Latest / Leaders In Payments / Turning Hotel AP Into a Profit Center with Brian Dass & John Jamieson from OneJourney | Episode 537

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Turning Hotel AP Into a Profit Center with Brian Dass & John Jamieson from OneJourney | Episode 537 · Leaders In Payments

• 0:00
  SPEAKER_00: Welcome to the Leaders in Payments Podcast, where we talk to sea level leaders from across the payments landscape.
• 0:07
  SPEAKER_00: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  SPEAKER_00: We will also hear stories from our guests about their journeys to the top.
• 0:18
  SPEAKER_01: Hello, everyone, and welcome to the Leaders in Payments Podcast.
• 0:20
  SPEAKER_01: I'm your host, Greg Myers, and today's special guests are Brian Das, CEO and co-founder, and John Jameson, Chief Revenue Officer and Co-Founder of OneJourney.
• 0:29
  SPEAKER_01: So, Brian, John, thank you both for being here and welcome to the show.
• 0:32
  SPEAKER_03: Thank you, Greg.
• 0:33
  SPEAKER_03: Thanks for having us.
• 0:34
  SPEAKER_03: Thank you, Greg.
• 0:35
  SPEAKER_01: Yeah, absolutely.
• 0:36
  SPEAKER_01: So, John, let's start with you.
• 0:38
  SPEAKER_01: Give us a little background on your career, how you became involved in OneJourney, and what excited you about the opportunity.
• 0:44
  SPEAKER_02: So I've worked within One Market my entire professional career.
• 0:48
  SPEAKER_02: So for the last 33 years, I worked within financial services.
• 0:51
  SPEAKER_02: Started working with a consumer credit card company focused on affinity marketing.
• 0:57
  SPEAKER_02: MBA was there while I was in college, worked for about a dozen years, left to then go into consumer banking, where I worked with Bank of America and then did some work within group banking and the treasury management side.
• 1:12
  SPEAKER_02: Following that, I went and worked in commercial payments with a company that was called Ride Express, but rebranded themselves to WEX, which is a kind of leader in the commercial payment industry.
• 1:23
  SPEAKER_02: So worked there for 11 years.
• 1:26
  SPEAKER_02: Initially was an outside sales, territory salesperson, and then grew into kind of an emerging market leader where I would try to find the latest vertical market and to either qualify or disqualify it.
• 1:40
  SPEAKER_02: And if we qualified it, we would then see how we could expand that and have our team, you know, chase after that.
• 1:46
  SPEAKER_02: By doing that within several markets, I had the idea that I'd like to go out and do this on my own.
• 1:52
  SPEAKER_02: So with a partner, was able to start an issuing company, you know, similar to what WECH does but smaller in scale called PayClearly within several markets that we were there.
• 2:01
  SPEAKER_02: Did that for about seven years and then started a consultancy firm called Collide.
• 2:07
  SPEAKER_02: Done that for three years.
• 2:07
  SPEAKER_02: And the magic behind Collide is I have numerous partnerships.
• 2:11
  SPEAKER_02: So almost acting as an orchestrator for my clients where I can really listen, understand what their wants and needs are, and instead of previously only being able to solve, let's say, 60% of the problems, I actually can solve all their problems now.
• 2:25
  SPEAKER_02: So that was exciting.
• 2:26
  SPEAKER_02: During that process, I re-engaged with Brian, who I had met when I was at PayClearly, and he was sharing with me what he was doing.
• 2:33
  SPEAKER_02: And uh I was really intrigued about it because uh my last company that was the market that we were in the process of launching into.
• 2:41
  SPEAKER_02: So I knew that it had value.
• 2:43
  SPEAKER_02: And then as Brian started to roll out what he think thought we could do with automations and artificial intelligence, that solution which was here started to come out, and our eyes got bigger and bigger, and we realized that we had something special here.
• 2:56
  SPEAKER_02: So that's that's me in a nutshell, and I'll hand it over to Brian.
• 3:00
  SPEAKER_03: Thanks, John.
• 3:01
  SPEAKER_03: So yeah, it's a little bit of skinny on my background.
• 3:03
  SPEAKER_03: I come out of hotel operations.
• 3:05
  SPEAKER_03: I was in it for 15 years in New York City.
• 3:08
  SPEAKER_03: Uh, worked in probably every department, you know, from being a night auditor to being a bellman to being uh in housekeeping, sales, I was a general manager, I was in maintenance.
• 3:21
  SPEAKER_03: I think it got me a good sense or a feel, sort of preparedness for being an entrepreneur later because I was doing so many things.
• 3:28
  SPEAKER_03: And somewhere in the middle of the dot-com era, I think around 95, I came up with the great idea that, you know, people may just go onto websites in the future and actually make bookings and reservations.
• 3:40
  SPEAKER_03: So I actually developed while I was still on property, I developed one of the world's first booking engines for hotels, specifically independence, because that's the type of properties that I come from.
• 3:52
  SPEAKER_03: And having said that, I launched my first startup.
• 3:54
  SPEAKER_03: I was in my sort of mid-20s, so to speak.
• 3:58
  SPEAKER_03: And yeah, and uh raised some seed capital, jumped into it full-time before the end of the century.
• 4:03
  SPEAKER_03: And before you know it, the booking engine space, hotel websites, traffic to the website took off.
• 4:09
  SPEAKER_03: And we raised some seed capital.
