Ingo Uytdehaage, Adyen | All-In Summit 2024

00:00:00.000 | This has been one of the hottest growing areas of financial services.

00:00:03.040 | Adyen is not just a normal payment provider.

00:00:06.760 | While payment usually is a very unsexy piece of our industry,

00:00:11.800 | you guys made it sexy.

00:00:13.040 | Growth on our platform has been very significant.

00:00:15.720 | We're investing for the future.

00:00:17.800 | If you work with newer technology, you get to better quality.

00:00:21.240 | We completely rebuilt the infrastructure that typically is run by banks.

00:00:25.840 | And by doing that, we come to much better conversion rates for our customers.

00:00:31.720 | Ladies and gentlemen, the Co-CEO of Adyen, Ingo Dar.

00:00:36.280 | Hi, good to see you.

00:00:41.680 | Let me give just a little brief overview for a second.

00:00:45.120 | So Ingo has been with Adyen since 2011.

00:00:48.720 | First as the CFO and now as Co-CEO since May of 2023.

00:00:53.400 | Adyen is based in the Netherlands, founded in 2006,

00:00:57.000 | and is one of the largest payment processors in the world today.

00:01:01.200 | In 2023, Adyen processed nearly a trillion euro in payment volume.

00:01:07.680 | They had net revenue of 1.6 billion euros and an EBITDA,

00:01:10.840 | Jesus Christ, EBITDA of 743 million euros, a 46% EBITDA margin.

00:01:16.320 | Incredible.

00:01:21.640 | It's a capitalist conference.

00:01:22.920 | We applaud for EBITDA margin.

00:01:25.840 | Can you just say it one more time slowly?

00:01:28.680 | EBITDA.

00:01:31.400 | The company reported a 24% year-on-year revenue growth in H124.

00:01:35.920 | They just expanded into India, which is really interesting.

00:01:38.240 | I want to talk to you about that.

00:01:39.960 | Your market cap is today, actually, I just checked, about 45 billion American dollars.

00:01:44.920 | So it's one of the most successful, not just European tech companies of all time,

00:01:48.040 | but frankly, tech companies of all time.

00:01:50.160 | So welcome, Ingo.

00:01:51.160 | Thank you. Thank you for having me today.

00:01:56.440 | You're a former CFO.

00:01:58.280 | I'm going to put you on the spot.

00:02:01.280 | You're no longer the CFO, nor the co-CEO of Adyen.

00:02:04.320 | You're an analyst at an investment bank.

00:02:06.920 | And J-Cal, your managing director, says,

00:02:11.040 | "Put together a spread trade.

00:02:12.920 | You can be long or short one of Adyen and Stripe."

00:02:18.000 | How do we construct the business case?

00:02:20.760 | That's a really good question.

00:02:21.880 | Just the parameters of how we construct the case.

00:02:25.000 | I would say, if you look at this industry,

00:02:29.120 | for ourselves and Stripe, there is a lot to win.

00:02:32.760 | Because I think we are the only two companies globally

00:02:36.400 | that are investing in technology, in financial technology.

00:02:41.080 | And if you look at where most of the business currently is,

00:02:44.600 | it is with the traditional players.

00:02:46.360 | It's the banks, it's incumbent players.

00:02:49.560 | So I would certainly go for long for both of us,

00:02:53.560 | because I believe that we, together,

00:02:55.760 | are going to change this industry.

00:02:57.880 | That's how I look at Adyen versus Stripe.

00:03:01.280 | We come from different angles,

00:03:03.600 | but what I really appreciate about them

00:03:05.760 | is the fact that they also innovate,

00:03:07.400 | and competition is good.

00:03:09.720 | We're a company of a lot of athletes.

00:03:11.720 | We like to compete, and competition is good.

00:03:14.920 | So when you do compete in the marketplace,

00:03:17.080 | are you competing then with Stripe,

00:03:18.400 | or are you competing more with incumbents

00:03:20.000 | where traditional players are looking for payments?

00:03:24.120 | - Yeah, I would say, of course,

00:03:25.440 | there are areas where we compete with Stripe.

00:03:28.000 | But if you see where we win most of our business,

00:03:30.120 | it's with the traditional businesses.

00:03:31.800 | So indeed, the incumbents, the banks,

00:03:34.000 | that's where volume comes from.

00:03:35.560 | - And what do they find?

