0:00

So today I'm

0:00

with my friend and collaborator

0:03

investor Gary Staub. Gary has

0:03

had a 30 year career in banking

0:09

and E payments working at

0:09

companies like US Bank, Chase

0:14

Paymentech, Genpass Sterling

0:14

payment technologies amongst

0:19

others. Gary's working with us

0:19

here at Finexio. And we'll look

0:23

forward to chatting with Gary

0:23

and getting more about his

0:25

background and what's going on

0:25

in the world of payables and E

0:28

payments and payment processing

0:28

more broadly. So, Gary, great to

0:32

be with you.

0:34

It's great to be with you Ernest.

0:37

So Gary, I

0:37

mentioned you've had a long

0:41

career developing and launching

0:41

payments related businesses, why

0:46

don't you share with me and the

0:46

audience, your start story here

0:50

and some of the some of the

0:50

journeys you've been on over the

0:52

years.

0:52

I'd love to. So

0:52

after finishing business school,

0:57

Ernest, I had the opportunity to

0:57

start my career at Mellon bank

1:01

in Pittsburgh. And I was

1:01

fortunate that Mellon had a

1:05

vision to use their computer

1:05

power and investment in

1:10

technology to create fee income

1:10

businesses. So over a 12 year

1:14

span, I got exposed to

1:14

traditional banking products, as

1:18

well as cash management business

1:18

lines, and then really found my

1:22

passion with their network

1:22

services group that really

1:26

focused on the electronic

1:26

banking from the perspective of

1:30

ATMs debit and credit cards,

1:30

merchant acquiring, but that

1:34

created a great foundation for

1:34

me with a passion to really

1:37

further expand electronic

1:37

banking, I had the opportunity

1:41

to leave and start my own

1:41

company with a group of

1:43

executives backed by private

1:43

equity. And at that time,

1:47

private equity was just getting

1:47

started to look at and invest in

1:51

opportunities to get involved in

1:51

payments. So that foundation of

1:56

Mellon and then getting going on

1:56

my own led to really a career

2:00

path of either working with

2:00

larger banks or private equity,

2:04

to build some of the biggest

2:04

payment companies in the United

2:07

States. And that includes, like

2:07

you said, Chase, and what they

2:11

did with Paymentech US banks

2:11

investment in Elon and Elavon,

2:15

both domestically and

2:15

internationally. I worked with a

2:18

company called Mineros was the

2:18

you know, the largest

2:22

organization in Canada, and then

2:22

came full circle back to working

2:26

with some of the larger private

2:26

equity firms who had a passion

2:34

to want to get in. So a fun

2:34

career, but very much focused on

2:39

the latter part of electronic

2:39

banking.

2:41

How would you

2:41

say that the ways that payments

2:44

have really evolved over the

2:44

past 30 years or even the

2:48

payments industry? What are some

2:48

of the kind of touch points you

2:52

would kind of remark on around

2:52

the illusion because it's, it's

2:55

which now is like, going at the

2:55

speed of light, really, in terms

2:58

of rapid changes, but you've

2:58

seen so many,

3:00

When I look back, you know, thinking of your question there, the explosion of

3:02

electronic transactions, credit

3:09

cards, and then a version of you

3:09

know, purchasing cards and

3:13

commercial cards that came out

3:13

of that. Then debit cards,

3:17

whether it's pin or signature,

3:17

and the impact that it had in

3:21

the b2c world, you know, looking

3:21

back, I can remember being

3:25

involved in acquiring a couple

3:25

companies to be able to be a

3:28

leader in mail order processing,

3:28

not knowing that the internet

3:32

was going to evolve right away.

3:32

And then when it did, all of a

3:36

sudden, we became a leader in E

3:36

commerce and how e Commerce has

3:40

grown into be very much part of

3:40

consumers purchasing part, you

3:45

know, patterns today. And then

3:45

over the last 10 years, really

3:49

software integrations and the

3:49

ability to see companies build

3:54

solutions for vertical segments

3:54

and how that is really changed

3:57

with ISVs and VARs, taking over

3:57

a large chunk of payments. And

4:03

currently, it's really changing

4:03

even again, with FinTech

4:07

organizations, taking a role in

4:07

helping either banks or

4:10

competing with banks to bring

4:10

new solutions to the market. So

4:15

but very much payment

4:15

integrations and fintechs now I

4:18

think the tune that I think

4:18

you'll see more and more about

4:22

A few great

4:22

examples you know, you've been

4:22

those are involved in so many successful

4:24

and now to your point some of

4:28

the largest payments processing

4:28

businesses actually in the world

4:31

that you've had a hand in

4:31

growing developing starting what

4:35

is it that makes a successful

4:35

you know, what in the past would

4:38

be called a payments business

4:38

now it's it's fintech.

4:43

For any successful

4:43

company it starts with the

4:47

management team, and

4:47

understanding who's, you know,

4:51

at the top of the organization

4:51

and the team that he is

4:54

surrounded or she surrounded

4:54

themselves with the business

4:58

plan they've created and whether

4:58

They are focused on

5:02

accomplishing specific goals.

