Beginnings

It was 2014, and I had spent the previous two years working for a small payments company here in the UK.

The industry looked very different. Alongside the established providers, several technology-led payment companies that are now major global players were still relatively early in their growth. The Visa and Mastercard landscape looked very different too. This was before today’s tighter merchant-location requirements, when companies had greater scope to establish relationships with acquirers in other parts of the world. There were fewer identity, KYC and compliance tools, and underwriting and onboarding were generally less structured and technology-led.

The idea of a payment processor as we understand it today was also less established. Payment gateways and acquiring banks were often separate providers, leaving merchants to bring together different parts of the payment process themselves. The market felt far more fragmented.

Wallets and alternative payment methods were less widespread and supported across a narrower range of industries. Integration typically meant either a complex API or a hosted payment page. Many of these pages were cumbersome, visually limited and offered little customisation. The wider ecosystem of ecommerce platforms, shopping-cart providers and integration tools was also considerably smaller.

The industry was still maturing, and much of what now feels established was only beginning to take shape. For me, that sense of opportunity was part of its appeal.

For the first time in my career, I had found a space that genuinely excited me. I could see its potential and the extent to which payments touched people and businesses everywhere.

As my understanding developed, so did a newfound energy and confidence. I began to think about doing something larger than I had attempted before: starting a company focused on service, with its customers’ best interests at the heart of its decisions.

Those thoughts were quickly followed by some uncomfortable questions. I had no technology of my own and relatively little experience. Was starting a company a realistic idea?

Towards the end of 2014, I met Dr Tschangiz Scheybani, known as Dr Chan, the founder and CEO of Payreto. He showed me how Payreto could provide a managed service built around ACI’s payment technology, together with its own back-office support. This would allow me to concentrate on business development.

That was the spark from which Elorn grew. The company was formally incorporated in April 2015.

I would like to write more about those early years another day. There were difficult situations, and in a bootstrapped business the car came close to running out of petrol a few times. There were also remarkable experiences and lessons that remain with me today.

Elorn would not be here without the generosity of a few people and the support of many others around me. Some may not even realise how much they helped, whether through a piece of advice, an introduction or simply a friendly ear.

The next chapter

Five years later, Elorn looked very different. We had built a profitable book of business, customer retention was high and lifetime value was strong. I’ll return to the importance of those customer relationships later.

We were also offering payment services through regulated partners, supporting businesses that needed to make mass payments. Our cash position was healthier, we were retaining earnings and, in my mind, we had established a solid foundation for growth.

The question was: what next?

For Elorn, the logical progression was to become authorised. Authorisation would give us permission to provide regulated services ourselves. Having already provided payment services through regulated partners, it felt like the natural next step.

We began by exploring registration as a small payment institution.

Then Covid happened.

It was a surreal period which, even now, feels slightly dreamlike. Fortunately, the business weathered the pandemic and continued to grow. Despite the uncertainty about what life and business would look like afterwards, we were excited about returning to some normality and continuing our journey.

With a stronger financial position and the goal of offering e-money services, I decided to continue pursuing authorisation and apply to become an Electronic Money Institution.

For anyone unfamiliar with the application process, it is extensive. We had to demonstrate that the people running the business possessed the necessary skills and experience, and that Elorn had appropriate governance, systems and controls in place.

We also had to identify the many risks that a financial services firm faces and demonstrate how we would manage them. This included showing that the business could continue operating through disruption and, if necessary, wind down in a way that minimised harm to its customers.

Considerable emphasis was placed on safeguarding customer money, keeping it separate from the company’s own funds, and establishing robust measures to tackle financial crime and fraud.

We also had to demonstrate that we truly knew our customers: who they were, where they resided and whether they had undergone appropriate identification, screening and KYC checks. Where a customer presented a higher risk, further due diligence could include obtaining evidence to establish their source of wealth or source of funds.