00:03:37.800 | They find both the cost is too high,

00:03:39.520 | and then they find the technology's too brittle

00:03:41.040 | for what you need to do today.

00:03:42.360 | - Exactly, I think if you look at this industry,

00:03:45.200 | banks, incumbents haven't invested for ages.

00:03:49.360 | We build everything from the ground up,

00:03:51.080 | so we have a single platform globally.

00:03:53.320 | And what we can do is we can basically

00:03:56.880 | lower total cost of payments,

00:03:58.640 | and increase the authorization rates.

00:04:00.840 | And that combination is very powerful.

00:04:03.080 | And the reason why we can do that

00:04:04.400 | is because we have lots of data in a single platform.

00:04:07.480 | - Now, at the end of the day,

00:04:08.320 | you guys still sit on top of these fundamental rails, right?

00:04:11.960 | Meaning, is there a way where we are in a world

00:04:15.280 | where the traditional payment infrastructure,

00:04:18.360 | and then the traditional credit card rails,

00:04:20.720 | is there a world soon where all of that disappears,

00:04:23.720 | or is there enough?

00:04:26.680 | - Specifically, the networks like Swift,

00:04:28.840 | the banks themselves, what role do they--

00:04:30.880 | - Why do these people still exist?

00:04:33.080 | - Well, it's a good question.

00:04:33.920 | I think, indeed, what we try to replace

00:04:36.800 | is the fundamental infrastructure.

00:04:39.160 | So in the US, we have our own access to the Fed.

00:04:43.000 | We have a banking license in the US.

00:04:45.680 | So we don't need commercial banks to be successful.

00:04:48.800 | And I think that's very crucial in our development.

00:04:51.320 | If you take long-term, also on the platform side,

00:04:54.480 | a lot of small businesses, they struggle to work with banks.

00:04:57.720 | And a lot of the software service providers,

00:05:01.000 | they, of course, build banking as a service.

00:05:02.960 | And there are only a few companies globally

00:05:05.320 | that can offer this.

00:05:06.920 | We want to be that player, that partner

00:05:09.560 | for these type of companies

00:05:11.040 | to help them sell financial products.

00:05:14.440 | So that's also why we have expanded from payments

00:05:18.200 | to broader financial technology.

00:05:20.200 | - Do you, have you ever had a conversation internally

00:05:22.800 | which said something along the following lines?

00:05:25.000 | Ah, 46% EBITDA, that's a lot.

00:05:27.280 | We don't need that.

00:05:28.280 | How much of that 743 million would grow the business

00:05:32.840 | if we just took it to zero?

00:05:34.600 | Told our investors for the next few years,

00:05:36.520 | like, could I grow twice as fast?

00:05:38.960 | Is that better in the long run?

00:05:40.440 | How, why, why be this profitable, I guess, maybe?

00:05:44.360 | - Yeah, I think profit is for me the same as value.

00:05:47.000 | So if we deliver value and also have premium pricing,

00:05:51.200 | merchants are willing to pay a premium

00:05:53.240 | and pay basically for the value that we bring.

00:05:57.000 | And I would be afraid

00:05:58.040 | that if we would just go for the lowest price,

00:05:59.760 | because I think we potentially could.

00:06:02.200 | We run at the lowest cost as an infrastructure.

00:06:05.080 | You would basically destroy a lot of value

00:06:08.520 | that's in, still in there.

00:06:10.880 | And I'm not sure if you would just go for price

00:06:15.400 | that you have the right conversations

00:06:17.760 | about the value that you bring.

00:06:18.880 | So that's the reason why we haven't done that so far.

00:06:22.400 | But it's of course a question

00:06:23.600 | that you should always ask yourself,

00:06:24.880 | like, can you invest more in the business

00:06:27.480 | to accelerate growth?

00:06:28.480 | And that's still the trade-off that we're making every day.

00:06:30.720 | Our main focus is on revenue growth.

00:06:33.040 | If we can invest, if we see an opportunity, we will,

00:06:35.680 | but we have a long-term view there.

00:06:37.360 | - What's it like building a company

00:06:38.720 | based in the Netherlands?

00:06:39.680 | What is it like hiring people?

00:06:41.560 | Where do you hire people?

00:06:43.120 | Do you make them come to the office?

00:06:45.520 | How does the culture change?

00:06:47.360 | - Yeah, so building a company in the Netherlands

00:06:49.320 | or starting in the Netherlands, at least,

00:06:50.920 | at least makes you aware

00:06:53.200 | that you need to go international from day one.