5:02

And do they have the

5:04

infrastructure in place? To do

5:04

that, you know, I often refer to

5:08

things as building blocks,

5:08

right? Don't have certain

5:11

building blocks in place, and

5:11

you can't scale. If you're

5:13

evaluating a payments company

5:13

today or a FinTech company, you

5:17

have to look also at their

5:17

partners and their technology.

5:21

And do they have the right

5:21

partners to complement scaling a

5:24

business and supporting it, and

5:24

then coming full circle, you

5:28

can't ignore how they handle and

5:28

support the clients from the

5:33

beginning of when they enroll

5:33

client or implement them into a

5:37

new solution to how they address

5:37

ongoing relationship management

5:41

and customer service? And how

5:41

that ties back into their KPIs.

5:45

And what they want a successful

5:45

payments company or FinTech, it

5:50

really does start at the top.

5:50

And do they have the right team?

5:53

And are they in an industry

5:53

segment, that there is

5:56

opportunities to grow some some

5:56

organizations shoot to small and

6:00

some shoot to big. If you know

6:00

what I mean by that.

6:02

Anything along

6:02

the way you've learned or you've

6:05

come across, it really stood

6:05

out, or was surprising to you,

6:09

or something perhaps you didn't

6:09

expect to see happening in the

6:12

space are a bit some of the

6:12

successful companies?

6:15

Well a couple

6:15

things. Currently, I'm kind of

6:17

surprised that the adoption of

6:17

digital or electronic banking

6:21

solutions hasn't gone faster. I

6:21

just think the business case

6:26

that can be made for a business

6:26

leader or CFO, it makes sense to

6:31

look at this because of the

6:31

improvements that they can make

6:34

to their bottom line in their

6:34

operations. I think some

6:37

fintechs lose sight of the

6:37

importance of you know, when

6:40

you're moving money for people,

6:40

you have to make sure you invest

6:44

in the solutions to do it right

6:44

the first time. It has to be

6:47

right and you have to take it

6:47

very serious. So you have to

6:50

invest in the infrastructure to

6:50

make it work. But I do think

6:53

it's going to even continue to

6:53

grow faster because of the

6:56

business case. Too much paper in

6:56

the world.

6:58

Sure, sure.

6:58

Still nearly 12 trillion of

7:02

checks in b2b payments. It's

7:02

just mind blowing. Now you've

7:05

worked with pure fintechs, you

7:05

were a senior executive

7:09

leadership at Sterling, which of

7:09

course was acquired by EVO

7:12

payments. You're an advisor here

7:12

at Finexio, investor, you've

7:16

worked at large banks, and it

7:16

didn't the tech divisions of

7:19

these banks are what became the

7:19

tech divisions of these banks

7:21

free payments. Is there a big

7:21

difference between how banks

7:25

approach payments you've seen

7:25

verse now software FinTech

7:29

companies approaching payments?

7:31

there is part of it

7:31

is the speed in which fintechs

7:36

can move versus all banks,

7:36

whether large or mid size and

7:41

the ability to innovate quicker.

7:41

You know, banks, because of

7:45

regulations and compliance,

7:45

often find themselves in silos,

7:49

and those silos put up walls

7:49

that prevent things from

7:52

occurring. And then service

7:52

levels, the ability to attract

7:56

talent, and fintech sometimes, I

7:56

think is easier than bank's

7:59

ability to do that. So

7:59

combination of speed, and

8:02

delivery, coupled with service

8:02

levels are part of the reasons

8:07

fintechs are being embraced by

8:07

banks. As you look to the

8:10

future.

8:10

Are there more

8:10

pain points or challenges using

8:13

bank products and services

8:13

versus FinTech solutions that

8:17

you've observed?

8:18

When you talk about

8:18

the the whole payment industry,

8:21

you have to look back at the

8:21

whole concept of a value chain.

8:26

And in today's world, in

8:26

payments, there's an off, you

8:30

capture that transaction, you

8:30

settle it in, you report it,

8:33

understanding the front end

8:33

systems in the back-end systems

8:37

there are a pain points

8:37

associated with both, and you

8:41

have to make sure that your

8:41

foundation is strong, and you

8:44

can address those. So when you

8:44

talk about pain points, you

8:47

really look to the value chain

8:47

of how a transaction is flowing,

8:51

where things could go awry.

8:51

Access to information and a

8:55

portal, and how portals have

8:55

evolved for people to run their

8:59

business, I think is a big focus

8:59

now as well, so that you can be

9:04

on the spot immediately to see

9:04

how a transaction is evolving

9:08

and corrected. So that those are

9:08

common pain points, I think.