• 4:12
  SPEAKER_03: And before you know it, we got acquired in 2003 by what was then probably much bigger company than me called TravelClick, which is now part of Amadeus Hospitality.
• 4:23
  SPEAKER_03: And they wanted to get into the booking engine space.
• 4:25
  SPEAKER_03: And I pretty much had most of the East Coast locked up in terms of independent hotels who wanted to get online.
• 4:32
  SPEAKER_03: Most of them didn't have their first websites, so I was actually registering the domains for some of those hotels that are really popular and out there and building their first websites.
• 4:42
  SPEAKER_03: So I saw that opportunity and I saw the trajectory and the growth.
• 4:45
  SPEAKER_03: And because of my hotel operations background, the kind of tools that we provided for the hotels were the right type of tools to help them compete with andor level the playing field with companies like today, booking.com and Expedia.
• 4:59
  SPEAKER_03: There's been a lot of consolidation in that market, but still they're very reliant on that business coming from a third party.
• 5:05
  SPEAKER_03: And it's quite costly.
• 5:06
  SPEAKER_03: After that company and I exited in 03, and I'm a sucker for punishment, I realized that there's still a big opportunity in booking platforms.
• 5:15
  SPEAKER_03: So I jumped back into it in 2004.
• 5:18
  SPEAKER_03: I redid the whole and reimagined the booking engine.
• 5:21
  SPEAKER_03: My solution architected it.
• 5:23
  SPEAKER_03: I have a bit of an IT background as much as I work in operations and sales and marketing.
• 5:28
  SPEAKER_03: And then I pioneered this new way of combining the booking engine commission or the cost of the booking engine to actually get this transaction and the infrastructure.
• 5:39
  SPEAKER_03: I pretty much said, hey, look, on a performance basis, I will give this to you and your website, and I'll help you not just increase your business, but more importantly, increase that conversion on your website.
• 5:50
  SPEAKER_03: And for doing that, I'll be paid a percentage of that business.
• 5:53
  SPEAKER_03: And then I developed more tools around it.
• 5:55
  SPEAKER_03: So I had the very early inclination of being able to create things that were performance-based as opposed to asking the hotels to go into their decreasing margins, profit margins, and pay me for something that they weren't sure that was going to produce, right?
• 6:10
  SPEAKER_03: And it was early days, and then they started to see that.
• 6:13
  SPEAKER_03: Now most hotels in the world have a booking engine because of this early thing that we pioneered with the booking engine back in the mid-90s.
• 6:20
  SPEAKER_03: Having said that, the second company went on and we did a strategic deal with a company out of Dallas where you're located, Greg, a company called Pegasus Solutions.
• 6:29
  SPEAKER_03: And that company had a booking engine, but unfortunately, their booking engine really didn't have the teeth that the hotels were looking for and the evolution.
• 6:37
  SPEAKER_03: So we came in, we became the strategic partners of that company.
• 6:41
  SPEAKER_03: We worked with thousands of their hotels.
• 6:43
  SPEAKER_03: And then somewhere around 2010, they said, hey guys, you're getting too big here.
• 6:47
  SPEAKER_03: We're gonna need to bring you in-house.
• 6:49
  SPEAKER_03: And uh, we ended up making a deal and getting acquired by Pegasus Solution.
• 6:53
  SPEAKER_03: And having said that, you know, after the Pegasus Solution, we went on.
• 6:57
  SPEAKER_03: I myself went on, created a few companies, helped a few startups.
• 7:01
  SPEAKER_03: I ended up in Shark Tank.
• 7:02
  SPEAKER_03: I was mentioning to that earlier.
• 7:04
  SPEAKER_03: That was an interesting one.
• 7:05
  SPEAKER_03: I could check that off my bucket list.
• 7:07
  SPEAKER_03: But I kept steady in the hospitality space.
• 7:11
  SPEAKER_03: This is what I know, this is what I do really well.
• 7:14
  SPEAKER_03: I'm experienced, I'm an expert.
• 7:16
  SPEAKER_03: And then, as John said, a little bit later, we were working on a project together, building out a website for a company that was an online travel agency and they needed a booking platform.
• 7:27
  SPEAKER_03: And I ran into John, and then that's where I got introduced to the virtual card.
• 7:32
  SPEAKER_03: And I'm like, this is really interesting.
• 7:34
  SPEAKER_03: You mean all of these bookings coming in here?
• 7:36
  SPEAKER_03: You could make a piece of what they call the interchange.
• 7:39
  SPEAKER_03: And I had to learn this, and I realized fairly quickly on that the hotels didn't understand what that meant either.
• 7:45
  SPEAKER_03: So, anyway, long story short, John and I became friends and we started to talk over the years.
• 7:51
  SPEAKER_03: And as he mentioned, OneJourney, I launched it around automations.
• 7:55
  SPEAKER_03: And from there, I realized that payments are probably very, very good to integrate into the automations.
• 8:02
  SPEAKER_03: And that's where the idea was born, a combination of both of our backgrounds, and then our focus being in hospitality.
• 8:09
  SPEAKER_03: So one journey is focused specifically on hospitality operators.
• 8:13
  SPEAKER_03: That's both on the hotel and accommodation side and on the restaurant side as well.
• 8:18
  SPEAKER_01: Okay.
• 8:18
  SPEAKER_01: So that sounds like the original idea behind it.
