Latest / The Payments Shed / Ep. 51 - Live from MPE Berlin: From Expansion to Ecosystem - Inside Shift4’s Global Growth Strategy

Transcript

Ep. 51 - Live from MPE Berlin: From Expansion to Ecosystem - Inside Shift4’s Global Growth Strategy · The Payments Shed

• 0:02
  Welcome back to the Paper Said podcast here live at MPE.
• 0:06
  We are joined by David Joffrey, SVP of Business Development at
• 0:09
  Shift 4. David, thank you for joining us.
• 0:12
  Tell us all about yourself and tell us about Shift four.
• 0:14
  That seems to be everywhere at the minute.
• 0:16
  Thank you so much for posting me.
• 0:17
  So it's a it's a pleasure. Yeah, I'm currently at Shift 4
• 0:21
  for seven years. I run the business development
• 0:24
  team Micro Europe and I would say everything that is outside
• 0:28
  of the US and Shift 4, for the ones that don't know shift four,
• 0:33
  we had a publicly listed entity mainly focusing bringing
• 0:37
  experience into the into the payment ecosystem.
• 0:40
  We do, we are an equator, we are a gateway, we are a processor,
• 0:45
  right? And we have processed more than
• 0:47
  260 billion. So I think that's pretty much
• 0:50
  Shift 4. Perfect.
• 0:51
  And when we talk about shift four, I think one thing that
• 0:55
  comes to mind is acquisitions. Yeah, over the last few years.
• 0:59
  Talk to us a little bit more kind of about the acquisitions
• 1:01
  and kind of what that global growth is looking like for you
• 1:04
  guys. I would say we focus
• 1:06
  acquisitions in two main pillars, right.
• 1:08
  So one of the pillars would be things that can bring value to
• 1:12
  our existing book of business and the other pillar would be
• 1:16
  places where our customers are driving, I would say or they
• 1:20
  want us to do to extend our capabilities, right.
• 1:24
  And some of the most recent acquisitions, 1 was Givex, one
• 1:28
  of the number one loyalty and gift card solutions and mainly
• 1:32
  specialized in retailers and hospitality.
• 1:35
  And the other one big acquisition that I think that
• 1:38
  most of the people knows has been like Global Blue bringing
• 1:41
  the experience of the tax free and the BCC to complement our
• 1:45
  existing services as well for retailers, for hospitality and
• 1:49
  from different. Verticals and I assume that
• 1:51
  acquisition of Global Blue would then mean a huge opportunity to
• 1:56
  sell the rest of the products of Shift 4 to other Global group
• 1:58
  customers. Yeah.
• 1:59
  At the end, at the end of our strategy, it's like to combine
• 2:03
  360 greater view into into the merchants, right or or to the
• 2:11
  final customer. So having the capability to
• 2:14
  bring the gateway to bring the payment processing to being the
• 2:18
  additional services like loyalty gift cards like DCC, tax free,
• 2:22
  is that where we think that it brings value and everything
• 2:25
  combined to one single unified platform with one integration
• 2:29
  API, I think is what we are really investing and what these
• 2:33
  type of acquisitions are. And with the acquisitions of
• 2:36
  some of the European customers, is that a huge of set of
• 2:40
  important pieces that shift for looking at from from the US
• 2:43
  perspective? Yeah, absolutely so.
• 2:46
  And when we talk about merchants today, you want to make sure
• 2:49
  you're helping the merchants go across the world and following
• 2:52
  kind of where Shift 4 is moving. What are they asking for from
• 2:57
  you as a Global Payments partner and what are they expecting from
• 3:00
  you? So growth on that side is mainly
• 3:03
  driven by our enterprise customers, even enterprise
• 3:07
  customers that we have in the US or the enterprise customers that
• 3:10
  we have, that we have in Europe. And mainly what they are
• 3:12
  requesting from us is like, hey, I want to be integrated to you,
• 3:16
  but I don't want the hassle to be complete.
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  Start from the Scribe Tech integration in order to expand
• 3:23
  into the new market. So what we bring is like 1
• 3:26
  unified connection, right, to bring that, to bring all those
• 3:29
  capabilities that obviously if someone is expanding into
• 3:33
  Europe, you would, you would expect to pass like local
• 3:36
  currencies, local people in the ground, local languages and
• 3:40
  everything into one single. It sounds like a conversation we
• 3:45
  have with merchants is what are merchants wants.
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  What you mentioned is 1. Integration that allows you to
• 3:50
  go into any country in any region and have one necessary
• 3:54
  car provider, but also one local payment provider, one gift card
• 3:59
  or loyalty providers. Sounds like that's what Shift
• 4:01
  Force striving to do. Yeah, absolutely.
• 4:03
  And bringing everything together into one single portal that at
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  the end, what we have seen is that bringing everything into
• 4:13
  one unique platform, it gives you the ability just want to be
• 4:17
  more efficient in the, I would say the Omni channel experience,
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  right? Because it doesn't matter if
• 4:21
  it's car present, car not present, call center or whatever
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  data clarity, right? Because at the end, the data is
• 4:29
  in one place and one source of trust, right?