9:10

Sounds like what

9:10

you're saying too, is that as

9:13

much as the back-end

9:13

infrastructure, the off to

9:16

settlement, you know, kind of

9:16

capture process. The front end

9:20

reporting, the stuff around

9:20

consumer customer experience has

9:25

been lacking. I guess maybe what

9:25

you're saying is that these

9:27

fintechs or software companies

9:27

can help banks deliver a better

9:32

customer experience.

9:33

Absolutely. You

9:33

summarized it well, let's just

9:36

take the b2c world and that's

9:36

going to be a microcosm of

9:40

what's current in b2b, where

9:40

omni channel has evolved where

9:44

brick and mortar and the

9:44

solutions that go into a

9:46

storefront are different than

9:46

what you need for processing an

9:51

E commerce transaction. And as

9:51

you know, the whole mobile world

9:55

is taken off and it continues to

9:55

grow and what you're on a phone

10:00

and how that transaction is

10:00

processed is different than the

10:03

systems that go into the retail

10:03

storefront, the ability to do

10:08

those things and do it well all

10:08

tie into, you know, delivering a

10:13

quality service. And that's

10:13

where banks and fintechs need to

10:17

work together, or banks can lean

10:17

on fintechs to help them deliver

10:22

a better product to their client base.

10:24

One of the

10:24

things I'd say a lot, and it

10:26

seems to really be resonating

10:26

with banks, because they're

10:29

investing in Finexio and

10:29

partnering with Finexio is that

10:32

these fintechs, we're not

10:32

actually looking to disrupt or

10:35

compete against these banks were

10:35

just another path of helping the

10:39

banks and get more distribution

10:39

with their products, but

10:43

providing a better overall

10:43

experience, I guess, for lack of

10:47

another word, easier ease of use

10:47

for the customers.

10:51

Banks who are

10:51

committed to supporting both b2c

10:55

or a b2b business segment need

10:55

to be thinking that way Ernest,

10:58

or they're going to be left

10:58

behind. The market is moving

11:01

that fast, they already to bring

11:01

solutions quickly to their

11:05

client base is what keeps the

11:05

client happy. You know, once you

11:08

have a happy client, you can

11:08

offer them other things, provide

11:11

a revenue stream back to your organization.

11:13

Can you help maybe the listener understand? Or do you agree? I mean, why is

11:15

it so hard? If I'm a bank, and

11:18

I'm trying to release or come

11:18

out with some new payment ideas

11:21

or products or services? Why is

11:21

it so hard to get that done

11:25

that's led to all this FinTech

11:25

explosiveness that's been

11:28

happening? Is there a way to

11:28

describe this in some succinct

11:31

way that's maybe easy to understand? Or do you have a couple of maybe, war stories

11:33

that you've observed over your

11:37

career on what the difficulties

11:37

are?

11:39

Part of it is the

11:39

fear of disruption in your

11:45

organization, if you have

11:45

something that's working, what

11:48

you would call a legacy system,

11:48

pulling that out and putting

11:51

something new and causes

11:51

trepidation for people in

11:54

general. And then there's your

11:54

worry, worry about the team. And

11:58

what's this going to mean to

11:58

your team? And am I going to

12:01

have to add more people? Or am I

12:01

going to lose people? And do I

12:05

have the time to train them on

12:05

systems that are going to help

12:09

them in the long run, and still

12:09

get my day to day job done?

12:12

Those are normal hesitancies

12:12

that exist when implementing new

12:18

solutions. Once they're

12:18

implemented, the whole

12:20

reconciliation process and how I

12:20

go about doing my day to day? Is

12:25

that going to change? And does

12:25

it tie into an ERP system that I

12:29

already have in place? And do I

12:29

have to integrate? And what

12:33

forms of integration does that

12:33

occur? And the whole idea of an

12:36

API and a robust API? Or can I

12:36

maybe do this without doing an

12:41

integration? These are the

12:41

things that I see all the time,

12:45

when I'm working with

12:45

organizations or consulting that

12:48

slow them down, and they get

12:48

lost in the forest if you will.

12:52

Absolutely.