• 8:21
  SPEAKER_01: So, Brian, what was the problem that you were really trying to solve originally?
• 8:25
  SPEAKER_01: And then how has that kind of vision evolved over time?
• 8:28
  SPEAKER_03: Yeah, it's great question.
• 8:30
  SPEAKER_03: So the original problem was around gaps inside of a hotel.
• 8:34
  SPEAKER_03: A typical 100-room hotel is probably using at least 50 to 55 different pieces of technology to run their operation.
• 8:44
  SPEAKER_03: A lot of the independent hotels are remiss.
• 8:46
  SPEAKER_03: They don't necessarily have IT departments.
• 8:49
  SPEAKER_03: Sometimes it's just the general manager or the owner or somebody trying to put it together.
• 8:53
  SPEAKER_03: And then they're working with so many different providers.
• 8:56
  SPEAKER_03: They're not really good at project management.
• 8:59
  SPEAKER_03: They're really good at putting heads in beds, managing guest and customer experiences.
• 9:03
  SPEAKER_03: So a lot of times they take on these partnerships and these things don't actually connect or integrate or glue well together.
• 9:11
  SPEAKER_03: So you find the hotel is constantly changing systems.
• 9:14
  SPEAKER_03: However, the systems that they work with, they each all have independently their own set of problems that are continuously needing to be fixed.
• 9:22
  SPEAKER_03: The hotels get to a point and say, isn't there a way that all of these things could actually be fixed?
• 9:28
  SPEAKER_03: Because I'm having to throw in too much manual labor and it's costing me more warm bodies that can be focused on the guest journey and the guest experience.
• 9:37
  SPEAKER_03: And now they're focused on trying to fix technology that I didn't even build myself.
• 9:42
  SPEAKER_03: So that was the opportunity where AI became available, and we saw the opportunity to use AI and automations to help them fix things, to reduce the cost that they were spending in manual labor.
• 9:55
  SPEAKER_03: So that's where it was born.
• 9:57
  SPEAKER_03: And then at the same time, these AI automations cost money.
• 10:00
  SPEAKER_03: And there are tons of companies that started to come out of the woodwork charging thousands of dollars to fix these little cracks and gaps.
• 10:07
  SPEAKER_03: And of course, it affects the profit margin of a hotel.
• 10:10
  SPEAKER_03: And that's where the opportunity with the card came in.
• 10:13
  SPEAKER_03: I realized that if I can help a hotel take a cost center, which is paying suppliers with ACHs and checks and wires and cash, and we could help them with this interchange where we could make more of their expenses cartable and they could get back cash, this cash could ultimately pay for the AI automations.
• 10:33
  SPEAKER_03: So this is where the idea was born.
• 10:36
  SPEAKER_03: How do we not necessarily keep compounding more and more costs, dipping into the profit margin of the hotel, but use something that they have already to actually pay for these automations?
• 10:48
  SPEAKER_01: Okay.
• 10:48
  SPEAKER_01: So, John, from the payment side, why haven't the traditional payment solutions addressed these challenges?
• 10:55
  SPEAKER_02: So that's a great question, Greg.
• 10:57
  SPEAKER_02: Part of I think the struggle was it's what's the path of least resistance?
• 11:01
  SPEAKER_02: And as you looked at financial institutions or commercial payment companies, they were offering a solution and that they would allow uh the hotelier to then take that and use it.
• 11:14
  SPEAKER_02: And in their mind, they're like, well, I can simply make payments, I suppose, but it seemed to be harder to do that than what their current process was.
• 11:24
  SPEAKER_02: What the payment company was doing was being short-sighted, and I can understand why.
• 11:29
  SPEAKER_02: And here's a perfect example.
• 11:31
  SPEAKER_02: We had an online travel agency, is a good example, kind of related to hospitality and travel.
• 11:37
  SPEAKER_02: With little work, they could stand up a solution where they were spending between 20 and 40 million dollars annually.
• 11:43
  SPEAKER_02: So the profitability is much higher.
• 11:45
  SPEAKER_02: If I have a hotel and I go through, you know, a vendor enrollment process and allow that hotel to now use that product with each property, the volume will be less.
• 11:56
  SPEAKER_02: So from an individual department, sales team, et cetera, they're going to stray towards the prospects that have greater spend opportunities.
• 12:05
  SPEAKER_02: What they failed to see was how am I, and Brian alluded to this, the key is solving a problem.
• 12:12
  SPEAKER_02: If they took the time to actually understand the processes that each hotel or hotel group had, there's relatively easy solutions, whether it's building automations, having the ability to, you know, have things connected to general ledgers, it's really a collection of easy solutions.
• 12:31
  SPEAKER_02: And once that's done, if I have a hotel group that has a hundred properties, well, I now have a hundred individual accounts that will spend, let's say, you know, between one and five million dollars a piece annually.
• 12:44
  SPEAKER_02: Compounding that, it's a significantly large opportunity.
• 12:47
  SPEAKER_02: And in the industry, and I can speak with the companies that I had and worked with, they weren't chasing it.
• 12:52
  SPEAKER_02: So this was in a saturated market with where people are chasing multiple industries.
• 12:58
  SPEAKER_02: You had one that really hasn't even begun to be penetrated.
• 13:03
  SPEAKER_02: So hopefully that answers your question.
• 13:04
  SPEAKER_01: Yeah, and let's just a little follow-on to that.