00:06:56.640 | Like, the Netherlands is a super small country.

00:06:59.680 | You can never build a very successful business

00:07:01.840 | just based on population there.

00:07:03.960 | So we immediately went international,

00:07:06.600 | but in the beginning, we hired mostly into Amsterdam.

00:07:10.760 | So we had a very strongly focused Amsterdam operation,

00:07:13.400 | and that shifted like 10 years ago.

00:07:15.960 | So 10 years ago, we went to the US,

00:07:19.080 | we started to build our team here.

00:07:21.160 | There's a very significant base here now in the US.

00:07:23.440 | We have more than 800 people working in the US.

00:07:27.280 | So it's our largest market outside of Europe.

00:07:31.000 | Growing fast, it's already 1/3 of our total revenues, the US.

00:07:35.760 | And I find that very interesting to see also

00:07:39.160 | how that has changed our company.

00:07:40.600 | We have a different perspective

00:07:42.360 | on how we should serve merchants.

00:07:45.000 | I think not being local in the beginning

00:07:47.640 | did not help to solve the real problem.

00:07:49.280 | So you need to have product and engineering

00:07:51.560 | very close to where customers are.

00:07:53.560 | And I think when we made that shift,

00:07:56.200 | we got more traction.

00:07:57.240 | And with the current setup,

00:07:58.840 | with like over 1/3 of our revenues already in the US,

00:08:02.840 | we see that we win a lot of domestic brands.

00:08:06.680 | And I think we're also proving

00:08:08.200 | that payments is not a commodity because--

00:08:10.680 | - Do you find it, is there differences in employee issues,

00:08:15.280 | employee quality between America and Europe?

00:08:17.800 | - I think there are very talented people in both markets.

00:08:21.800 | I think the, honestly, the technology market, of course,

00:08:25.160 | in the US is way more competitive than in Europe.

00:08:27.880 | I think we benefit from the fact that in Europe,

00:08:30.520 | we are one of the few companies.

00:08:33.400 | - Top dog.

00:08:34.400 | - Yeah, it's relatively easy.

00:08:36.120 | Our brand awareness in Europe is higher than in the US.

00:08:39.800 | That's one of the things that we're working on right now

00:08:41.600 | to make sure that more people get to know us.

00:08:44.360 | In the end, we're a business-to-business brand,

00:08:46.360 | so that requires additional push to show what we do,

00:08:51.200 | but we work for the largest companies globally,

00:08:53.880 | whether that's online, we work for Google, Meta,

00:08:56.720 | Microsoft, for retail, H&M, Nike, Gap.

00:09:00.280 | So we work for the best brands,

00:09:03.040 | and by also having them as referral customers,

00:09:06.120 | it is better to get into a country like the US.

00:09:10.720 | - If we were sitting here--

00:09:12.000 | - Sorry, some of the challenges with being based in Europe,

00:09:14.840 | maybe not on the commercial side,

00:09:16.000 | but just on the shareholder side.

00:09:18.000 | American investors, kind of public investors,

00:09:21.200 | private investors are mostly investing,

00:09:23.600 | mostly in private American and public American companies.

00:09:26.720 | Is it hard to attract a shareholder base?

00:09:28.960 | Does that affect the valuation?

00:09:30.840 | Because it's challenging to do so,

00:09:32.240 | and if you look at the valuation difference

00:09:33.800 | in the private market for Stripe

00:09:35.080 | versus your public valuation, there's a gap,

00:09:38.320 | there's a difference in the multiples, your metrics.

00:09:40.920 | - It's a 2x gap on numbers that look very similar.

00:09:43.400 | - And your numbers are similar,

00:09:44.760 | some of your metrics are much better.

00:09:46.680 | Maybe, I don't know if you wanna explain

00:09:48.320 | the valuation gap difference,

00:09:49.480 | or maybe just talk about the challenges

00:09:50.760 | of building a shareholder base

00:09:51.720 | and shareholder interest as a European company.

00:09:53.720 | - Yeah, that's a good question.

00:09:54.560 | Like when we, our biggest private round was in 2014,

00:09:58.000 | and then we realized that we want

00:10:00.240 | to have global investor base.

00:10:01.760 | That's when Iconic, General Atlantic,

00:10:04.000 | but also Temasek from Singapore came on board.