12:52

Well, since you've touched on

12:54

it. Well, could you explain

12:54

perhaps how the software

12:57

integration into payments has

12:57

changed the way businesses pay

13:02

and get paid? And what are the

13:02

benefits? And then where do you

13:05

think it's headed. And I know

13:05

that I mean, you built the b2b

13:08

Sterling business off of the

13:08

backbone of the software

13:11

integration, partnerships and

13:11

model so you, you're considered

13:16

one of the experts in that

13:16

country in this area. So you've

13:18

As a relates to

13:18

options, maybe it's the best way

13:18

got a long history here, you

13:18

probably can talk to the history

13:21

as well as where it's going. to say it for today, replacing

13:21

cash and checks with more forms

13:25

of way to pay your

13:25

organization's or receive

13:28

payments is I think, the thing

13:28

that's most exciting, you know,

13:33

the idea of ACH exploding, and

13:33

then right behind that are

13:36

virtual cards, and then how

13:36

wires are conducted today, when

13:40

it makes sense based on the size

13:40

and looking across borders, all

13:45

those are really replacing

13:45

checks. And I think that's only

13:49

going to continue to grow,

13:49

because it provides, in some

13:53

cases, an operating return on

13:53

investment that lowers your

13:56

cost. And then when you're

13:56

introducing new products, like

14:00

you know what Finexio does, with

14:00

virtual cards, it creates a

14:04

revenue stream, but it's really

14:04

looking at from a whole business

14:09

line, can i improve how I work

14:09

with the most important

14:12

contingents of my organization,

14:12

which are my customers, and my

14:17

suppliers, you know, suppliers,

14:17

in turn, want to be acknowledged

14:21

for what they deliver in the

14:21

value chain and maybe get paid

14:25

faster. So that leads to new

14:25

products that I think will

14:29

evolve with digital

14:29

transactions, again, all around

14:32

the premise of replacing checks

14:32

and cash with a new way to pay

14:37

quicker, faster, and maybe more

14:37

efficient. Down the road. I see

14:41

b2c and b2b becoming more common

14:41

in the omni channel that I

14:44

It absolutely makes sense.

14:44

You're basically getting into

14:45

described earlier, where

14:45

businesses are using the

14:48

knowledge and the data that they

14:48

capture from electronics to

14:52

figure out how they do their

14:52

inventory management, price

14:56

their product, how they go and

14:56

deliver solutions and where they

15:00

want to go to deliver their

15:00

solutions and who the best

15:04

suppliers are, in turn,

15:04

negotiate better terms with

15:08

those suppliers. If that makes

15:08

sense to you.

15:15

what my old CEO Ajay Bonga would

15:15

say at MasterCard around how do

15:19

you add more value in every

15:19

single transaction and to be non

15:25

commoditized is really

15:25

leveraging the data around that

15:30

transaction and making the next

15:30

transaction be better, smarter,

15:34

faster, more profitable by I

15:34

don't know, predicting where and

15:38

how that next payment is going to go. I read not too long ago that

15:40

someone made an analogy that

15:43

data is the new oil that's going

15:43

to drive the future. And if you

15:48

think about it from the examples

15:48

that I just gave you, that makes

15:50

a lot of sense.

15:51

Absolutely.

15:51

Yeah. And that mirrors what

15:53

we're doing at Finexio, right?

15:53

If you think about we're taking

15:56

recurring supplier payment data,

15:56

due dates, actual payment,

16:02

dates, settlement dates, and

16:02

marrying that up with access to

16:05

capital and supply chain

16:05

financing to get smart offers to

16:10

suppliers. So identify that Hey,

16:10

Mr. You know, supplier over at

16:14

ACME Corp, we've noticed that

16:14

your last four months of

16:17

payments were delivered after

16:17

the due date, how would you like

16:21

to get your next payment within

16:21

10 days of invoice approval. And

16:26

now we set it charging 50 cents,

16:26

we can charge 2% of transaction.

16:31

But we're actually solving a

16:31

problem for the buyer and the

16:34

supplier suppliers are getting

16:34

their money faster, and the

16:36

buyer didn't have to manage

16:36

something where they're

16:38

obviously struggling to manage

16:38

it. And probably with a lot of

16:42

manual steps along the way that

16:42

are eliminated and the data is

16:45

the oil. And that in that

16:45

example, that grease is the

16:48

greases the gear, certainly.

16:50

But if you're running a business, the ability to have these systems in place,

16:51

leveraging the software that you

16:56

are investing in to run your

16:56

business more efficiently.

17:00

That's the way you need to be

17:00

thinking, yeah, look to the

17:02

future.

17:02

So now let's,

17:02

I'm the CFO, I'm the end user,

17:05

I'm the guy or gal that is at

17:05

these businesses trying to pay

17:09

or get paid. And maybe I work

17:09

with a bank, or maybe some

17:13

fintechs calling me but you

17:13

know, I've got this tech stack

17:17

already in place. Right? I've

17:17

got the ERP, maybe I have

17:21

accounts payable, I mean, what

17:21

would you say, you know, have

17:25

been some of the considerations

17:25

that they've been need to or

17:29

have been taking into account.

17:29

And if I'm, you know, if I'm

17:32

running a business and you've

17:32

run these businesses, what, what

17:35

do you need to think about in

17:35

terms of how to take advantage

17:37

of some of these new payment

17:37

things that are coming? And

17:41

maybe if we want to mention what

17:41

you've seen during COVID? If

17:44

that's relevant, I think that's

17:44

been a super accelerator for a

17:48

payable, certainly.

17:49

COVID has addressed

17:49

people not going into the

17:53

office. Yeah, looks like that's

17:53

maybe you're going to come back

17:56

and raise its ugly head.

