Partner Spotlight: Sumsub

Our work with partners occasionally goes beyond the positioning of our product capabilities. Sumsub, a global verification platform, is an excellent case in point. They approached Volt with a simple question: could open banking payments help their clients better verify new users?

The answer, of course, is ‘yes’ – but that alone wouldn’t make for an interesting case study. So, to tell the story of a partnership featuring equal parts innovation and collaboration, we called on the help of Fernando Zornig and Thomas Taraniuk, Sumsub’s Senior Partnerships Manager and Head of Partnerships respectively. Let’s dive in.

Fernando, Thomas; could you start with an overview of who Sumsub are and what you do…

Fernando: “Sure thing. Sumsub is a global full-cycle verification business that facilitates faster, more secure access to digital services. Since our launch in 2015, our platform – which is designed to be efficient, compliant and borderless – has verified over a billion users. We now have 4,000+ clients across the e-commerce, trading, iGaming, crypto, transportation and fintech industries, so you can see why there was alignment with Volt.”

Absolutely. How and when did you start exploring a partnership with us?

Thomas: “We actually chose Volt long before our announcement in April. We select partners on the basis of whether their solutions will help our clients be compliant to the degree that we think is necessary. They have to excite us and demonstrate a commitment to innovation. It became apparent early on in our conversations that Volt’s open banking capabilities were something we could leverage. Now, a few months down the line, it’s clear we’ve created a unique offering not seen elsewhere in the market.”

Volt is powering Sumsub’s Penny Drop Verification flow. Can you explain the use case?

Fernando: “Sure. All payment transactions are processed by default through Sumsub’s Virtual Account on the Volt platform. To comply with PSD2 regulations, which prohibit holding funds longer than necessary for customer due diligence, this setup includes the Penny Drop Refund feature. Clients don’t need to take any technical steps, as the feature is built into the solution. This gives clients a stamp of approval on the legitimacy of the new user’s identity – in addition to their verification attendance.

“Penny Drop Verification can be used alongside other identity verification methods such as a Qualified Electronic Signature or photo ID, which helps our clients comply with AML and CTF regulations across Europe. We’re seeing this already with a top worldwide crypto exchange, which uses the flow to great effect across different continental markets.”

Why was it important for you to have this functionality?

Thomas: “From the get go, clients have been asking for a solution that helps them become PSD2 compliant. In Germany, where regulation falls under the remit of BaFin, Account Servicing Payment Service Providers (ASPSPs) can lean on Penny Drop Verification to help them comply. Neobanks, gaming operators, trading platforms – and, as Fernando has touched on, crypto exchanges – all need it because it allows them to compliantly scale across the board.”

How has adoption been to date, and do you see this increasing?

Thomas: “We’ve had encouraging uptake from clients, who are leveraging Penny Drop Verification to operate under the regulatory formats of Germany, France, Spain and Romania. This in turn allows them to push forward new product releases, allowing users to access their digital services. Uptake is so far fastest in regions that haven’t hitherto seen an innovative product such as this.”

Has open banking been a welcome regulatory shift in regards to Sumsub’s product ambitions?

Thomas: “The market for banks, neobanks and other regulated institutions onboarding users is extremely competitive. To succeed products have to be sticky. They must have higher converting tools for regulated onboarding methodologies. Traditional KYC, while useful and innovative in many ways, is cumbersome to some.

“New product releases, which allow users to verify through penny drop or micro transactions, can alleviate a lot of the stresses for individuals who don’t have at-hand access to documents, or would like to take other methodologies to onboarding and verifying themselves and their accounts.

“Now, there’s a plethora of onboarding tools to choose from, such as the eID scheme in Germany, video ident, KYC and penny drop – allowing users to choose a path most appropriate, and least cumbersome, to themselves. Our integration with Volt has provided the opportunity for individuals to choose a path that has less friction and is more innovative around their current needs.”

Fernando: “This partnership sets the base for innovation to happen in the onboarding journey. PSD2 happened a few years ago, and there are changes that will come with PSD3 – which will significantly improve processes and spark a new wave of innovation.

“Already having this base, and already offering this kind of onboarding flow; it’s game changing for us. Our partnership with Volt will only create more use cases and more ways of verifying somebody using open banking – technology that also helps strengthen security and take proactive measures against payment fraud. I expect we’ll see this advance further in the future.”

Does it play into wider payment trends you’re noticing?

Thomas: “It does indeed. Payment trends are often guided by a couple of factors: innovation and ease, and policy and regulation. Instant payment regulation in the EU has opened the door to onboarding users in untraditional, more streamlined ways. Being able to offer this across the pan-European area has been a gamechanger for us.”

What are you most excited about from the partnership going forward?

Thomas: “The market is very wide for an offering like Penny Drop Verification. We mentioned banks, neobanks, trading, iGaming, investment platforms – many merchants, if they’re regulated, will be able to use this across the European Union. What we’re most excited about for the future is adoption, conversion and better analytics for our partners.

“We’re not only making the world a safer place with this partnership, through our clients and partners; we’re also able to make the lives of their users easier and safer. That’s what we’re very excited about: verifying the world together by keeping up with regulations and user expectations. Because as we know, instant gratification is a thing. People want instant onboarding. Anyone who can provide this will win in this space.”

Interested in integrating open banking into your payments stack? Find out more about partnering with Volt.