00:10:06.480 | They're still, they have been very supportive

00:10:08.960 | in the years up till the listing, we listed in 2018.

00:10:12.120 | And when I worked on the listing,

00:10:14.440 | we were quite convinced that we would list in the US,

00:10:17.280 | given the fact that most of the technology stock list here.

00:10:20.720 | But when we looked at valuation,

00:10:22.360 | and also index inclusion, et cetera,

00:10:24.640 | we realized that listing in Europe

00:10:26.680 | was as easy as the US, or even easier.

00:10:30.000 | And that from a valuation perspective,

00:10:32.080 | also if we benchmarked it to other IPOs at that time,

00:10:35.440 | that we even got a premium for listing in Europe,

00:10:37.920 | because we have a fully US,

00:10:40.600 | almost like 60, 65% at the listing, US investor base,

00:10:45.120 | so it was almost like a US IPO.

00:10:47.080 | And we got a premium for being a SCARE tech stock in Europe.

00:10:52.960 | And I think that combination worked really well for us.

00:10:56.000 | There is a difference, I think,

00:10:56.960 | between public and private markets.

00:11:00.080 | And I think that explains for me a bit

00:11:02.280 | the difference in valuation.

00:11:03.800 | - You mean that'll get rationalized over time?

00:11:05.840 | - I think so, ultimately, if--

00:11:07.880 | - The spread trade?

00:11:08.720 | - If we're both public,

00:11:10.760 | you're gonna compare the same numbers,

00:11:12.280 | and it's a combination of growth rate and profitability.

00:11:14.440 | - Would you ever do a deal lifting?

00:11:15.280 | Would you lift in the US as well?

00:11:17.600 | - If I would list in the US?

00:11:19.760 | If there would be no liquidity in Europe,

00:11:21.360 | I would list in the US,

00:11:22.760 | but there is sufficient liquidity in Europe.

00:11:24.280 | So you need to have certain size, but we have the size.

00:11:27.280 | There is liquidity, so it's not needed.

00:11:29.720 | - Yeah, these valuations will merge at some point

00:11:33.240 | when the people who are betting on promise

00:11:35.680 | versus performance,

00:11:37.440 | the public market is performance,

00:11:39.200 | and the private market is promise.

00:11:40.800 | - These EBITDA margins are bananas.

00:11:42.480 | - Yeah, it's fantastic.

00:11:43.400 | So if we were sitting here 10 years ago,

00:11:45.440 | this entire conference would be centered around crypto

00:11:50.440 | and this amazing impact

00:11:52.280 | and how your business would absolutely be destroyed

00:11:54.400 | by crypto, and there would be no need for banks

00:11:56.840 | or for countries or for nation states,

00:11:59.200 | and everything was gonna be on blockchain.

00:12:01.320 | Yeah, it was just everything was gonna be solved

00:12:02.880 | by blockchain, and everything goes away.

00:12:05.560 | And obviously, none of that has happened,

00:12:07.880 | but one thing that has happened that's really promising

00:12:11.600 | or interesting is stable coins.

00:12:13.520 | You have Circle in the United States doing really well,

00:12:16.200 | going public.

00:12:17.520 | I believe they're still on track to do that.

00:12:19.560 | Then you have Tether,

00:12:20.800 | obviously banned in a bunch of countries,

00:12:22.240 | bunch of problems,

00:12:23.400 | and being used for a lot of illegal activity.

00:12:27.160 | I'm curious what your thoughts are, though,

00:12:29.000 | on the concept of stable coins

00:12:32.320 | and their impact on the industry and the business,

00:12:36.680 | 'cause it does seem to be working,

00:12:38.160 | especially internationally.

00:12:39.440 | We don't see it here in the United States,

00:12:41.120 | but in other countries, Tether and Circle,

00:12:43.400 | these things are being used for lots of transactions,

00:12:46.200 | and people believe they'll ultimately be used

00:12:48.080 | for business transactions in a major way.

00:12:50.120 | What are your thoughts on stable coins?

00:12:52.040 | - Yeah, so I think the question is,

00:12:53.760 | are you looking at, indeed, domestic payment flows?

00:12:57.600 | And then, of course, I don't think that there is a high need

00:13:01.000 | for stable coins in well-developed markets,

00:13:03.280 | and ultimately, we are processing

00:13:05.120 | well-developed markets at the moment.