17:58

Oh, I see what you're saying. You're saying you think that with more COVID

17:59

coming? You think it might--ah I

18:04

see. Okay, interesting view,

18:05

The whole pandemic

18:05

opened up another layer of how

18:09

do I run my business more

18:09

efficiently? What can I do to

18:12

streamline processes? Where are

18:12

there opportunities to re

18:16

engineer what I'm doing quickly,

18:16

to solve the fact that people

18:22

may not be in the office as

18:22

often or I need to redeploy

18:25

resources accordingly. But

18:25

again, looking back on the

18:30

approach that CFOs need to do

18:30

is, again starts with what is

18:35

the solution I'm trying to

18:35

implement? Does it impact my

18:38

current operations? And the ERP?

18:38

Can I move to implement some of

18:43

these without a formal

18:43

integration? Or do I need to do

18:46

an integration? Once I've gone

18:46

on that path? Is the partner

18:49

that I've picked, able to

18:49

deliver a training program

18:53

seamlessly? Am I going to be

18:53

able to have, you know, quicker

18:57

updates, and have access to

18:57

data? Or am I going to have to

19:01

re wire what I'm doing

19:01

currently? And then what's the

19:05

experience on the back end with

19:05

my client and my, my suppliers?

19:09

Are they going to be happier?

19:09

And all that is back into how

19:13

it's presented. And I know that

19:13

the presenting of a new solution

19:18

to a supplier can be scary.

19:18

Yeah. Particularly if you're

19:23

asking them to get paid a

19:23

different ways. So it has to be

19:26

well documented and presented in

19:26

a way that's well received. And

19:31

I think, again, just looking on

19:31

the b2b front, these are

19:34

opportunities for businesses to

19:34

improve immensely enhance their

19:40

operations with their suppliers.

19:40

If they do it the right way.

19:43

It can be a win

19:43

win. Right? I think in the old

19:47

day, the credit card world it

19:47

was that we screw over the other

19:52

guy and pass the savings to you.

19:52

Yeah, and now the whole world is

19:57

moved to digital first and multi

19:57

rail, where it's not about the

20:02

fee as much as the best fit,

20:02

solving the problem. And you

20:07

said it first is rate

20:07

streamlining and minimizing

20:10

integrations and manual work.

20:12

That's the future

20:12

Ernest. That's where it's going.

20:14

And it's going to go quickly,

20:14

then the people who don't

20:17

respond, whether it's the banks,

20:17

or the manufacturers and b2b or

20:21

the business service companies,

20:21

we're going to lose, you know,

20:24

the whole pandemic, going back

20:24

to what you said, was an eye

20:28

opener for a lot of people

20:28

because they weren't set up to

20:31

handle people not either coming

20:31

into their organization or how

20:34

they were going to receive their

20:34

products. And that's changed.

20:38

And that's going to tie in to,

20:38

really some of the crisis we

20:41

have now with supply chain, and

20:41

orders that are being done and

20:44

managing how you're going to run

20:44

your business. All gets back to

20:48

do I have the right systems in

20:48

place, and do I have the data to

20:52

make good business decisions?

20:53

Yeah, that's

20:53

right. That's right. Let's

20:55

switch gears a bit and talk more

20:55

on the, you know, funding and

20:59

investment side and talk about

20:59

what's happening in VC and

21:03

private equity investment in

21:03

FinTech. You're an expert,

21:07

obviously, in b2b payments. So

21:07

your views I think, are valuable

21:10

here. Let's start off, you know,

21:10

with Finexio. I mentioned

21:13

already, you're an investor,

21:13

you've been close close advisor

21:17

to me and the rest of the team

21:17

at Finexio given your track

21:21

record and building and scaling

21:21

selling b2b payment businesses.

21:25

What was the most compelling

21:25

reason for you to get involved

21:28

here?

21:29

When I think about

21:29

first time I met you and

21:32

discussions we had, it really

21:32

did trigger core belief that I

21:37

have that the b2b world is going

21:37

to grow at a much faster pace

21:42

than b2c and, you know, the love

21:42

of payments and the desire to do

21:46

more in payments. If I was going

21:46

to spend time in payments, I

21:49

wanted to do it in b2b, not b2c.

21:49

I just think the opportunity

21:54

based on looking at statistics

21:54

of what's occurring, you had

21:58

mentioned $12 trillion worth.

21:58

Yeah, I just think the

22:05

opportunity to do more faster

22:05

and b2b. Not to say that private

22:09

equity isn't still looking at

22:09

b2c. But, you know, over the

22:12

last four years, there have been

22:12

major transactions with Fiserv

22:19

and FTC, and WorldPay, and

22:19

Fidelity and all those, I think,

22:25

are still being digested.

22:25

Whereas those same organizations

22:28

aren't really as strong in the

22:28

b2b front, and eventually they

22:31

will be. So a combination of

22:31

looking at the industry and my

22:35

own personal experiences led me

22:35

to want to do more in b2b and,

22:40

you know, help Finexio accordingly.

22:42

But when it

22:42

comes to the investments, and

22:45

the differentiation around

22:45

Finexio, what can you share, and

22:50

I want to see if you touch on

22:50

something I know you tell people

22:53

a lot about and what you think

22:53

is really critical for success

22:57

in in b2b payments. But what are

22:57

some of the differentiators you

23:01

saw or what's making this special?