• 13:06
  SPEAKER_01: And Brian mentioned the virtual card and the opportunity there and the sharing of interchange.
• 13:11
  SPEAKER_01: And a lot of people listening will kind of get that because a lot of people listening will be payments people.
• 13:15
  SPEAKER_01: But you know, walk us through how that works and then what could it mean financially for a typical hotel operator.
• 13:22
  SPEAKER_02: 100%.
• 13:23
  SPEAKER_02: So let's keep the math very simple.
• 13:25
  SPEAKER_02: So there could be a fluctuation whether it's lower or higher.
• 13:29
  SPEAKER_02: Let's say each hotel received 1% back in cash.
• 13:33
  SPEAKER_02: And as they're paying their bills, they're looking at well, I have these procurement type transactions that I'm making, you know, on a monthly basis.
• 13:42
  SPEAKER_02: I have my accounts payable transactions, and when they compile all this together, along with one-off transactions, it's it adds up to millions and millions of dollars.
• 13:52
  SPEAKER_02: So the key is initially taking the time to enroll each supplier in that form of payment.
• 13:59
  SPEAKER_02: And if I go through a waterfall approach, I'm actually calling every single, literally every single supplier, having the ability to then say, Do you accept a card payment?
• 14:10
  SPEAKER_02: And the answer is yes, no, or why do I have to?
• 14:13
  SPEAKER_02: The more you have those yeses, or we educate, why do I have to, you have a higher and higher rate of acceptance.
• 14:19
  SPEAKER_02: Well, that higher and higher rate of acceptance leads to greater spend, which leads to more cash back.
• 14:26
  SPEAKER_02: So let's you know look at a hotel that's spending, let's say$5 million annually, you know, and that's probably a good example.
• 14:33
  SPEAKER_02: There'll be some that spend significantly more and some less.
• 14:36
  SPEAKER_02: So just with that model, with 1% back, and this is a very conservative estimate, that hotel is now picking up$50,000 in newfound revenue, which is great.
• 14:46
  SPEAKER_02: And I can add that right on to my credits on my balance sheet.
• 14:50
  SPEAKER_02: Now, the question that you would have to ask is how many bookings, successful bookings, would it take in order to gain that additional$50,000?
• 15:00
  SPEAKER_02: So it's not just saying the cash back.
• 15:02
  SPEAKER_02: If I remove that and walk through that conversation and speak in a language that they are very familiar with, then at that point there's greater buy-in.
• 15:11
  SPEAKER_02: So it's the money, that$50,000.
• 15:14
  SPEAKER_02: But taking on and realizing what I've just done is I've gained efficiencies, I have a smoother process.
• 15:20
  SPEAKER_02: There are some more automations that I didn't have.
• 15:23
  SPEAKER_02: And now I've converted a cost center into a profit center where I've now ingested$50,000.
• 15:29
  SPEAKER_02: And so it opens the, let's say the finance departments or the back office within that hotel to look at every single supplier.
• 15:38
  SPEAKER_02: And now they're saying, okay, when we have new contracts, we're going to start negotiating these contracts because they're going to accept card.
• 15:44
  SPEAKER_02: And that what will happen is that sphere of acceptance is here and it starts to grow out.
• 15:49
  SPEAKER_02: And as I said earlier, as that grows out, so does the revenue share.
• 15:53
  SPEAKER_01: Okay.
• 15:54
  SPEAKER_01: Well, Brian, John did a great job kind of explaining the value.
• 15:57
  SPEAKER_01: Let's dive into kind of how it works.
• 15:59
  SPEAKER_01: Let's talk about the technology.
• 16:01
  SPEAKER_01: So can you speak to, you know, what does that hotel need to do to make this happen?
• 16:05
  SPEAKER_03: Yeah, great question.
• 16:07
  SPEAKER_03: So we had to create this thing as light lifting as possible because as you can imagine, in hotels, a lot of the finance people probably are the ones that have been there for the last 10 or 15 or 20 years, as opposed to the front of the house that's like a revolving door.
• 16:23
  SPEAKER_03: So which means they're used to doing things a certain way.
• 16:26
  SPEAKER_03: Matter of fact, I got a statistic from one of the big investment groups out there that did the research.
• 16:32
  SPEAKER_03: Over 60% of every hotel in the United States uses QuickBooks.
• 16:36
  SPEAKER_03: Whereas you've got a lot of, you know, there are some accounting systems that are out there that's built around the compliance of Usally that has to do with hotels and how it works.
• 16:46
  SPEAKER_03: So they're far and in between, but the adoption rate for those is not high because of the fact that the finance people at these hotels have been using QuickBooks for so long.
• 16:55
  SPEAKER_03: So they've been hacking it, pulling down spreadsheets, running it outside of QuickBooks.
• 17:00
  SPEAKER_03: So the thing here now is to come in and how do we get them in quick adoption?
• 17:03
  SPEAKER_03: So we created something that was fairly light that didn't involve integrations at this point to their QuickBooks.
• 17:10
  SPEAKER_03: So we positioned ourselves as a card issuing orchestrator, meaning that we didn't necessarily want to be pinned that depending on geographic location, that we were working with one program manager or card issuer on the bank side, we have multiple connections that are there.
• 17:27
  SPEAKER_03: So depending if we're working in the United States or we're working in Europe, we can actually switch the different card issuers depending on location.
• 17:34
  SPEAKER_03: So our platform is has a flagship AI automation.
