX) needs. Pousaz felt strongly that NetMerchant would not monetize ignorance and instead, would give you what Visa/Mastercard would allow and charge a fair price for this. “Obviously, we had nearly no capital and no technology and were “white label” of another technology company. We didn’t own anything. We were purely contract sellers, “ relates Pousaz. “We were selling contracts to banks. Merchants were interested in payment processing, but at that time, I did not own the technology. I did not own anything.” Pousaz ran NetMerchant with his partner for 2 years until October 2009.
Strategic Split: Vision for Checkout.com is Born
With completely different visions of what direction to take the business, Pousaz and his partner decided to part ways. Pousaz wanted to invest in the business and build his own payment gateway. “I saw that things were changing in the world around us and felt this was a business opportunity that I needed to double-down on,” Pousaz recounts. Those changes included seeing the fundamentals of e-commerce as opening amazing possibilities, the belief that increasing access to internet bandwidth would change the behaviors of people on the Internet, and the increasing access to credit that defined the overall health of the economy. “I felt this was an amazing opportunity for payments.” It was then that Pousaz purchased the domain checkout.com, among others.
Finding the Technology
In November 2009, Pousaz discovered a small company on the island of Mauritius with a team of 8-10 people that had built a payment gateway, had technology and PCI experience, but the user experience was poor. Always a dealmaker, Pousaz sold the team on the premise of Checkout.com, and bought the company. “You know how to code the payment gateway, but I know how to drive business,” retells Pousaz. “If you give me the code, I will guarantee to pay you three years’ salary. We’ll sign a contract and I will put the money in a bank account. I will fund the company, but I want everything for free.” A deal was made and Pousaz acquired the team and the code behind SMS Pay. “So now I had the technology, but I needed to find a sales team,” states Pousaz.
Different Approach to Building a Sales Team
U.S. merchants tend to follow a very coordinated path to global expansion – selling first to the U.K., Europe, and other English-speaking countries like Australia and New Zealand, maybe Singapore. However, Pousaz’s view was different as he assessed what was happening in the world. “China was the factory of the world, with some of the biggest e-commerce platforms selling internationally which means they were going to sell in many currencies and they were going to need the exact same service I was providing before,” explains Pousaz. “The approach we always had was I’ll give you 5-6 currencies for like (euro, GBP, Swiss franc, dollar, AUD, NZD), and all the others I can mark up the FX, but in a reasonable manner.” In April 2010, Pousaz opened his office in Singapore under the name Opus Payments, because Pousaz did not want to use his best domain name, checkout.com, on people or a business model that was untested. In 6 months, Opus Payments had rebuilt the gateway, started selling, and were on their way.
First Big Win
“Our first big win came in the summer of 2011 when we signed a merchant in Hong Kong called dealeXtreme (dx.com),” says Pousaz. “They were doing 10,000 orders a day. We were making about US $100,000 in net revenue per month out of this account. Within a year, we were profitable and able to pay all our expenses. We were fully profitable from that moment on. I never really took a salary because I was working for the long term.” To this day, dealeXtreme is one of those companies with millions of fans on Facebook, selling iphone covers and cheap electronics from China to the entire world. That merchant gave Opus Payments its start in Asia. At that time, there were only two companies Opus Payments was competing with: Global Collect, (now Ingenico ePayments) and PayPal. DealeXtreme had 100% of their business with PayPal until Opus Payments started working with them.
Opus Payments now had 30-35 employees and owned the technology, but they were still giving the contracts to another bank.
Regulatory Change Creates Opportunity
In 2009, the European Union launched the Payment Service Directive (PSD). Pousaz understood that if Opus Payments became regulated under the PSD in Europe, they could become a principal member. Although it was easier to run the business through Singapore and Mauritius, Opus Payments had a small-scale office in the U.K. where Pousaz was living. They wrote a business plan to submit to the Financial Conduct Authority (FCA), the regulator that licenses banks in UK. Their application was logged in April 2012 and approved by the FCA in December.
Rebranded as Checkout.com
The Opus Payments company that was launched in Nov. 2009 was rebranded into Checkout.com in April 2012. The company, technology, and people were the same, but would operate under a new name.
Checkout.com became a principal member in Europe of Visa in May 2013 and of Mastercard in June 2013.
Plan for Growth
“When you are a bootstrapped business, people ask why you are not doing marketing. Well, you have no money for marketing. We were sharing hotel rooms when we travelled and flying Economy,” discloses Pousaz. “We were using the money we had and we didn’t have much money. We were going to run the business profitably, keeping the money we made in the business. We would hire only as we earned revenue.”