• 4:32
  And at the end, it also brings efficiency because when we look
• 4:35
  at sometimes it's more important to win 1% on the approval rates,
• 4:41
  right? And so having in different
• 4:44
  systems can bring more failure. So having everything combined
• 4:47
  into one unique ecosystem can bring this additional bids on
• 4:51
  approval. Rates and how does that then
• 4:53
  work sometimes when you have maybe orchestration platforms or
• 4:56
  or gateways that suggesting to merchants that they should have
• 4:59
  more than one acquiring partner so they can try and understand
• 5:03
  acceptance rates? That's a that's also a really
• 5:06
  good point. And I think that we have that
• 5:08
  capability as an orchestration platform, right.
• 5:10
  So we have logics for cascading, we have routing capabilities, we
• 5:15
  are connected to more requires where in every place where she
• 5:18
  Ford is not present as well. We have local equators that that
• 5:22
  we are connected, we wider our coverage like Africa and Asia
• 5:27
  Latam. So in every place that we are
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  not there, we have also those connections.
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  And the places that we have our own capabilities, we have also
• 5:35
  backup or maybe because the merchants are so big that they
• 5:38
  want to split right. So we have those capabilities.
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  It's quite interesting and I'm talking from experience of
• 5:43
  working with Shift 4IN in previous roles.
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  The way you're able to show data to your merchants is one of the
• 5:49
  best, and that's come from someone who's worked in
• 5:51
  acquiring for a long time. So kudos to you and the team for
• 5:53
  that. Now, you mentioned for unified
• 5:55
  commerce. What does unified commerce mean
• 5:57
  to you? What does it mean to shift for?
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  I would say for me, definitely a business development for the
• 6:06
  unified commerce team, right? So I'd say unified commerce is
• 6:12
  going beyond, I would say the traditional payments and
• 6:16
  unifying in just one platform, what I was mentioning before,
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  right? The unifying in one single
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  platform, the unified experience that could be, I don't know,
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  like a visible supermarket with the autonomous, I would say, and
• 6:29
  integrating all these partners or Isvs or when we go into the
• 6:33
  stadium, having the the restaurants, having the
• 6:37
  ticketing, having everything integrated with all the say
• 6:41
  third party providers and having everything into one, in, into
• 6:44
  one single point of interaction for the merchant side, right.
• 6:47
  So the unified, the unified experience is integrating all of
• 6:51
  these additional services combined with the payments.
• 6:55
  And you mentioned around stadiums, obviously Shift Ford
• 6:57
  are doing quite a lot in that space.
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  What sets Shift Ford maybe apart from others when we talk about
• 7:03
  the stadium, hospitality, commerce piece?
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  So I would say there is, there is, there is something, there is
• 7:14
  something on the bone right of of shift Ford where where we are
• 7:19
  penetrating those markets because we try to bring I would
• 7:23
  say a unified experience, right. So imagine when we look at the
• 7:27
  stadium side of things, imagine having the capability if you are
• 7:32
  a seasonal ticket and you are and you are the team who make an
• 7:37
  agreement with the restaurant outside of your space and you
• 7:40
  say OK, from 5:00 to 7:00, if you are a seasonal ticket, you
• 7:44
  are going to have 50% of discount in certain times,
• 7:47
  right. So weaving the full, I would say
• 7:50
  funnel, right, who also provide the merchants and additional
• 7:54
  lines of revenue, additional lines of experience in order for
• 7:57
  them to at the end provide a better support for their.
• 7:59
  Company and it comes back to not just merchant loyalty, but
• 8:03
  consumer loyalty, right? Because as a season ticket
• 8:05
  holder you'd feel like the the the club that you're supporting
• 8:09
  is understanding you and your habits as a consumer to say, hey
• 8:13
  David, you drink Estrela when you come to at 1/2 time.
• 8:17
  Why do you order in Australia? And it'll be ready for you to
• 8:19
  collect all by that loyalty kind of date that you'll get and
• 8:22
  you'll be able to make insights off it.
• 8:24
  Absolutely. And even going and being on the
• 8:27
  match, being seen the match, I say, OK, it's 5 minutes close to
• 8:30
  the half time and then I'm going, I pick up my phone and
• 8:33
  then I check, OK, my order is this, this, this and this.
• 8:36
  And I go and just pick a PIP without innovation.
• 8:39
  So that's that's. What do you think is needed to
• 8:42
  help push innovation as an in as an industry?
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  I would say from our side, we see it as well in two pillars.
• 8:49
  One pillar is like innovation is driven by our existing
• 8:52
  customers. So some of our customers they
• 8:54
  need or they want to expand to a newer places or to have a new
• 8:59
  functionality and new product. And the other thing is that we
• 9:02
  are heavily investing in trying to look at market trends, AI,
• 9:06
  everyone now is talking about AI, but definitely something
• 9:09
  that we have implemented in the onboarding processes.