• 17:38
  SPEAKER_03: It's called reconciliation.
• 17:40
  SPEAKER_03: One of the biggest problems that hotels have, so we had to start with what I call a priority one problem.
• 17:46
  SPEAKER_03: And a priority one problem is that every month a hotel has to download invoices from tens, hundreds of different providers of bookings, and they have to reconcile that against the information in the property management system on whether or not one, if these people were no-show or they're being billed for something that they shouldn't pay for, and the commission, the commissions are all different, and then they had to run that report and see how many nights this person or this group actually stayed, and then they had to do that manually.
• 18:18
  SPEAKER_03: So they were running these things.
• 18:19
  SPEAKER_03: So what we did was create an AI reconciliation automation where you could take the property management system data, take all of the invoice data and throw it onto our platform, and it'll do the magic.
• 18:31
  SPEAKER_03: That's taking people hundreds, thousands of hours a month at a hotel to literally do this.
• 18:37
  SPEAKER_03: So a lot of man hours, a lot of cost, we were reducing it.
• 18:40
  SPEAKER_03: And this is what we call the soft cash, as opposed to the hard cash, which is the cash back on the interchange.
• 18:46
  SPEAKER_03: Now that this has been reconciled, our system allows you the ability to correct it internally.
• 18:52
  SPEAKER_03: But if it's all correct, it sets it up and tees it up for approval, which means now that it's ready, you just have to say, hey, it's ready to go.
• 19:00
  SPEAKER_03: This is as simple as it is in the system, and say generate the card based on a set of parameters, how you want to pay, when you want to pay, whether or not there's a credit float in there or not, all of these parameters that go there.
• 19:12
  SPEAKER_03: But it's as simple as either you have a quick invoice that you needed to pay, and you could either upload or generate it right in the system, or drop in your invoices and your commission to be reconciled, I should say, the reports, and it generates and digitizes it, and your accounts are already loaded in the system.
• 19:28
  SPEAKER_03: Those are ready to go.
• 19:29
  SPEAKER_03: You hit approve, it sets up, it sends it out to either the travel agency or the supplier, or you could generate it to yourself so you can go online and actually punch it in and actually pay for the service or the supplier.
• 19:40
  SPEAKER_03: So it's as simple as that.
• 19:42
  SPEAKER_03: Now we're getting into a place where we're picking up hotels and now we have to integrate so we can send back information from the ledger to QuickBooks as an example.
• 19:51
  SPEAKER_03: So you'll see all of the actual payments that have been made or the credits that have been made.
• 19:55
  SPEAKER_03: And it's as simple as auto debit.
• 19:57
  SPEAKER_03: So if you have your bank account with Bank of America and it's set up with the issuer, what happens is there it can do a top-up auto debit that it looks and does a sweep and sale, put another$500 into the expense digital wallet.
• 20:10
  SPEAKER_03: And that digital wallet is only designed, built, and set up and implemented for you to make your expense payments to your suppliers.
• 20:17
  SPEAKER_01: Okay.
• 20:17
  SPEAKER_01: So, Brian, continuing with you, you mentioned this earlier that the AI automations that you were just talking about, given that you have the share of interchange or the rebate on interchange back, the AI automations have become free.
• 20:32
  SPEAKER_01: So maybe talk through what that model looks like and kind of how does the hotel view that?
• 20:36
  SPEAKER_01: Like, do you lead with the automation?
• 20:38
  SPEAKER_01: Do you lead with the rebate?
• 20:39
  SPEAKER_01: How does that work?
• 20:40
  SPEAKER_03: Yeah.
• 20:40
  SPEAKER_03: So I think, you know, having sold to hotels and being a hotelier, sometimes the first thing is to understand what their problems are, even if it's not directly associated or connected to the payment police.
• 20:53
  SPEAKER_03: Because a lot of times when I went in at first and I tell somebody, hey, you know, this cost center could be a profit center and you could use virtual cars because everything is going digital.
• 21:02
  SPEAKER_03: Somebody says, Well, I'm sending an ACH.
• 21:04
  SPEAKER_03: I don't see any problem with that.
• 21:06
  SPEAKER_03: And I'm like, okay, but do you see a problem that you're sending this out, but you could make money with a virtual card because you're receiving one right now from the big online travel agencies, whether they're Expedia or Booking.com, and you're gladly paying the two or three percent, right?
• 21:22
  SPEAKER_03: On top of the 20 or 22% you're paying on commission, you're paying that for the interchange and they're taking it.
• 21:28
  SPEAKER_03: So to be honest with you, it's all about finding the problem.
• 21:32
  SPEAKER_03: And once you find the problem, they say, hey, you could fix this, and the answer is yes.
• 21:36
  SPEAKER_03: The question is, do you want to pay for that out of your pocket and dip into your margin that is already low?
• 21:41
  SPEAKER_03: Or here, you could start using the card and adopting more of your payments.
• 21:45
  SPEAKER_03: And the more cash that comes back, the more automations you can actually use.
• 21:49
  SPEAKER_03: So, what we've designed it is that we've got a lot of automations.
• 21:52
  SPEAKER_03: We don't just have one, we have over 25.
• 21:55
  SPEAKER_03: So the idea is, and I think part of this conversation was about how do you get some Somebody with a lower amount of spend versus some of the big guys that are doing$10 million a month, the carrot sort of caveat here is to say, I need more problems fixed, but to help me mitigate the cost of that, I'm using these cards to basically pay for the cost of getting these automations done versus going to another company, not necessarily knowing what I'm paying for.