00:13:07.840 | If it's about, indeed, cross-border type of transactions,

00:13:10.760 | we still work with relatively old systems like SWIFT,

00:13:14.600 | with all their challenges.

00:13:15.920 | They try to innovate.

00:13:17.480 | That's the area where I would see

00:13:19.080 | there is a future for stable coins, indeed, if you need to.

00:13:22.440 | - Would you ever consider launching one?

00:13:24.720 | - No, I think we would consider working with stable coins.

00:13:27.160 | - So you might partner with a server or something.

00:13:28.000 | - Partner, exactly. - Yeah.

00:13:29.520 | - That's always been our model.

00:13:31.560 | We want to bring financial technology to our customers,

00:13:34.680 | but also working together with the partners that we have,

00:13:36.960 | because they are ultimately also making a lot of success,

00:13:40.520 | and that's where we want to help them.

00:13:43.040 | - Ingo, one of the things that we talk a lot about

00:13:45.760 | is censorship, but beyond idea censorship,

00:13:49.200 | there's an even more, probably, corrupting thing,

00:13:52.480 | which is financial censorship and deplatforming,

00:13:54.840 | and the way that I think it came on our radar

00:13:59.520 | was there was these truckers in Canada

00:14:01.400 | that were protesting COVID a few years ago,

00:14:03.280 | and they effectively got deplatformed

00:14:05.560 | from financial services.

00:14:08.680 | How do you balance that as a company

00:14:11.080 | that becomes this critical artery

00:14:13.360 | to send money back and forth and process money

00:14:15.880 | for millions and millions of people?

00:14:18.480 | - Yeah, I think one of the ways how we want to do this

00:14:21.520 | is work with a lot of platforms

00:14:24.560 | that basically have these truckers,

00:14:27.640 | as an example, as a customer,

00:14:29.640 | and I think the unique thing of these platforms,

00:14:32.440 | they have a lot of knowledge about these people,

00:14:35.040 | and I think combining that knowledge

00:14:36.920 | with providing financial technology is a very good outcome,

00:14:40.760 | because they have their knowledge about the industry,

00:14:43.360 | about the business data of these people,

00:14:47.240 | combined with what we know is needed

00:14:49.480 | in the financial industry,

00:14:50.680 | everything around money laundering prevention,

00:14:53.440 | terrorism financing, if you combine that,

00:14:55.760 | I think you have a very strong proposition,

00:14:58.240 | and I think that's the answer

00:14:59.680 | to the more traditional players,

00:15:01.400 | like the banks that also don't always have the knowledge

00:15:04.120 | to do this at scale.

00:15:05.800 | I think that's what we have been automating from the start,

00:15:08.600 | like everything around AML, machine learning,

00:15:11.840 | we've invested highly in that

00:15:13.640 | to build something very scalable,

00:15:16.280 | and that's what we want to offer to our companies.

00:15:18.480 | - Is it complicated being a European company

00:15:21.440 | more than an American company in that context

00:15:23.200 | where there's a lot of points of view that Europe has,

00:15:26.600 | and do they try to exert that pressure or not really?

00:15:29.240 | - No, I think we have really shifted

00:15:31.560 | from being a European company to a global company,

00:15:34.360 | and we need to comply with local regulations everywhere.

00:15:37.800 | We see ourselves as much as a U.S. company

00:15:40.120 | as a European company.

00:15:41.880 | If you look at the operations that we've built here,

00:15:44.600 | we want to make sure that we can compete

00:15:46.360 | with each and every competitor here in the U.S.

00:15:49.720 | on the same level, so it's needed

00:15:52.760 | that you comply with local--

00:15:55.080 | - Tell us, you're moving to India.

00:15:56.400 | I mean, not you personally, but the company.

00:15:58.680 | - No, yeah, so--

00:15:59.520 | - The exposure in India is incredibly dynamic, as you know.

00:16:02.320 | Lots of varying regulations

00:16:04.520 | that you also have probably dealt with.

00:16:05.800 | Tell us about the journey in India.

00:16:07.320 | - Yeah, it's a long journey.

00:16:08.760 | I think we started to work on this in 2018, 2019,

00:16:13.080 | and one of the most difficult things

00:16:15.040 | is all the data localization rules in India.

00:16:18.240 | So if you have a global platform,

00:16:20.280 | we have distributed database around the world,

00:16:23.320 | and then you realize that you can't store data

00:16:26.960 | of Indian people outside of India,

00:16:30.560 | so we had to really re-platform

00:16:32.600 | the data infrastructure that we have, but we did that.