• 9:11
  We are looking at AI and other type of environments like fraud
• 9:15
  prevention, trust. I would say that's the two main
• 9:17
  pillars that we see that he's driving innovation for.
• 9:20
  Shift four and we look at maybe some of the merchants that Shift
• 9:22
  four were working with, we had good things on the crypto space.
• 9:25
  Tell me a little more kind of where Shift 4 sees crypto in
• 9:28
  stable coin, Yes, they're buzzwords, but where they where
• 9:31
  do they sit within the Shift 4 ecosystem and kind of views or
• 9:35
  payments? I would say, let me place that
• 9:37
  analogy on this stable coin. And stable coins bring like the
• 9:42
  speed of the Internet, right, with the, I would say with the
• 9:47
  security of the underlying asset that it could be the euro or the
• 9:50
  dollar, right. So I think it's extremely
• 9:52
  important for B2B customers because it allows them to move
• 9:56
  money across different, different markets in the speed
• 10:00
  of light like to have that everything absolutely immediate,
• 10:03
  right. And we have several customers
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  and verticals that are really interested and we are getting a
• 10:08
  lot of traction. When it comes to what merchants
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  are asking for, are you having more merchants asking you
• 10:14
  questions around crypto and and maybe accepting as a payment
• 10:18
  method but also receiving settlement in the payment
• 10:21
  methods as well? Yeah.
• 10:23
  If we look at the type of merchants that are interested
• 10:25
  right now, it could be a high luxury retail, it could be
• 10:29
  trouble, It could be I would say the newborn digital type of of
• 10:36
  merchants Forex or amongst other, right.
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  And what they are valuing is like the settlement of stable
• 10:45
  coins is the capability to settle on the following day
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  anywhere in the world where you have the bank account, right,
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  like the immediate push payments, right.
• 10:54
  And I think that this is going to be it's going to evolve into
• 10:59
  the immediate settlement per transaction, Yeah, right.
• 11:01
  That at the end you will have available, but the moment that
• 11:04
  the final consumer is going to pay to the merchant.
• 11:08
  Stopping that from happening today.
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  I would say there's two main things.
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  First, the UX experience, I would say from the final
• 11:17
  customer needs to improve a little bit.
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  And then the other side, I would say regulation.
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  We took a little bit of time and to regulate now Mika in Europe,
• 11:27
  it's coming into play. We have seen several initiatives
• 11:30
  in the US that are, I would say, evolving into that space.
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  So I think it's a matter of time, but we see a huge growth
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  with more than double digits growth per quarter.
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  So it's definitely a basic. It sounds like it can't be
• 11:44
  ignored anymore, right? It's not the future, it's the
• 11:47
  present, right? And let me add one thing is that
• 11:49
  we have the digital euro coming in coming I would say at the end
• 11:52
  of the of this year. So I think all of this will
• 11:55
  definitely incentivize the use case of this stable point.
• 11:59
  And look, it will be Terry will not talk about MPE as we hear
• 12:04
  having all these meetings and interviews.
• 12:06
  Tell a little more on kind of your thoughts and MPE and why
• 12:09
  you love it so much. I would say MPE it's I would say
• 12:13
  it's a different type of event. One of the things that I like
• 12:17
  that I like from MPE most is like it's a small event, but
• 12:21
  everyone is here, right? It gives you the opportunity
• 12:24
  that in an hour and a half to have this at all the booth and
• 12:28
  then just to spend the rest of the time like talking to people,
• 12:31
  interacting to others and trying to understand the merchants.
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  What are they needs? What are they paying for?
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  And and see colleagues from the industry that at the end we know
• 12:41
  that it's a really close, I would say environment, right.
• 12:43
  So it's it's. It's really nice.
• 12:45
  We definitely enjoy it. And the last bit of the show
• 12:47
  here. David, tell me one thing that
• 12:50
  really frustrates you, you like to bring to the shelf of shame
• 12:52
  on the interview today. I would say the some sort
• 12:59
  sometimes like the lack of clarity on the skin fees, skin
• 13:03
  fees is like usually as we were discussing, it's like a big
• 13:07
  book, right that brings really hard or it makes it really hard
• 13:11
  even we tried and we are super transparent in the pass through.
• 13:15
  I would say cost brings, I would say really hard for the
• 13:18
  merchants to predict and I would say what's going to be the cost
• 13:21
  for certain transaction, right, Yeah.
• 13:24
  And it's an interesting piece, the ability to forecast skiing
• 13:27
  fees would be like the ability to do the lottery and win right?
• 13:30
  And it's really, really difficult.
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  Maybe that is something we can pick up with the schemes that
• 13:33
  are late today. David, thank you so much for
• 13:35
  your time. Have an incredible event and
• 13:37
  we'll see you again. Soon.
• 13:38
  Thank you so much. Thank you.