• 22:24
  SPEAKER_03: And I keep paying this every month.
• 22:25
  SPEAKER_03: But in fact, these guys are kind of funding the cost of my operations.
• 22:30
  SPEAKER_03: So we're kind of like operating as like a credit line, or we're throwing you, you know, the ability for you to say, you know what, if I don't have the funds, these guys are going to actually back it because I'm using their cards.
• 22:42
  SPEAKER_03: So that's how we're actually positioning.
• 22:44
  SPEAKER_03: But the key, anytime you go into the hotels, going back to what John said, the reason why companies out there had not done it from the payment space and gotten hotels to adopt, not only because the amounts were small, they weren't really solving problems.
• 22:58
  SPEAKER_03: Because everybody thought an ACH and a wire, what do you mean you're solving a problem?
• 23:01
  SPEAKER_03: I could send money today, right?
• 23:03
  SPEAKER_03: So this is how we started to get the adoption.
• 23:06
  SPEAKER_03: So this is where the future is is that I believe that in the future, it's going to be less about monthly fees and SaaS costs.
• 23:15
  SPEAKER_03: It's going to be about what else you can do with payments to actually help me offset my growing costs around SaaS, as an example.
• 23:23
  SPEAKER_01: Okay, John, payments-related question.
• 23:26
  SPEAKER_01: So all of that sounds easy and good.
• 23:29
  SPEAKER_01: And I think you both have mentioned this.
• 23:31
  SPEAKER_01: They were used to doing it the same old way over and over.
• 23:34
  SPEAKER_01: ACH, I don't have a problem.
• 23:35
  SPEAKER_01: So how do you have that payments conversation?
• 23:37
  SPEAKER_01: How do you convince them?
• 23:39
  SPEAKER_01: What are those obstacles and challenges that you have to overcome when it comes to payments?
• 23:43
  SPEAKER_01: I mean, obviously the rebate and the money makes a difference, but there's more to payments than just that.
• 23:47
  SPEAKER_02: One of the biggest challenges that I've found, and this is really agnostic to any market, Greg, is that when speaking with a chief financial officer, a controller, a vice president of finance, they look at the acceptance of card and say, why would anyone want to do this?
• 24:04
  SPEAKER_02: What I'm doing is I'm cannibalizing the margin of my supplier.
• 24:08
  SPEAKER_02: And I understand, greatly understand their concern.
• 24:10
  SPEAKER_02: But what these companies have done years ago is they've built that interchange cost into their go-to-market expense.
• 24:17
  SPEAKER_02: So it's been there, it's been sitting there for years.
• 24:20
  SPEAKER_02: So they are pleasantly surprised by the amount of suppliers who unconditionally accept card.
• 24:27
  SPEAKER_02: It's a very simple way for acceptance.
• 24:29
  SPEAKER_02: I have, there's no touch.
• 24:31
  SPEAKER_02: If I accept let's say I accept a check and may have to go to a real or digital lockbox that process and then kind of go through there.
• 24:39
  SPEAKER_02: There's the greatest side of fraud right now in payments is still check.
• 24:44
  SPEAKER_02: You know, and ACH is now on the rise.
• 24:46
  SPEAKER_02: But where you can lock that down, and again, this is more counterintuitive where most people think, oh, fraud exists on card.
• 24:53
  SPEAKER_02: Actually, the most controls that you have right now exist within card.
• 24:57
  SPEAKER_02: So that is, you know, it's not a fact, it's incorrect.
• 25:00
  SPEAKER_02: So that's a big challenge.
• 25:02
  SPEAKER_02: But once that's in, just getting someone to do something different.
• 25:06
  SPEAKER_02: You know, what I've seen a lot within payments, where you have a very antiquated manual process.
• 25:13
  SPEAKER_02: But, you know, as humans, over time, when we do this, we've developed efficiencies.
• 25:18
  SPEAKER_02: So what it's taken me, let's say three hours, maybe over 15 years, I can do it in an hour and a half.
• 25:25
  SPEAKER_02: But I could do this once in 15 minutes, right?
• 25:28
  SPEAKER_02: Or I could do this once in less than that.
• 25:30
  SPEAKER_02: It's change, right?
• 25:31
  SPEAKER_02: Change is such a big, big obstacle.
• 25:33
  SPEAKER_02: So it's it's understanding the narrative for acceptance and getting that person within finance to look at it to a different prism.
• 25:41
  SPEAKER_02: And then it's the change factor.
• 25:42
  SPEAKER_02: And once you get past that and understand what people's concerns are and say, look, this will, you know, for all of us, all three of us, and really for anyone who's listening to this podcast today, the most valuable commodity that we all have is time.
• 25:57
  SPEAKER_02: This payment process gives time back.
• 25:59
  SPEAKER_02: And to me, that's worth more than any revenue share that could be out there.
• 26:04
  SPEAKER_02: Because now I have time, I can go into other areas where I haven't been able to manage or I've been able to just kind of put my hand in the holes and hold them from exploding.
• 26:14
  SPEAKER_02: Because if you go into any industry, agnostic, it's not just within hospitality, we are all doing more with less resources.
• 26:23
  SPEAKER_02: And if I can have tools and develop skills that allow true efficiencies, greater value, better data to be out there, and the ability to query anything around those transactions.