23:03

That whole idea of

23:03

just focusing on the last mile,

23:06

that has resonated well with me,

23:06

because you can then apply your

23:09

Can you describe

23:09

why it's hard to do what we're

23:10

own approach philosophy and

23:10

investments to make that last

23:14

mile even more efficient, to get

23:14

immediate results. So I think

23:19

that that's important. It's

23:19

repeatable processes that can be

23:23

scaled, and use technology to,

23:23

you know, bring on new clients

23:27

in an efficient manner. When I

23:27

look further at Finexio, the

23:31

whole channel strategy of

23:31

getting involved with software

23:35

companies and integrating with

23:35

them to create some stickiness,

23:39

and then having access to a much

23:39

bigger base of clients. It makes

23:43

sense, and it's a way to scale

23:43

business in electronic industry

23:47

quickly. And in turn, I'll go

23:47

back to service, you know,

23:51

service. From my perspective,

23:51

High Tech High touch revolves

23:55

around not only doing repeatable

23:55

processes right the first time,

24:00

but it's then what are you doing

24:00

to make it easier for the

24:04

clients, I know that the value

24:04

chain of Finexio has a lot of

24:08

investment in supplier

24:08

enablement, how you set people

24:11

up, how you make sure the data

24:11

you're collecting is secure, how

24:15

you're making sure that when you

24:15

do process a payment, whether

24:20

it's paper, or ACH or even

24:20

virtual cards, it's being done

24:24

in a way that can be accounted

24:24

for tracked. And then if there

24:28

is an issue can be easily

24:28

fingertip away on a portal for

24:32

people to see. Those things are

24:32

the reason service, I think

24:36

Finexio continues to get high

24:36

ratings, because it is a

24:39

combination of High Tech High touch.

24:44

doing here from what you've

24:44

seen? Or why are there not so

24:47

many other b2b payment things

24:47

out there that have addressed

24:52

this problem? Could you could

24:52

you share maybe why it's hard?

24:57

Funny that you have

24:57

asked that question, you know,

24:59

coming from In the b2c world,

24:59

and some of the integrations

25:02

that occurred with ISVs, and

25:02

vars, I remember Sterling was

25:07

competing heavily with a company

25:07

called Mercury. And what we had

25:12

was a combination of knowledge

25:12

about the transaction flow

25:16

coupled with people who got up

25:16

every day and lived it. And I

25:21

saw, I think the last RSPA, I

25:21

went to there were 20

25:26

organizations who were trying to

25:26

say, they did payments for

25:30

integrated solutions, and it was

25:30

all smoke and mirrors because

25:34

the

25:34

knowledge b: they didn't have

25:37

they

25:37

didn't set themselves up for

25:40

success. And that gets back to

25:40

things like supplier enablement,

25:44

coupled with an integrated

25:44

solution on service, starting

25:48

with how you implement that how

25:48

you track issues that occur on a

25:52

relationship management, to how

25:52

you solve problems, and what you

25:56

have in place in the way of

25:56

metrics to see are you doing it

26:00

right? And are you doing it

26:00

consistent, and your whole

26:02

dashboards and your whole

26:02

portals that you share

26:04

internally and externally, are

26:04

all built around that concept?

26:08

Companies just can't make that

26:08

overnight? Yeah. And that's why

26:13

I think Finexio will continue to

26:13

succeed, because they're very

26:16

focused on what they do well,

26:16

and they're trying to stay

26:19

within that and continue to add

26:19

buffers that prevent people from

26:24

doing it the same. Yeah, thought

26:24

as well. And when you talked

26:27

earlier about financing

26:27

products, I think that's a

26:30

second wave, you know, that's a

26:30

value add, that will be added.

26:33

But it's really the traditional

26:33

AP processing, that creates the

26:37

foundation from which you can

26:37

build upon. And there aren't

26:41

other people in the in the

26:41

sector that are doing it now, to

26:44

the way that I think it needs to

26:44

be done.

26:50

I mean, I think it goes to we've what we've really built here is a platform.

26:52

Yeah, right. It's a service and

26:56

infrastructure platform that is

26:56

not easily replicable.

27:01

If you're an

27:01

investor in the PE side, if

27:04

you're looking to get into b2b

27:04

payments, that whole idea of

27:08

finding a team that understands

27:08

the industry and what they're

27:12

doing, and a platform is unique.

27:12

And if you can do that, and then

27:16

they have some differentiators

27:16

based on value adds that they

27:20

build plus customer segments

27:20

that they understand and they're

27:23

going after. That's clearly a

27:23

formula for Win win.

27:27

How would you

27:27

advise and you actually have you

27:30

mentioned, you have been an

27:30

advisor to some of the top PE

27:33

funds in the space firms like

27:33

silverlake, like Warburg, and

27:36

others, but how would you advise

27:36

today, investors looking to

27:41

approach the b2b payment sector?