During this period, Consumer Duty was also raising expectations across financial services. It required firms to look beyond procedural box-ticking and demonstrate that they were putting customers’ needs first and delivering good outcomes.

It took us around 18 months to prepare the application. We brought talented and experienced people into the business, strengthening both the company and our submission. It was an exciting period, and we felt quietly confident that we had put forward a strong application.

C’est la vie

It’s February 2024. I have a short trip to Paris planned with my partner, Claire, when we learn that Elorn is not going to be authorised.

It wasn’t our best trip.

Despite Claire’s efforts to lift my spirits, there is no denying that it was a crushing blow. I felt despondent and embarrassed, and for a while I questioned whether I had been right to pursue authorisation in the first place.

The team felt it too. We had invested a considerable amount of time, energy and belief in the application, and it took us a little while to absorb the decision and regain our momentum.

With the benefit of distance, I can see it differently. The periods in which I have grown most, and in which Elorn has become more focused and determined, have often followed difficult experiences. We do not dwell on the decision today, but it remains an important page in Elorn’s story. The process gave us experience and insight that would subsequently shape the direction of the business.

An unlikely companion

For nearly six years, I have been studying music composition. I began with piano lessons and performed at my first recital, playing Departure (Lullaby) by Max Richter. It was not long, however, before I felt drawn towards composition. Music has always intrigued me and has long been my go-to art form.

I remember recognising from a young age the effect music had on me and its ability to provoke feelings and emotions. Music is a language and, like any language, you first learn to read it: notes, bars and sections. You begin to understand the tonal system, the horizontal movement of melody and the vertical construction of harmony, as well as the relationships between the elements.

As I started writing and practising small musical ideas, almost like forming my first sentences, I developed enormous respect for composers. Creating an idea is one thing; developing it into a coherent piece with a beginning, a middle and an end is quite another. It needs form, shape and movement, while somehow maintaining the listener’s interest throughout.

One area I particularly enjoy is musical analysis. I have come to love studying pieces and trying to understand the devices and decisions behind them. I am especially interested in the relationship between the smallest motif and the larger dimensions of a piece, or even a series of pieces.

For me, the creative process has two parts: the initial creation of an idea and the work required to develop it. Development gives an idea structure, logic and form, connecting its smallest details to the larger whole. One cannot exist meaningfully without the other.

This musical journey has been a real source of support and has given me another creative outlet. As anyone who works with me will know, I often find it easier to explain things through musical ideas and analogies. The parallels between learning to compose and building Elorn have sometimes been uncanny, with each journey informing the other.

My musical development has also been helped by the support of a great teacher. I love the idea of the torch being passed from one person who loves music to another, helping them develop and grow.

Fertile ground

Once the dust had settled on our not being authorised, the team pulled together. We remained curious about what was happening around us and gave ourselves room to explore, while testing ideas against what we knew, what customers needed and what we could realistically build.

I have always tried to contribute to an environment in which people and ideas can grow. I believe that helped us during this period. We kicked the tyres on many ideas, but as our thinking began to settle, two started to stand out.

The first came from considering an uncomfortable question: why do so many new businesses fail?

A member of the team had come across a video in which venture capitalist Marc Andreessen discussed the “onion theory of risk”, an idea he credited to Benchmark Capital co-founder Andy Rachleff. The theory is that a start-up begins with layer upon layer of risk. As each layer is identified and removed, the business becomes stronger, reaches important milestones and builds momentum.

The idea resonated with us.

What if we could create a platform that helped entrepreneurs identify these risks and put appropriate measures in place? It could allow founders to spend less time worrying about what they might have missed and more time building their teams, developing their products and finding product-market fit.

This was also a period of rapid development in generative AI. ChatGPT had arrived, followed by increasingly capable models with improved reasoning. We became excited about the role this technology might play in making the idea possible.

We put considerable effort into the project, but turning such a broad idea into a clear and repeatable product proved difficult. We understood the problem and believed in its purpose, but we could not reduce the idea to something sufficiently focused that customers could readily understand and use.