Checkout.com built their platform and their own backend processing that combined with the gateway and the licenses to put them on an upward trajectory. There was only a handful of similar businesses in Europe. “We had the technology stack. Where other companies were focused on building their distribution and exposure, we were focused on building the “pipes and plumbing” that power payments,” explains Pousaz. “Today, we can say what very few companies can say: that between the merchant and Visa/Mastercard there is basically nobody else but us, and the technology is 100% proprietary. That is a pretty powerful statement.” Unlike some of their competitors who were venture capital funded and would have to sell someday to please their investors, Pousaz did not need an exit timeline. “We are built by entrepreneurs for entrepreneurs and we have a long-term play,” professed Pousaz. “Let’s grow at the pace we are growing and as long as we are able to pay our bills, everything is going in the right direction.”
Fast forward to 2017, and Checkout.com had received licenses for Union Pay, Discover JCB, all schemes globally, as well as integrating all the alternatives payment methods and all the European direct debits. Checkout.com’s value proposition to merchants was clear: Checkout.com gives you access to all major credit/debit card brands, all the major APMs, and gives you all of this through a unified reporting platform and API. It is apparent when speaking with Pousaz that he believes strongly in Checkout.com’s product and its employees, saying, “A company is only as good as the product and the people that run it. Checkout.com is an extremely technology-driven company, and because we built everything ourselves, nearly 60-65% of our employees were engineers. We had no marketing, so our product had to be irreproachable.”
Checkout.com has grown significantly with 200+ employees and 8 offices currently and has been profitable since 2011. From Pousaz’s perspective, “We have amazing opportunities ahead of us, while retaining 100% of the equity.”
Target Position in the Market
When asked how Checkout.com has approached the market, Pousaz explains that “We tell merchants, only half-jokingly, that when you choose Checkout.com you are not paying a brand premium; you’re not paying for an investor to make money. You know what you are paying for and you are paying for what you are actually getting. The fundamentals of the business are that I want transparent pricing and no monetizing of ignorance. With Checkout.com, there are no hidden fees.”
Checkout.com believes 100% in technology and that the product is the core of everything, so they built the infrastructure behind it, but at the same time they believe that their customers deserve top service. Consequently, when contemplating how to distribute their product they realized that on the low-scale, for small merchants, there was already Stripe and PayPal. “These two companies have nearly endless pockets and can advertise as much as they want, so if Checkout.com was to spend our few marketing dollars there we would just burn money with no real chance,” states Pousaz matter-of-factly. “And if we go to the high-level, big merchants, we have less credibility, so that’s not the right spot either.”
Checkout.com’s high touch customer support approach with a bit of a “boutiquey” feel, but still very tech-driven, is working really well in the mid-market segment which is “people who have raised a Series B, (basement, to WeWorks, to office) that now have 20-50 employees, have a fast-growing business with between $20M – $200M a year in revenue, and perhaps just hired a CFO or head of payments,” reflects Pousaz. “This is the perfect Checkout.com customer. When we find someone at that point in time, we keep him forever. We have almost no churn. All our merchants love us. A lot of the marketing today is word of mouth, won through customer referrals. This segmented approach works well for us.”
Pousaz continues, “That mid-market segment has proven to be really good for us. We don’t lose business, we price them well from the beginning because we control everything. This was a big factor of success for Checkout.com… to really contemplate where we would fit. Picking a place that was unoccupied worked very well.”
Building the Right Team and Culture
Anyone who works for Checkout.com knows they have a very strong culture component. For Pousaz, it all comes down to people. With 200 employees, Checkout.com has 16 Human Resources (HR) related people, but Pousaz does not like the term HR. “I prefer People Operations,” explains Pousaz. Checkout.com divides People Operations into three distinct operations: People Growth (focus is on leadership and how to get the best from their people), People Operation (managing the day to day, traditional human resource role, benefits), and People Culture, Experience and Engagement (how to make the life of their employees as good as possible via the environment we provide).
Pousaz summarizes Checkout.com’s people approach by saying, “The way I look at it is very simple. Today, nearly 75% of the cost of my P&L is people, so inspiring the best out of the people around me is extremely important because I want to be able to optimize the yield of the people that work here. It sounds very quantitative, but if people are happy, they work hard, they are engaged with the company and that is the best way to maximize my investment and ROI. I have always believed this, since the early days of Checkout.com. Today, I try to maintain an 8% people operation/employee ratio, which is double most companies out there. I have 16 people for 200 employees that are dedicated to making sure everything is working well, that people at Checkout.com are extremely happy and we’re getting the best out of them. Not many companies have that ratio.”
