Realex: Expanding into Mainland Europe

Colm Lyon is synonymous with digital enterprise in Ireland. Since he founded his online payments company Realex Payments in 2000, the company has grown from humble beginning to being a major player in the online payments space, processing billions of pounds annually for major corporations such as GlaxoSmithKline, Virgin Atlantic and Aer Lingus.

Along the way Colm has become a leading voice on entrepreneurship in Ireland, with Realex Payments often cited as the kind of export-led enterprise that Ireland needs more of on its road to recovery, and he was recognised with the Internet Hero Award at the Golden Spider Awards for his contribution to the Irish Internet Industry in 2009.

He started Realex Payments after leaving a career in the banking sector. The intention was always of setting up a payment gateway, not, he says, that “that there was a great plan in place, but certainly the idea.”

Realex has flourished as the online payments market has grown, and Colm notes that the, “adoption is huge now. The volumes that are going through are growing at incredible rates, and continuing to grow.”

“By about 2009 we were processing at about €6 billion a year for our customers, and I think at the moment we’re doing over a billion a month which means in the last two years we’ve doubled again, so it just shows the uptake. Obviously we’ve got more customers and more businesses in the meantime, but it’s still growing very fast and people are taking advantage more and more of the online opportunities, both sellers and buyers.

“It’s a good time. Obviously payment is a key component of that and what we’ve done is we’ve taken the payment process and we go to the retailer and we say “look, we’ll give you a solution that will enable you to not just to take payments on your website but really really it enables you to optimise the payment process online”, because we have fraud management and currency management tools, reporting and reconciliation tools that we put into the package as well.”

Realex’s expansion has seen them open a French office this week, a market Colm sees as the one that has been, “the most difficult market to get into”. He has just returned from an official launch in Paris which was attended by Tánaiste Eamon Gilmore, Enterprise Ireland CEO Frank Ryan and Irish Ambassador to France, Paul Kavanagh.

“We have offices in London; we’ve twelve people there; but what we’re doing in the UK, is we can process an English retailer, somebody like Virgin Atlantic who’s our client, and we can process them in through the UK banks for card authorisation no problem.

“In France it takes a long time to work with banks and build up relationships. We’ve had to work with the French banks over the last eighteen months to two years to get the agreement to go ahead to connect our system to theirs. This means that we’re able to now go to French retailers, and instead of them having to have their cards processed by the banks in the U.K. or Ireland, they can now actually have their credit cards processed by their local banks which is what we wanted to be able to offer them.”

Even as Realex Payments continues to grow, with talks ongoing with banks in Italy and Holland, Colm is working on a new venture which he hopes to see in beta by the third quarter of this year.

Carapay is what Colm believes will be the future of payments and he describes it as “effectively a merger of social networking and banking,” which will allow for person to person payments using mobile devices.

Carapay will differ from other services like Jack Dorsey’s Square in that it will not just be an application that transfers money between bank accounts, but more like a bank account itself.

“It’s not a front-end application or it’s not a wallet, it’s an actual bank account. A very, very cheap, almost free way of being able to make payments to and from each other.”

Although holders of a Carapay account will not be able to take out loans or overdrafts, they will have a payment account which is, “for all intents and purposes a current account,”says Colm. “What we’re going to be launching an alternative basically, to the current account.

“We’ll be bringing out what is basically a big, big, new concept in terms of saying to people ‘look we’ve got our own sort code, we’ve got our own bank identification code and all that now, so you’ll be able to come to Carapay and you’ll be able to open what is effectively a current account.

Carapay will include a feature called the Cara circle which will allow people to make real-time payments to and from each other through a trusted network that they create within the system. He admits this is “a big play.”

“We’ve got high hopes for Carapay in terms of both the person to person payments, and also then in terms of the business and the cheque replacement and cash replacement that we hope to offer people, basically a completely alternative way to pay, and it’s all real-time as well so if you’ve got a friend over in England and you wanted to send money to them you literally will be able to do so with your mobile phone in real time.”

As someone who is an entrepreneur himself, and who encourages entrepreneurship, Colm is heartened by what he sees as an Irish government that is “engaging with the business community”, citing the example of the Tánaiste’s trip to France to support Realex Payment’s French office launch.

“That sends a really, really good message to our partners in France. They’ll say, ‘well how did Realex Payments manage to get the deputy prime minister and the ambassador and the CEO of Enterprise Ireland to attend [their launch] at eight a.m. on a Wednesday morning?

“An awful lot of it just down to us as businesspeople to just get on with it. The government can only really create the environment whereby these things happen, and I think that’s what they’re doing.

“They’re doing the right thing, they’re working really hard on the pillars of inward investment and export-led growth; those two things are fundamental to recovery.

“It’s down to us as business people to make sure that we do grow our businesses and that we get customers outside of Ireland.”

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