00:16:35.440 | We have local data centers now in India.

00:16:37.160 | We got all the licenses,

00:16:39.200 | and we're one of the few international companies,

00:16:42.880 | maybe the only one right now,

00:16:44.640 | that can offer this to international companies

00:16:47.600 | that want to go domestic,

00:16:49.080 | or international companies that want to go cross-border.

00:16:52.200 | And of course, this is a relatively niche play in India.

00:16:57.200 | Today. - Today.

00:16:58.960 | - But it's a high need of our biggest customers.

00:17:00.920 | - I totally agree.

00:17:01.760 | - And that's what we've always focused on.

00:17:03.320 | We follow our customers.

00:17:04.840 | If they want to go into a new country,

00:17:06.640 | we make sure that we're ready for it.

00:17:07.960 | And this is a long-term investment,

00:17:09.240 | so this is already six years going on.

00:17:11.560 | - I mean, to me, India is like China circa 2005,

00:17:15.600 | so if you just closed your eyes

00:17:17.360 | and just bought the entire country index in 2005,

00:17:20.680 | you'd look back in 2000, even now,

00:17:23.000 | and you'd be way, way ahead.

00:17:24.520 | And I think India's on the verge

00:17:26.600 | of that multi-decade kind of renaissance

00:17:28.520 | with less regulatory risk on the back end.

00:17:30.720 | - Yeah, well, at least the regulatory rules

00:17:32.360 | are very clear from the start.

00:17:33.600 | - Exactly. - And I think

00:17:34.440 | that's what we appreciate.

00:17:35.440 | Like, ultimately, our company is a combination

00:17:38.040 | of technology, regulatory knowledge,

00:17:39.960 | and the right banking licenses.

00:17:41.840 | And if we play that out well,

00:17:43.600 | we are in such a unique position.

00:17:45.520 | - So everybody is, you know, blathering.

00:17:47.480 | Oh, sorry, go ahead, go ahead, Jason.

00:17:48.640 | - No, no, finish.

00:17:49.880 | - Everybody's talking about AI,

00:17:51.320 | and you have to have an AI answer,

00:17:52.640 | but what's the real on-the-ground experience

00:17:55.320 | of trying to build stuff with machine learning and AI?

00:18:00.320 | Is there anything in production that really matters?

00:18:04.200 | - Absolutely.

00:18:05.040 | - And how do you think about the future?

00:18:06.400 | - So one of the things,

00:18:07.240 | so there are, I think, two angles to this.

00:18:08.760 | The first one is how we optimize transaction routing.

00:18:13.760 | We just also launched a new way

00:18:17.560 | of US debit routing in the US,

00:18:21.800 | where AI helps us to make the best trade-off

00:18:25.480 | for merchants to lower the cost.

00:18:28.160 | So you get a 20% plus lower cost if you route that well.

00:18:33.160 | And at the same time, higher authorization rates.

00:18:34.680 | - So the router is intelligently figuring out

00:18:36.480 | these rails are cheaper in this moment process over here.

00:18:39.160 | - And it's, yeah, and it's, of course,

00:18:40.440 | a trade-off with the authorization rates.

00:18:42.320 | - Right.

00:18:43.160 | - And yeah, we work with eBay, Microsoft, et cetera,

00:18:47.080 | to launch this, and very good results.

00:18:51.080 | - And that's in production?

00:18:52.200 | - That's in production.

00:18:53.040 | That runs.

00:18:53.880 | - Wow.

00:18:54.720 | - The other part, the other angle is, of course,

00:18:56.120 | what we do internally for our support functions.

00:18:58.080 | That's more on Gen AI.

00:18:59.320 | We've always built a company around open source.

00:19:03.000 | Also here, we're open sourcing the models.

00:19:07.400 | But we have a lot of data, of course,

00:19:09.720 | internally that we can use for that.

00:19:11.920 | - Have you found enough motivation to displace

00:19:16.320 | or reason to displace the humans

00:19:17.980 | that do the equivalent work?

00:19:20.160 | Has that not happened yet?

00:19:21.440 | Or will it happen, do you think?

00:19:22.520 | Or does the business just grow and everybody stays?

00:19:24.200 | - It's just growing.

00:19:25.040 | And we've always had such a high focus on automation.