27:41

I mean, you just kind of

27:43

mentioned a few things to look

27:43

out for that you think we've got

27:46

really right here. But what I

27:46

don't know anything about b2b

27:49

payments, what should I be

27:49

thinking about or looking for?

27:52

In some ways that

27:52

goes back to what we talked

27:53

What is the greatest area of opportunity for investors in b2b payments, some

27:54

of the themes you touched on about earlier. It starts at the

27:55

top. Is there a management team

27:55

earlier, there are a few things

27:55

you'd say I really like this

27:59

in place that has relevant

27:59

experience in the b2b processing

27:59

aspect of b2b, it could be

27:59

something we're doing or some

28:03

world? Do they get up every day

28:03

and live that? And have they

28:06

other things we're not doing?

28:07

shown a track record of creating

28:07

successful organizations? And

28:11

then it is really peeling back?

28:11

What is the expression the onion

28:15

and looking at the various

28:15

layers of who their partners

28:19

are? What technology they built

28:19

themselves? Or who are they

28:22

dependent upon? To get

28:22

technology to deliver a solution

28:26

that creates the foundation of

28:26

whether it's a viable enterprise

28:30

or not? And then you take it one

28:30

step further on? What is their

28:34

mission? What are they trying to

28:34

accomplish? What are they trying

28:38

to focus? Is it a certain sector

28:38

is that a certain vertical is

28:43

that trying to deliver select

28:43

solutions like virtual cards in

28:46

conjunction with ACH

28:46

domestically, not

28:49

internationally, the both of the

28:49

things that a PE firm definitely

28:53

will be looking at as part of

28:53

their evaluation of an

28:57

investment or an organization

28:57

that there's no quick way to

29:00

success you have to earn it. And

29:00

cutting corners is a disaster in

29:05

the payments world because of

29:05

what I said earlier, your moving

29:09

people's money. And if you make

29:09

mistakes, that comes back

29:12

quickly, to cause you

29:12

unnecessary headaches, so PE

29:16

firms, banks are going to take

29:16

their time to look at those

29:19

things that I call part of the

29:19

value chain for investing in b2b.

29:38

When you think of FinTech, you know, they're they're involved, you know, four

29:40

or five major areas, whether

29:43

it's payments or crypto or

29:43

figuring out ways to improve

29:49

lending digital peer to peer,

29:49

the payments front you have the

29:53

ability to digitize things and

29:53

move it and build scale and

29:57

repeatable processes. So that's

29:57

where I think the money should

30:01

be invested if you're involved

30:01

in b2b over b2c. Because the

30:06

room for opportunity is that much greater.

30:08

Yeah a lot less competition.

30:10

A lot less competition.

30:12

There's almost nothing there.

30:13

Well, it's a

30:13

combination of less competition.

30:16

The competition that is there

30:16

may not have all the answers,

30:20

right? Yeah. And then the people

30:20

we're trying to get in need to

30:23

find partners to get them into

30:23

the chair. Okay, is one of the

30:27

reasons I'm excited about the

30:27

b2b world.

30:30

Any other trends

30:30

happening in FinTech, that

30:33

you're excited about outside of

30:33

b2b? Are you involved? Or will

30:38

you? Are you planning on getting

30:38

involved in any of these other

30:40

trends and in FinTech that you

30:40

think are relevant?

30:43

Well, you know, I have the benefit, as you know, having four children. So I watch

30:45

what they do and how they run

30:48

their lives and see how payments

30:48

are occurred in their life and

30:52

what gets them excited. I also

30:52

believe you should stay in your

30:54

lane. And what you know. And I

30:54

think the opportunity for

30:58

FinTech payments is where I can

30:58

have the most fun and get the

31:03

most reward for my time, which

31:03

is obviously your most precious

31:07

asset. So more in payments. More

31:07

in that space is where I think I

31:12

want to spend my time and have

31:12

fun drilling into a whole idea

31:16

of niches and vertical segments,

31:16

the riches are in the niches I

31:25

like to say, that firmly makes

31:25

sense in b2b. But if you're

31:29

going to be involved in FinTech,

31:29

right now, I think putting your

31:32

chips more into the b2b Front

31:32

makes a lot more sense.

31:35

In terms of like

31:35

a prediction or what's next, you

31:38

can remark or think about where

31:38

you see the future of Finexio

31:42

going, but certainly, I don't

31:42

even know but on a five year

31:45

lens about where do you think

31:45

b2b payments will be you're at

31:50

some of the early stages of some

31:50

innovations we're developing

31:52

here, have developed, but I'm

31:52

curious what else you've seen or

31:55

thought about or how you think

31:55

about where the future is going?

31:58

Well, first of all, let's address Finexio. But my perspective on Finexio is, the

32:00

foundation is very strong. It's

32:05

a foundation that can be built

32:05

upon the opportunities with the

32:09

channel strategy, I think sets

32:09

it up to have dramatic growth

32:14

over the next couple years. So

32:14

I'll be excited to watch that

32:17

evolve, as it gets into more

32:17

verticalization and vertical

32:21

segments on top of it. And then

32:21

introducing some new solutions.