Another interesting Checkout.com fact is its employee makeup: out of the 200 employees, only five had payments experience. Instead, Checkout.com hired investment bankers, consultants, and people with a variety of different backgrounds and brought them into payments because Pousaz favored a “blank sheet” approach. “We never wanted someone who had come from a payments company who was going to do a copy and paste of what he had done previously,” Pousaz said. “The thought being if you are cutting and pasting, you are not innovating.”
If you go into a Checkout.com office, there are whiteboards everywhere. Whiteboarding sessions are extremely important. In whiteboarding rooms, there are no chairs, so everyone has to stand up. This promotes interaction and a way to get people engaged and trying to solve a problem. Pousaz personally spends a great deal of time cultivating the culture and mission of his company with employees.
Expansion to U.S.
For some companies, top-line growth is the most important indicator; it’s all about gross revenue. For Pousaz, what is important is to make money which is net revenue/gross profit. “We know the U.S. is probably the most competitive e-commerce market in the world and there is actually little money,” says Pousaz. “People are fighting for basis points. For that reason, I was never super keen about the U.S. I wanted to say we will help people go international, and we will not touch the domestic market, especially the U.S. because it’s a lot of investment, a lot of branding, for ultimately something that makes little money. While in Europe, I have better margins and there are better margins elsewhere in the world.” Pousaz explains, “When you are on a like for like basis, when you process a currency and get settled on the same currency, usually the product is more commoditized. As soon as there are foreign exchange payments and complex, cross-border payment challenges to solve, there is more money. It is as simple as that.”
However, due to increasing U.S. customer demand for a global payment solutions provider that can support fast-growing retailers and Checkout.com’s commitment to meeting the needs of high-tech and mobile businesses, Checkout.com expanded to the U.S. in October 2017 with its first office in Boston and the opening of a second office in San Francisco in March 2018. Heading up Checkout.com’s continued growth in North America is ex-Adyen North American President, Peter Caparso, who is growing both U.S. headcount and Checkout.com’s customer portfolio. “When we go to U.S. merchants, we tell them we can help them go international,” Pousaz says. “We have that in our DNA. I have been doing this for more than a decade, and with Checkout.com since Nov. 2009.”
When asked about his ability to push through tough times, Pousaz offered these thoughts:
“I have a propension to be an optimist; taking bad news with a smile. You need to believe in your ideas despite people saying it is impossible. Don’t take no for an answer. What is important is to keep going in the right direction. Entrepreneurs have to deal with issues. As a startup, there are growth issues, issues on the technology side, all sorts of obstacles throughout the year, but because the team is united we work together and have really created a bond. As an entrepreneur, everything is about your ability to keep moving in the right direction. The more we grow, the more ambitious we get. Everything is at the expense of something else, so your ability to prioritize, and focus on getting the best deal and the best ROI is extremely important. Work together and not in silos. A good company is not a democracy. You listen to everyone, but you draw a strong hand to make the right decisions for your business so you can justify the decisions if needed. That’s the rationale of how I run my business. Lastly, and always, stay humble.”
Free Time for Checkout.com’s CEO
Pousaz travels 300 days a year for Checkout.com, in distance the equivalent of 10 times around the world per year, so when he is not working he looks forward to just being home in the UAE with his wife and 2 children, enjoying barbeques and family time. Staying active is important too. Pousaz is a competitive runner who runs every day, logging about 200 miles a month. He also likes to ski, sail, swim, and compete in triathalons. His love of surfing, which began when he was 15 years old vacationing in Indonesia, was reignited on his 30th birthday when his wife booked a holiday and gave him a longboard. “I try to focus on what’s important and appreciate what I have” says Pousaz.
Bright Future for Checkout.com
Checkout.com is a leading international provider of online payment solutions, built on 100% proprietary technology that handles every part of the payment process and provides complete transparency across entire payment value chain. With 200 employees and eight offices around the world in Europe, Asia, the Middle East and the U.S., Checkout.com currently processes 150+ currencies and includes customers like Samsung, TransferWise, Hopper, Virgin and Adidas. Checkout.com has become the first PSP to accept payments via Mada, Saudi Arabia’s domestic payment network. This move signifies another key milestone in Checkout.com’s service to businesses in the Middle East as e-commerce continues to flourish. Checkout.com aims to more than double its headcount in the next year and continue to grow its presence across the world. For more information, visit https://www.checkout.com