Nium's Yael Klein talks:
• Removing the "potholes" from fragmented payments
• Expansion into the US and eventually Brazil
• Stablecoins as an instant payment solution
Cross-border payments platform Nium recently expanded its domestic and issuance capabilities into the US, enabling clients—which includes travel management companies and other travel businesses—to issue local cards from its integrated platform. Nium SVP of B-to-B business payments Yael Klein, who has had a long career working with the corporate travel industry, including executive roles with AirPlus and American Express Global Business Travel, recently spoke with BTN executive editor Michael B. Baker about the expansion, Nium's product roadmap and what to watch with AI and cryptocurrency in payments. An edited transcript follows.
BTN: How does Nium fit into the corporate travel landscape?
Yael Klein: Nium does money movement globally. Whenever anyone travels, when you're booking, you're moving money. I just went to Jakarta last week. I book with my travel agency, and I put in my card details, and my [travel management company] routes my card details right through to the airline. But then for my hotel, for example, they choose a billback solution. So, they take my card details, and then they issue a form of payment out to the hotel, so that when I check out, they can collect the invoice data, the tax data, et cetera. This is where Nium comes in.
Whenever it's not the corporate traveler routing the card straight through, the TMC, in this example, issues a card from our [platform] to then pay the hotel. [It was the same with] my ground transportation. I had a driver picking me up at the airport, and this driver didn't take cards. So, this was paid via payout by a bank transfer. This is basically what Nium does.
Whenever a corporate traveler or a consumer's card is not used all the way through, Nium does the second leg of the booking and pays either via virtual card or via a sort of transfer. This is where we have a very powerful infrastructure, because we don't use a banking network. On the contrary, banks use us. We are connected straight into the local banking network, so we can do local instant payouts, which don't cost as much as if you have an international transfer by your bank. If you ever have transferred an amount of money into another country, that's usually quite costly when you go to the bank. What we do is different, because we use local payouts, the way our infrastructure is built.
BTN: What does your expansion into the US for card issuance mean for your capabilities?
Klein: Travel is global, and it was essential—any travel manager will understand that—people want to have a global provider because you have the same thing in corporate travel. The landscape is patchy, right? As a travel manager, you'll probably have a couple of credit card providers and a couple of TMCs around the world to serve you holistically. Many of our customers have various banks and card providers helping them.
It's essential that we are able to offer one infrastructure for our global customers. The US was something that we were missing. We were able to service the US outside of the US, but to have a local and a domestic product, of course, is key for a global product. So, now we've added it, and now our infrastructure does enable global customers to work with us globally.
BTN: What's the next geography on your roadmap?
Klein: The next stop is [Latin America]. If you look at the global stats, Brazil is one of the largest travel markets in the world. It's key for us to have our foot in the market with a local product there as well eventually.
BTN: What else is on your product roadmap?
Klein: Our product is only good if it's invisible. We need to be quietly awesome in the background. Everything needs to be automated. We work with APIs. Our job is making everything more seamless and less complicated.
The payment work[CD1] , it's a little bit broken, right? We have all worked on the buyer's interface and in the back, but it's a patchwork, because you have this bank and that credit card provider. Nobody has ever really looked at how to make this more seamless. You've gotten used to the fact that you just have 12 different providers to service you globally. What we're doing more is to see how we can enable our customers to make sure that they no longer need 12 providers but can use us. That's what we're continuously investing into: making it easier to work with us, to give them more data, to give them more seamless API integration and to have a more and more global footprint. We do payouts in 190 markets, that's pretty impressive.
BTN: What areas in payment do you see ripe for innovation with AI?
Klein: A lot goes into automation and also fraud detection. Anything where there's a lot of data but also 5,000 Excel lists ... now goes via AI. We use AI across the company. We use it to see how our customers act and what their problems are. Any service request today is moved via AI to see.
I've been in the travel industry for 25 years, and what I've seen in the last five years is really helping to improve the customer experience in the background, to make it quietly awesome and have less hiccups. That's something that you don't really realize. You drive down a road, and you have lots of potholes, and you were annoyed, and all of a sudden the potholes are no longer there, and it takes you a very long time to realize that you no longer bump from pothole to pothole. This is what is essentially happening. We're slowly removing potholes out of the road. It just increases the customer experience dramatically.
BTN: We've seen some movement to spur real-world use of stablecoin payments. Is there any potential in travel there?
Klein: Stablecoin is just another rail. We have Visa, we have MasterCard, we have UATP, we have Diners and Discover. Stablecoin is another rail, but it's also another way of moving money quickly. Just imagine we have something like a debit card model. Customers keep money in our accounts, and then they issue payouts and virtual cards. Our customers are typically not very cash-rich. Travel is never cash-rich, right? Margins are very, very thin.
Using stablecoins is something like a global instant payment, which means they have a longer time of working capital. If you do it by a traditional way, they would send us money today to make sure that the money is in our account three days later for us to then pay other suppliers, who will get it like a day or two days or whatever days later. But with stablecoins, it's instant. And again, it helps with currency fluctuations, because stablecoin is stable.
BTN: I think there's still some reticence in the industry just because of the uncertainty around cryptocurrency.
Klein: [Stablecoin's] grown-up crypto. I used to work at a German bank, and German banks are not the most innovative, I would say, but even they looked into that. It is just a different way of doing it, and it's a fast way of paying and a secure way of paying.