• 26:36
  SPEAKER_02: The question isn't, are you interested?
• 26:38
  SPEAKER_02: The bigger question is why haven't you done something like this previously?
• 26:42
  SPEAKER_03: Just to add to that, Greg, what John's saying is that sometimes we get the question, well, I don't think my supplier will actually take a card.
• 26:51
  SPEAKER_03: And I think this is the probably the biggest gray area that suppliers are taking cards.
• 26:58
  SPEAKER_03: You just never asked them and they never volunteered.
• 27:01
  SPEAKER_03: Number one.
• 27:02
  SPEAKER_03: Number two, it's like, oh wow, but how do we tell if they take a card?
• 27:07
  SPEAKER_03: Well, we have a facility by which we can, with our partnership with MasterCard, we can actually look at it and to see if the supplier that you're paying does accept cards.
• 27:17
  SPEAKER_03: But this is one of the things I think that we run up against is that I don't think my supplier would take a card.
• 27:23
  SPEAKER_03: And we've addressed that by becoming part of the solution, not necessarily saying, well, you guys go ahead and call them.
• 27:30
  SPEAKER_03: Maybe you could ask them the question.
• 27:32
  SPEAKER_03: No, we take it on and ourselves proactively because you got to remember it this way.
• 27:37
  SPEAKER_03: If supplier X in geographic region Y, I find out that that supplier actually takes card, the next hotel I go to in that geographic region, I already know that if you give me the list of all of your suppliers, which I we usually ask that in the beginning, I could tell you right away, we do 80% or 90% of them will take a card, right?
• 27:58
  SPEAKER_03: So that actually helps, I think, with quicker adoption, if we ask these questions up front.
• 28:05
  SPEAKER_02: One other thing I think is really important, every client will have, will be growing the amount of suppliers that they have.
• 28:14
  SPEAKER_02: It's not a number that decreases, it increases over time.
• 28:17
  SPEAKER_02: So what we're also doing is providing someone in procurement or whoever manages that process with some assistance to say, look, as you onboard them, part of that, whether it's an RFP that you're doing, or if it's these are the rules of engagement, this is how we're going to accept payment.
• 28:33
  SPEAKER_02: This is our preferred method of payment.
• 28:35
  SPEAKER_02: As a preferred supplier, we'd like you to pay this way.
• 28:38
  SPEAKER_02: And that sets the expectation that as you grow your supplier base, then you'll continue to grow your card acceptance base.
• 28:47
  SPEAKER_02: One other point that is vitally important is that what we've done here is we've developed a global vendor database.
• 28:54
  SPEAKER_02: And within that database, it allows us to, as we match, and Brian mentioned the tools that we have with MasterCard to complement that.
• 29:02
  SPEAKER_02: It's the ability to take that vendor file, match it against MasterCard, but also match it against our database, which is truly real.
• 29:10
  SPEAKER_02: Not whether it could be false positives or false negatives, but this is exactly yes or no, or if it's conditional, here are the conditions.
• 29:20
  SPEAKER_02: So we have your PSOPs, for lack of a better explanation, your payment standard operating procedures.
• 29:25
  SPEAKER_02: And we had that listed within the database.
• 29:27
  SPEAKER_02: We can say this supplier accepts vital, you know, via a portal, and we have their credentials on file.
• 29:34
  SPEAKER_02: So they provide that to us, and then we actually will log on and facilitate that payment.
• 29:39
  SPEAKER_02: So our concierge approach not only holds that data so that we can facilitate that payment, but it allows us to continue to grow that acceptance rate up.
• 29:48
  SPEAKER_01: Okay.
• 29:49
  SPEAKER_01: So this is obviously an exciting, unique product and a great industry to be in.
• 29:54
  SPEAKER_01: So, Brian, as you look ahead, say over the next 12 to 24 months, what do you think are some of the biggest opportunities for one journey?
• 30:02
  SPEAKER_01: What are you excited about building and what should we expect to see from the company moving forward?
• 30:06
  SPEAKER_03: Yeah, yeah, great question.
• 30:08
  SPEAKER_03: And actually, we're in that planning mode and development mode for something that I think is going to be extraordinary for hotels.
• 30:16
  SPEAKER_03: No one's done it before.
• 30:17
  SPEAKER_03: It's using the same rails that we've developed for B2B with paying suppliers.
• 30:24
  SPEAKER_03: However, it has a consumer component on the prepaid side.
• 30:29
  SPEAKER_03: And as you probably can guess, and if hoteliers are listening to this, of course, they get it.
• 30:35
  SPEAKER_03: So their cartable spend, maybe 2 million, 3 million, 1 million, 5 million, depends on the size of the property.
• 30:42
  SPEAKER_03: But you look at that same 100-room hotel, they're probably pulling in about 15 to 20 million in revenue that's going through, you know, the likes of the OTAs, and they're paying an exhaustive amount of money in commissions.
• 30:56
  SPEAKER_03: So one of the things that we're already, like I said, it's a Q1, there's going to be a Q1 launch of this soft launch with X number of hotels, but our B2B payments, it's under our product brand called SwiftPay, and that's what we call money out.
• 31:10
  SPEAKER_03: Money out meaning you're paying out to suppliers and contractors and so on and so forth.
• 31:15
  SPEAKER_03: And this, what I'm talking about, is a loyalty program.
• 31:18
  SPEAKER_03: It's called Hotel Direct.
