Payments people is our interview series celebrating payments and product leaders. We discuss the experiences that have shaped them and tips for navigating a career in payments.
This week we’re chatting with Ognjen Vlačina, the Category Purchaser of Financial & Insurance Services for Group Procurement at the Ingka Group. The Ingka Group operates Ikea Retail, Ingka Centres and Ingka Investments.
In this interview Ognjen reflects on the role that curiosity played in his career development, the cross-border potential of open banking and why you should never be the smartest person in the room.
What led you to your role in Ingka/IKEA?
Ten years ago, I was working at a commercial bank in Serbia and thinking about where I wanted to be in the future. I wanted to explore the world of payments more. At the time PayPal had launched and there were all these new payment options on horizon. I took the first step and moved internally to the bank’s domestic payment operations with great support from my direct manager at the time, banking expert Snežana Blagojević.
Several years later, I applied for a regional job at Ingka and shouted with happiness in my car when I got the job. I felt ready to take on a new challenge. Later on, I discovered that over 100 people applied for that particular job. So I had a 1% chance of getting it. That was a sign.
It was a super challenging and interesting time. It started out as a regional role with three markets and grew to five full markets in southeast Europe. My colleagues and I were deploying payment solutions in the global market, seeing things grow but also seeing the market pains. What is good? What is bad? Are we fast? What are the different insights? It was everything in one.
How have you seen payments evolve over the last ten years?
When I started in traditional banking, it was very formal and a bit boring. I didn’t fit in. The payments space was dynamic, interesting. There was so much development on the horizon. Everything was happening everywhere. It was almost a bit chaotic with developments. And I really, really enjoyed it.
Even right now, we’re talking about the fintech industry, digital wallets, card acquiring, buy now pay later (BNPL), payment-as-a-service, neobanks, SEPA transfers. There are still a lot of cash payments, there's open banking, or for example QR payments in Asia. Depending on maturity and development, different things are converging in certain markets.
Some markets are moving a certain way because of the traditions or cultures or histories of that place. For example, China has almost skipped cards and entered straight into the next level of digital payments.
Or take cash. It’s not just a payment method but now a matter of personal freedom and data privacy. So now there’s also a philosophy that comes with a payment method.
Nobody knows how it will all end up. I wouldn’t say it’s a race, but it’s a kind of competition.
Do you think cash and digital payments can co-exist in the future?
Technologically, the world is ready for a cashless society. But as human beings, we’re not ready. Of course there will be abuse of a cashless system, for example fraud, different utilisations etc. So I don’t think it’s the right moment for a cashless society. Despite all progress, coexistence will last for some more time.
Tell us what it’s like working at IKEA/Ingka?
The Ingka system is big, great and challenging. I’m lucky to work with some incredible, beautiful people with huge amounts of expertise but who are also humble.
Across the world we’re looking at alternative payment methods and regional applications. We’re always looking for a seamless customer experience. When we talk about payments, we’re mostly talking about customers. We want to offer them the best payment options for their region.
What’s the most important habit or skill you’ve picked up to thrive in the payments world?
In order to stay relevant you need to be open and curious. Also, determined and fast. When you’re a small fintech, this can be easy to do. You have that flexibility, but maybe not so much power. You can change daily. But it’s much harder in a larger, more complex business.
We saw that with the rise of BNPL. They realised they couldn’t be a product by themselves so now they’ve attached themselves to other products — card acquiring, or something like open banking or even open finance. We're constantly thinking about where we are as a merchant in that flow, and monitoring how we can utilise this in favour of our customers.
How do you build things knowing that you may need to change at a moment’s notice?
Some days you’re really in the flow and other days you completely miss the target. But that’s the charm of the job. You're trying to stay relevant while maintaining a legacy and heritage as a retailer and then as a big company.
For example, where is the border between payments and customer finance? In the markets in my region, I can see clearly that card payments are predominant, but then they extend this card payment into 12 or 24 instalments. Now take this globally, answering this question in 32 markets with some local flavours. What challenges pop up? We’re always trying to make things work for the many, not the few. Of course, all of this is with limited resources to invest time, energy and new learnings.
Are there any books you’d recommend to people starting out in payments?
The book I'm reading now is The Field Guide to Global Payments by Sofia Goldberg. I wish I had read it five years ago. It's super simple. It goes over terms that we use every day; what’s a conversion rate, a CNP transaction, a chargeback? What's this hard decline? For somebody who is stepping into this area, this book is definitely valuable.
What’s the best piece of career advice you’ve ever received?
I’m not sure who said it to me, but the best general advice is that you should never be the smartest person in the room. If you are, get out of there. You need to be awake and open so that you can learn and progress. Technology is always changing and it’s changing fast. My principle is to always be learning.
What advice would you give to someone starting out today?
If there aren’t opportunities to get into payments immediately, a great way to find opportunities is to start at companies with a global presence, if possible. If you’re excited, open and driven, opportunities will come up. If your passion is driving you in a positive way, good things will happen in your career. You just have to follow your instincts. It’s easier said than done, but you can do it.
Payments are done right when…
You don’t feel it. When you don’t even have the sense that you’re paying for something. A customer is focused on the purchase, not the payment. The payment is just the enabler. That’s my theory, it’s a kind of payment magic
We’re operational experts here at Ingka. When everything works, you don’t hear a thing. But if you have issues with systemic interruptions, breakdowns, conversions, then everyone will show strong interest in how the payment system is doing.
The next time you barely notice a payment, that’s when you should pay attention.
What is your biggest prediction for the next five years?
I think we’ll have some consolidation in the industry. We have a lot of fintech startups competing with products like BNPL, local payment methods, neobanks, etc. I don’t think all of them will survive the next three to five years, but the ones who’ve entered customer finance or instalment payments could survive, together with those who can get their heads around different payment categories with speed and Gen Z acceptance,
The big technology companies are entering the payments area too. So perhaps we’ll have several big players alongside some small payment methods.
How about open banking?
Open banking is a super interesting topic. The question I always ask is this; there’s a clear benefit for the merchants, but what is the benefit for the customer?
At the current moment, there are maybe three clicks for open banking and one click for PayPal or Apple Pay. People are spoiled with too many options. So the key question for me in open banking is what is the game changer for the customers? Why should they use it over other payment methods?
The second thing I want to know is what’s happening around regional cooperation and using open banking for cross-border payments. It could be great for both the markets and open banking. But I don’t see people striving to get into this space. Maybe there’s not enough money in it, but on the other hand, that’s great because there isn’t a lot of competition. If open banking could solve cross border fees, which are very high, and regulatory challenges it would be a winning point for the business.
So for example, here in Serbia, we have instant payments IPS. It’s a great system but only works in our market. It also had legislation that helped move it forward. So if open banking could link together, say, four big countries around us that are not in the EU, that would be amazing. But it would need political will, not just a solid business case.
How far away are we from this truly seamless payment experience?
If I can reply in a song, I’d say it’s a neverending story. Jokes aside, it’s a moving target. Whatever picture you have today of your customers, their preferred payment methods, habits or behaviour, in 12 months it could be really different.
You want to be close to the latest payment trends but still independent enough to orchestrate your own payment abilities. Perhaps there is never a 100% fit with existing market needs, but it’s our job to be fresh and fast and always there for the many.
Want more insights from payment leaders in ecommerce? Read our Payments people interview with Mark Gerban.