It brought me back to what I had learnt through composition. We had created the initial idea, but developing it into something with structure, logic and a coherent relationship between its individual parts and larger purpose was much harder.

Recognising that was an important lesson. Not every worthwhile idea is ready to become a product and knowing when to stop is part of the development process too.

I still believe in supporting founders, particularly those who have taken unconventional paths or understand the value of confronting risk early. Although we did not take this particular idea forward, the experience taught us a great deal about defining problems, developing products and distinguishing an interesting concept from something people genuinely need.

The second idea would prove to be different. It did not begin as a concept looking for a problem. It grew from something we had already experienced and built ourselves.

The idea under our noses

Looking back, onboarding has always been important to me. It is often the first meaningful contact someone has with a company and sets the tone as they move from interested party to fully-fledged customer. First impressions count, and so does the feeling of being in safe hands throughout the application journey.

I sometimes think of the maître d’ in a restaurant. They welcome new and returning diners, help them understand what they need to know and remain a point of contact throughout their arrival. It is an easily overlooked role, but an important part of the experience.

When Elorn began providing payment gateway technology, applicants would often be considering several gateways with similar products and pricing. This placed considerable emphasis on providing the fastest and smoothest onboarding experience. We also saw how easily applications could fizzle out before the process was complete.

Our application for authorisation deepened that understanding. We learnt more about the regulatory expectations placed on firms, the importance of effective KYC, KYB and due diligence, and the challenge of balancing a compliant process with a good applicant experience.

Looking back through our early strategy documents, onboarding appears repeatedly. It was both a strategic theme for Elorn and an important factor in customers’ purchasing decisions.

As we examined what we had built for our own application, we realised that it had grown beyond being a feature within our wider payments platform. We had the beginnings of a standalone product.

This was our second idea, and it had been under our noses.

There was still considerable work to do. The technology had been created as part of our payments platform and needed to be developed into a product that could operate independently. But unlike some of the other ideas we had explored, this one came from a problem we understood and work we had already done.

We now call it Onboarding by Elorn. I am writing a separate article about what it does, who it is intended for and where we hope to take it. For now, I will simply say that recognising when an idea has real potential is a powerful feeling. Developing it gives the team and me a renewed sense of excitement about what comes next.

Going further together

As I bring this reflection to a close, there are two groups I have not yet properly spoken about: our customers and the team.

When Elorn turned ten, I experienced several conflicting feelings. There was pride and satisfaction, but also the thought that perhaps we could have moved faster or that I could have made better decisions.

The feeling I kept returning to, however, was appreciation for our customers. Many have shown remarkable loyalty and patience, and inspired us through their own tenacity and perseverance. Some have also acted as mentors and guides to me, whether or not they realised it.

Everything we have built has been funded by the revenue generated by our customers. I owe them an enormous thank you. I hope we can continue providing not only excellent service, but products that are genuinely useful and help their businesses grow and become more productive and profitable.

Then there is the team.

If you asked what I find most difficult, I would say working with other people. If you asked what gives me the greatest satisfaction and sense of purpose, I would also say working with other people. More specifically, it is being part of a team united by a shared purpose.

Some colleagues have since moved on. Today, our team has its core in London, with members around the world. Everyone I have worked with has taught me something, and part of what they have contributed remains within Elorn and me.

Eleven years ago, I thought I could do almost everything myself. Experience has taught me that I was wrong.

The contribution of a team is far greater than the sum of its individual parts. People working together can solve difficult problems and accomplish things that no individual can achieve alone. Having their support is extremely humbling.

I am excited and hopeful about Elorn’s future. I fully expect it to contain further highs and lows. But our experience, our commitment to customers and the systems we have built give us a stronger foundation from which to create products that are useful, considered and built to last.

Thank you to everyone who has been part of the journey so far.