Why hiring a full-time Head of Payment might be an expensive mistake

Being cost effective but still getting the top talent is a hard challenge for every company. While the obvious choice might be to hire a full-time employee, often these hires do not use their full potential within their 40 hour-week workload. I have seen employees getting extremely high salaries for a simple data entry or reconciliation work, only because 10% of the time the job required higher level skills. This not only demotivates employees, making them more likely to leave the company, but also leaves the operations ineffective and costly.

In these cases, the more efficient solution is to engage the services of a professional consultant and hire a lower-level employee full time, for the execution. Navigating this choice requires a nuanced understanding of the cost dynamics and the unique expertise and network which are demanded by the work.

Let’s take an example of a Head of Payments. This person is usually required to oversee the entire payment ecosystem, including banking, payment processing, financial technologies, and compliance with regulatory standards. The role typically holds responsibility for designing and implementing payment strategies, selecting, and managing payment service providers and bank, negotiating contracts, and keeping up to date of emerging technologies in the payment industry.

However, in a medium-sized company with only 4-5 banks and payment providers, handling a maximum of 1-2 million traffic per month, this job usually degrades to an executive role, which includes basic data entry, reconciliation, and administrative work, approximately 80% of the time. Planning and managing payments on a high level for such a company or any other small to medium-sized group usually takes no longer than 15-30 hours per month.

Although having a full-time employee means more focus on internal work, the companies with no external source of information on the quickly changing payment industry can easily miss out on a lot of important information. A banking or payment expert who is employed full time by one company on a long term has no exposure to the benchmarking processes and technologies used by the competition, the latest price information, industry news or standards or other valuable experience which are apparent for an experienced external consultant. Therefore, hiring a payment consultant and a full-time executive staff can lead to a more efficient and less costly setup.

This financial flexibility proves particularly beneficial when the need for specialized leadership is project-specific or when the demands of the payments landscape are subject to fluctuations. A key driver of cost-effectiveness is the elimination of long-term financial commitments. Unlike full-time executives, consultants operate on a project-specific basis. This pay-as-you-go model enables companies to allocate resources judiciously, paying for the expertise they need precisely when required. This adaptability is particularly advantageous for strategic projects within the payments sector, leading to a reduction in overall expenditure. Many consultants also get remunerated on a success basis, which means they do not occur extra costs for a company in case they fail to meet their KPIs.

External payment consultants usually have a wealth of experience and in-depth knowledge of the latest banking and payment networks, bring a vast network of providers and banks, knowing the limits and risk appetite, and other valuable internal information, which are vital in a competing environment. The payment industry is characterized by rapid technological advancements and sophisticated regulatory frameworks, where only experienced payment professional can navigate. Junior or semi-senior colleagues might be very costly when making inexperienced or unintentionally bad decisions leading to costly or fatal consequences, not only in terms of lost funds but also in the valuable banking or payment relationships of the business.

The flexibility inherent in engaging a payment consultant is further exemplified by scalability. As companies navigate the dynamic landscape of the payments sector, the ability to scale up or down becomes crucial. Payment consultants enable organizations to seamlessly adjust their resources in response to evolving project requirements. This scalability aligns with the fluid nature of the payments industry, ensuring optimal resource utilization and reinforcing the overall cost-effectiveness of this strategic approach.

Consider a scenario where a business is launching a new payment platform. The capability of conducting due diligence on new partners, evaluating changes or new setups, analysing challenges, and mitigating potential risks is priceless when managing the operational efficiency. Enlisting a payment consultant for the role of Head of Payments during the initial phase allows the company to harness specialized skills without committing to a long-term executive position. Once the project is successfully implemented, the company can disengage the consultant, maintaining financial prudence while achieving project goals.

Choosing a payment consultant as a Head of Payments offers a strategic and cost-effective approach for companies navigating the complexities of the payments industry. The ability to access specialized expertise on a project basis, coupled with financial flexibility and scalability, positions this choice as a wise strategy for companies seeking to navigate the dynamic landscape of payments efficiently.

How can PSP Angels help

PSP Angels Group is an independent payment consulting firm.

We understand the payment market and have a huge network of different banks and financial providers, so we can give?our?clients an accurate picture of all the different payment and banking options.

We know the payments market’s ever-changing risk appetite and licensing requirements, as well as what fees are currently offered. We help?our?clients make informative decisions about the possible options, prices and risks.

Within?our personalized payment consulting services, we set up an overall payment plan, help to move funds between countries, reduce real banking and payment risks, re-negotiate current fees to match the lower market rates, optimize tax and cash flow, and assist with the overall payment/banking setup.

Helping?our?clients to take their business globally, we explain what country uses which types of payment options and we also refer them to local payment providers for safer and cheaper banking and financial products. We have several partners who offer payment solutions, alternative payment methods, mobile payments, wallets, open banking, vouchers, crypto payments, chargeback and fraud tools, cashiers, and correspondent banks, based on individual circumstances and needs.

Our Cyprus?branch offers?various?fiduciary, accounting, taxation and audit services, where we assist companies not only during their operation, but also from incorporation, including company setup, licensing (office and personal setups, executive and non-executive directors, AML officers, lawyers, software providers, correspondent banks etc.)

Our Malta?branch offers?banking and payment consulting, aimed specifically for the iGaming and Gambling industry.

Via?our new Greek?branch, we now offer in mergers and acquisitions of financial licensed companies such as brokerages, crypto exchanges, banks, E-money institutions, small payment institutions, money service businesses insurance, and remittance companies, etc. globally

We also specialize in payment and financial evaluations on different projects to assist.

In 2023 PSP Angels won the Payment Consultants of the Year 2023 award by Acquisition International Magazine https://www.acquisition-international.com/winners/psp-angels-2/