32:25

But I expect the whole trend of

32:25

CFOs, looking at their business,

32:31

addressing things like the

32:31

pandemic, addressing things like

32:35

integrating with my ERP to have

32:35

access to data, addressing the

32:40

need of suppliers, to want to

32:40

get paid quicker or find better

32:44

terms under which they're

32:44

conducting business with you is

32:47

all going to lead to movement

32:47

away from checks and the

32:51

explosion of electronic

32:51

transactions. So I think Finexio

32:56

will be one of the beneficiaries

32:56

of that. As far as the future,

33:01

more integrations, more

33:01

commitment to moving data over

33:06

API's that you understand what

33:06

exactly that can mean for you to

33:11

go further into the marketing

33:11

side of my business. So not just

33:16

handling payments, but have

33:16

having data replication

33:19

decisions on how I run my

33:19

business more.

33:23

The benefit of

33:23

API is the real time, nature of

33:26

that, right. It's not file

33:26

based, it's not batch based,

33:29

it's real time. And as we see

33:29

the emergence of real time and

33:33

Faster Payments, and certainly

33:33

the lending opportunity of

33:36

getting folks their money

33:36

faster. I would agree with you

33:39

that the API-ization of this

33:39

space is only just beginning.

33:43

I see the customer

33:43

supplier experience continuing

33:47

to evolve, you had mentioned

33:47

some end products, the data and

33:51

the seamlessness of immediately

33:51

having access to data will only

33:55

continue to grow. The ability to

33:55

update other systems internally

33:59

with that data to make business

33:59

decisions will then evolve. And

34:04

all that will lead to further

34:04

expansion adopting electronics

34:09

and digital payments in b2b, big

34:09

organizations, 1 billion in

34:12

greater in annual revenue, if

34:12

somewhat address some of this.

34:16

Yeah, I mean, one on the payment

34:16

terms. But there's still that

34:19

middle market and even smaller

34:19

organizations that have a long,

34:22

long way to go, before they've

34:22

improved their business. And if

34:26

they don't do it,

34:27

Oh, absolutely.

34:27

Yeah. And they need to compete

34:30

and with consolidation

34:30

happening, and see, you've

34:33

always got to do that there's

34:33

probably $8 trillion of the 12.

34:36

They're in the kinds of

34:36

businesses you just described.

34:40

They don't have the awareness,

34:40

they don't have the abilities

34:42

and they we've spent a lot of

34:42

time talking about the these

34:45

banks and their challenges, but

34:45

these banks don't have the

34:48

solutions available for these

34:48

smaller companies. So if I'm

34:51

$100 million business and I'm

34:51

working with my community bank,

34:55

and I'm competing with someone

34:55

else that's working with the top

34:57

5-10 Banks, some of the

34:57

capabilities they have around

35:00

managing your business are just

35:00

going to be different, just

35:03

substantially different, right?

35:04

You had mentioned

35:04

earlier my time with Sterling,

35:07

and Sterling was really a leader

35:07

in b2c integrating software. But

35:14

the vision to get into b2b, I

35:14

think, really set that

35:17

organization up to

35:17

differentiate. But it's funny,

35:22

they became a trusted partner,

35:22

for a lot of the b2b

35:26

organizations because of the

35:26

things they could do. That word

35:29

trusted partner is not thrown

35:29

around lightly by me. It means

35:32

something the table was set for

35:32

that to occur in the b2b space

35:35

for for next year for sure.

35:36

Yeah. And that's

35:36

our approach. And you have to

35:39

approach and we have more

35:39

knowledge, right? We've got the

35:41

experience team and combined,

35:41

our team probably has 100 years

35:44

of experience in b2b payments,

35:44

but it's the these businesses

35:48

don't so you have to approach it

35:48

in a very consultative advisor

35:52

partner way.

35:53

Consultative sale approach.

35:55

Gary this has

35:55

been a great conversation. super

35:59

interesting. We talked about the

35:59

some of the history of

36:03

electronic payments and banking,

36:03

early developments to current

36:06

day of b2b payment processing

36:06

software integrations modes to

36:11

market platform businesses, and

36:11

growth and developments and

36:15

fintech and b2b payments,

36:15

specifically software channel

36:19

distribution in just almost 45

36:19

minutes, we've covered a

36:22

tremendous amount of ground here

36:22

from someone that's clearly a

36:25

very deep expert, given your

36:25

many years of experience in the

36:28

space. So thank you for joining.

36:28

It's not always we can get the

36:32

insights from somebody that you

36:32

know, built companies like Chase

36:35

Paymentech, right. I mean, it's,

36:35

it's awesome. So, thanks.

36:39

It's been a lot of

36:39

fun. I enjoyed the time today.

36:41

Happy holidays to you and your

36:41

family. I look forward to your

36:44

next visit in person.