00:19:28.520 | If you ask where does the EBITDA margin come from,

00:19:31.280 | that's because we, if you look at our volumes

00:19:33.880 | and the number of people that we employ,

00:19:35.320 | it's a really low number, relatively.

00:19:37.680 | And we will continue to do that.

00:19:39.160 | So AI is gonna help us to further scale.

00:19:42.040 | And I don't think that we are--

00:19:44.880 | - Oh, come on, okay, Ingo, I have to push you.

00:19:47.040 | I mean, do you look at these American companies

00:19:48.720 | burning this kind of money to do a business

00:19:50.480 | that's smaller than yours?

00:19:51.600 | Do you scratch your head thinking,

00:19:53.960 | how did they, what is going on over there?

00:19:56.000 | Do you think that?

00:19:57.360 | - These are huge investments.

00:19:58.800 | And we are closely following it,

00:20:01.240 | like where can we benefit from it?

00:20:03.640 | But we're always a bit of a smart follower.

00:20:05.880 | I think that's always been our strategy.

00:20:08.320 | Like what can we use

00:20:09.240 | and what can we actually apply in production?

00:20:11.320 | We are so much focused on execution.

00:20:13.080 | I think that's also the only way to prove to,

00:20:16.040 | like we started the company with enterprise merchants.

00:20:18.000 | The only way to prove to the biggest merchants out there

00:20:20.880 | is to show that you can do it.

00:20:22.600 | And just talking about it,

00:20:23.880 | it's also not really European, just to talk about it.

00:20:26.600 | We are doers, we like to build things.

00:20:29.200 | And that's how we've created it.

00:20:31.560 | - Ingo, I'm wondering how you look at

00:20:34.640 | authoritarian countries, dictatorships, monarchies,

00:20:38.160 | whatever, and providing services inside of those.

00:20:41.800 | This has been a very polarizing issue.

00:20:43.760 | Obviously, some companies have chosen to not operate,

00:20:47.120 | for example, in China because of human rights issues

00:20:50.080 | and having to hand over dissidents

00:20:52.400 | in the case of a social network, let's say,

00:20:54.520 | where they're outright banned in them.

00:20:56.040 | And then you have this alliance starting,

00:20:58.360 | the BRICS has expanded and added a bunch of countries.

00:21:01.280 | And there's talk about, hey, maybe SWIFT,

00:21:03.560 | we're gonna get off of SWIFT

00:21:04.720 | and we're gonna create our own BRICS version of SWIFT.

00:21:08.520 | Are you operating in those countries?

00:21:10.160 | How do you think about that?

00:21:11.400 | And there's a lot of hand-wringing about,

00:21:13.800 | oh, we're gonna be off the US dollar and off of SWIFT.

00:21:17.680 | What are your thoughts on that entire space?

00:21:20.720 | Take it where you'd like.

00:21:22.720 | - So the way how we approach it is that we ultimately

00:21:26.560 | look at what are the markets that we want to be active in.

00:21:29.640 | China, as an example, I think the Chinese domestic market

00:21:32.520 | is a super difficult market to be active.

00:21:35.240 | But we have a huge team in China

00:21:36.880 | selling basically to Chinese merchants

00:21:39.040 | that want to go here in the US.

00:21:41.440 | And that's a very successful route.

00:21:43.280 | So we try to be pragmatic here.

00:21:45.920 | Ultimately, if we can comply with the local rules, we will.

00:21:51.360 | And it's a trade-off, like, can you do business somewhere?

00:21:55.040 | There are countries where we have chosen not to go so far,

00:21:59.720 | also because the demand is limited,

00:22:01.560 | but also maybe it's an unstable country.

00:22:03.560 | We do it on a country-by-country basis at the moment.

00:22:08.120 | - Now, what about this sort of anti-SWIFT movement,

00:22:10.320 | America has too much influence,

00:22:12.280 | the West has too much influence over the movement of money.

00:22:15.040 | They can do things like sanctions,

00:22:16.520 | as David's talked about on the podcast a couple of times.

00:22:19.920 | Is that real?

00:22:21.240 | - Yeah, is there really gonna be an alternative to SWIFT?

00:22:24.640 | - I think there is a likelihood

00:22:26.640 | there will be alternatives, yeah.

00:22:28.360 | And also, I think to your example on stable coins,

00:22:30.400 | like, that could be an alternative longer term,

00:22:32.040 | also if there are issues with SWIFT.

