CLOUD: HARDWARE-AS-A-SERVICE
Thethird-partypiece Nicola Griffiths, Account Manager for MYHSM, and John Cavebring, Founder & CEO of Hips, discuss the impact of Cloud-based managed services on compliance Regulation has been the catalyst for so much innovation in the fintech/paytech space; but the cost of compliance is also, potentially, one of the biggest barriers to market entry. Serial paytech entrepreneur John Cavebring recalls how, during product development for one of his early startups, there was no alternative but to invest in hardware security modules (HSMs), just to run the tests. “It’s extremely expensive hardware, too, and it was just lying around the office for years after that, not being used,” he says. By the time he came to found Hips Payment Group in 2016, an alternative option had become available: hardware- as-a-service (HaaS), delivered in the Cloud. As a Cloud-based provider itself, it made absolute sense for Hips to partner with an expert in such systems. “Our main goal at Hips is to make a platform available for any merchant or company that wants to go into the payments industry without breaking any rules, so they can focus on what they are good at,” says Cavebring. “Whether they are a mobile phone company, or a small merchant selling flowers, they do that best, paying a small fee for us to ensure everything around them is compliant.” www.fintechf.com
Equally, Cavebring says, if every business it’s servicing downstream is concentrating on the things it is good at, ‘Hips itself is not doing HSMs’. Instead, it looks to MYHSM ‘because it not only has all the hardware, but also the licences that come with it’. It’s an area of expertise that requires not only a dedicated team, but relentless monitoring and updating as the regulations change. MYHSM concentrates exclusively on providing payment hardware security models and related compliance, including
The Cloud is an essential platform for catalysing innovations in the fintech sector Nicola Griffiths, MYHSM
Payment Card Industry (PCI) certification that regulates critical functions, such as how a PIN is transferred and encrypted. And it’s all delivered via the Cloud. Nicola Griffiths, account manager for MYHSM, believes the technology is the key influencer in digital disruption. “The Cloud is an essential platform for catalysing innovations in the fintech sector,” she says.
“It allows fintechs to innovate without constraints; it can provide faster time to market; and it allows them to focus their valuable IT resources on developing applications that will ultimately differentiate their businesses and transform customer experience, without the burden of managing infrastructure and datacentres, and the associated costs.” The backdrop to MYHSM’s relationship with Hips and many others is an atomisation of financial services – myriad payment options offered by non-traditional providers, from the contactless payments vending machine where you grab a coffee at the airport, to the invisible Uber transaction you make on your short trip from the terminal to a meeting, and the QR code you scan to pay and play at the golf course after work. They all share the common need to be not only secure, but also trusted to be so by consumers. Arguably, many of these wouldn’t have been possible without innovative fin/ paytechs relying on Cloud-based, thirdparty solution providers to ensure the risk remains proportionate as they scale. “More and more companies are moving into fintech that aren’t typical players, because it’s so easy to do now with Cloud-based regulation-as-a-service and HaaS,” observes Cavebring. Issue 20 | TheFintechMagazine
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