00:22:35.880 | - It just may not be a legislative alternative.

00:22:37.840 | It may be more technological, like yours or others.

00:22:40.320 | - Yeah, yeah, but I think there are companies

00:22:42.040 | that also try to solve this,

00:22:43.440 | like to have less dependence on SWIFT

00:22:45.600 | even in this Western world, yeah.

00:22:48.680 | - Do you guys run sentiment inside of all these payment flows

00:22:53.280 | or getting a sense of the economic health

00:22:55.940 | of certain countries?

00:22:56.840 | And has there been any thought to sort of sharing those

00:23:00.320 | so that, you know, like in America,

00:23:03.120 | we go through these things, Europe too.

00:23:05.480 | Unemployment rate comes out, you revise it.

00:23:09.240 | GDP numbers come out, you revise it.

00:23:10.800 | And nobody can actually act on these things

00:23:13.160 | until you're looking back six months,

00:23:14.680 | which is a ridiculous way to run an efficient.

00:23:17.440 | But I'm sure companies like yours, Stripe, Shopify,

00:23:20.640 | have you guys ever thought of working together

00:23:22.200 | to create a more dynamic view of economies?

00:23:24.920 | - It's certainly something that we wanna do with the data.

00:23:26.920 | I think currently what our challenge is

00:23:28.400 | that most of our growth comes from share of wallet wins.

00:23:32.680 | So it's very hard to separate this

00:23:36.520 | from the underlying growth.

00:23:39.440 | The moment we become a more stable company

00:23:41.000 | and that's years away,

00:23:42.520 | and then I think that's more possible.

00:23:44.120 | But it's like the data set that we sit on,

00:23:46.440 | like we have, I think over a billion unique shoppers

00:23:49.360 | in our platform.

00:23:50.200 | So it's-- - A billion humans.

00:23:51.760 | - Yeah, that's a-- - That's an incredible story.

00:23:54.960 | - Yeah, so there's certainly more to tell.

00:23:57.520 | And that's an absolutely interesting topic.

00:24:01.120 | - Do you ever see PayPal in the market?

00:24:03.840 | I'm just curious whatever happens to it.

00:24:05.440 | (audience laughing)

00:24:08.080 | - There's no delaying.

00:24:10.160 | - Well, PayPal is an important partner of us.

00:24:11.880 | So we work closely with them also offering,

00:24:15.240 | we just did a press release on their new Express checkout

00:24:17.960 | that we do together with them.

00:24:19.800 | So we see them more as a partner than a competitor.

00:24:22.440 | I think that's how we see them.

00:24:24.320 | - Last question.

00:24:27.120 | We've made a lot of fun of this whole thing this past week,

00:24:29.280 | founder mode, manager mode, whatever.

00:24:31.160 | But precisely for you, you work as a co-CEO.

00:24:36.640 | Which is a bit of a unique setup.

00:24:38.960 | But when it works, it can really work.

00:24:40.760 | And can you just describe to us

00:24:42.520 | how you guys have built such a great business

00:24:45.080 | and how you divide and share and conflict resolve?

00:24:47.880 | And what does it mean founder mode versus manager mode?

00:24:50.520 | - Yeah, so I think the way how we built a company together.

00:24:52.720 | So Peter is the founder.

00:24:54.360 | He focuses currently more on culture of the company.

00:24:57.480 | And is doing a lot of founder conferences,

00:25:00.880 | meeting our merchants.

00:25:02.440 | We all meet our merchants quite often.

00:25:04.720 | I see a couple of merchants on Thursday in San Francisco.

00:25:08.320 | And so that's an important part.

00:25:09.680 | I think that's how we do this.

00:25:11.440 | But it's a partnership already like for 13, 14 years.

00:25:16.440 | Like that's the time that I know Peter.

00:25:18.520 | So it's a very natural way of doing things.

00:25:20.560 | And we have both our strengths

00:25:22.040 | and we have both our weaknesses

00:25:23.280 | and we know it from each other.

00:25:24.560 | And I think that makes it a successful combination.

00:25:28.080 | - Thank you.

00:25:28.920 | Guys, please join me in thanking Ingo for joining us.

00:25:30.680 | - Thank you.

00:25:31.520 | (audience applauding)

00:25:33.120 | Thanks.

00:25:33.960 | I really appreciate it, thanks.

Ingo Uytdehaage, Adyen | All-In Summit 2024

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