• 31:20
  SPEAKER_03: I won't give a lot on this call because as we go forward, I'll tell you more about it.
• 31:24
  SPEAKER_03: It's powered by MasterCard.
• 31:25
  SPEAKER_03: And the whole plan here, we call this money in, is to give the ability for independent hotels in the United States and around the world to do what the big brands like Marriott and Hyatt and IHG do by promoting a credit card.
• 31:40
  SPEAKER_03: This is not a credit card, of course, but it's a prepaid card that has a lot of benefits in it.
• 31:45
  SPEAKER_03: Benefits such as cash back for the guests, benefits as in discount immediately when they're making the booking, and more value that the hotels can throw, because if the hotels themselves don't try to get into the fintech space, what's happening right now is that all the companies that basically do bookings at large volume, all the online travel agencies and all the big brands, they're all playing in the fintech space today.
• 32:11
  SPEAKER_03: And these smaller properties, and I say 85% of the world's hotels are independent hotels, not with a major brand on them.
• 32:19
  SPEAKER_03: And they're not going to be backed by any bank.
• 32:21
  SPEAKER_03: They're not going to be backed by any network.
• 32:24
  SPEAKER_03: So we found a really great opportunity to help convert that business that would have gone to the OTAs or maybe even go to a branded hotel to get that business to convert and increase the conversion on the hotel's website.
• 32:38
  SPEAKER_03: So for us, that's quite unique, but more exciting because it's helping us drive the money out adoption.
• 32:45
  SPEAKER_03: Because what we're saying is, do you want to get in on money in?
• 32:48
  SPEAKER_03: And hotels are already giving us a pre-sale saying we'd love to get onto money in.
• 32:53
  SPEAKER_03: Well, if you want to get in the queue, this is it.
• 32:55
  SPEAKER_03: Start using money out.
• 32:57
  SPEAKER_03: It's the same Rails until we're ready and we'll start previewing it.
• 33:01
  SPEAKER_03: So this is what we're excited about for late Q1.
• 33:04
  SPEAKER_03: But money out is operational right now.
• 33:06
  SPEAKER_03: So if they get in and they start getting the adoption, it's the same platform and the same console and dot dashboard that they will be managing their money in.
• 33:14
  SPEAKER_03: So they'll be prepared and ready to be able to take on the ability to compete for that business, having a fintech component on their side.
• 33:23
  SPEAKER_01: John, anything you'd like to add about the future of the company?
• 33:26
  SPEAKER_02: It's very exciting.
• 33:27
  SPEAKER_02: What we have is something that does not exist today in commercial payments, period, with a combination of both solutions.
• 33:34
  SPEAKER_02: So it creates an additional revenue stream.
• 33:37
  SPEAKER_02: So when you look at this, you have the revenue stream that comes from the payout version that Brian indicated, the revenue stream that comes from the pay in.
• 33:44
  SPEAKER_02: And then combining those, parties who are participating, whether it's sponsor banks or the network I.e.
• 33:51
  SPEAKER_02: MasterCard, now has a revenue stream that did not exist previously that now does.
• 33:56
  SPEAKER_02: So we have a lot of parties that are very excited about this because it impacts everyone extremely favorably.
• 34:04
  SPEAKER_02: So as we go to market, we could lead in.
• 34:06
  SPEAKER_02: Here's an example, it's pay in, and the hotel will be beside themselves to participate.
• 34:11
  SPEAKER_02: And so the question is great.
• 34:13
  SPEAKER_02: You know, we bundle both solutions together.
• 34:15
  SPEAKER_02: You know, one complements the other, and there's unique benefits to both.
• 34:19
  SPEAKER_02: So what we're seeing, it's a mass adoption of all solutions.
• 34:23
  SPEAKER_02: So it's not just getting one to go to the other.
• 34:26
  SPEAKER_02: We're it's an onboarding of both that we're we're really excited about because what it allows us to do is slingshot, you know, from where we are today to you know where we hope to be.
• 34:36
  SPEAKER_02: But something that's sustainable, you know, you can commoditize anything.
• 34:40
  SPEAKER_02: But where the true value of a product, it goes back to what you said at the very beginning, Greg, is when you solve a problem.
• 34:47
  SPEAKER_02: And what this does is not just solving one, we're solving multiple problems.
• 34:52
  SPEAKER_03: Yeah, and that just to you know put a book in on that, basically we think that our strategic target of partnerships in the hospitality industry is primarily around the property management system.
• 35:05
  SPEAKER_03: A lot of them don't have a handle on payments, they have a handle on what they're doing just to help the hotel's operation.
• 35:11
  SPEAKER_03: They work with a lot of third-party payment companies, but on the acquiring side.
• 35:15
  SPEAKER_03: But clearly, card issuing is not a thing today.
• 35:18
  SPEAKER_03: So, what we believe is that our focus, and we've actually signed a property management system already, and we have a few in the pipeline where we become sort of that embedded payment side to that business so that they could offer their customers that they're working with today or new customers the ability to offer end-to-end payments because this is where it's heading.
• 35:37
  SPEAKER_03: And matter of fact, I spoke to a hotel year recently, and he said all he's hearing about now in the industry is payments, payments, payments, payments.
• 35:44
  SPEAKER_03: And he's like, that's why I took your call because one, you're a hotelier, but two, I won't understand what's going on.
• 35:50
  SPEAKER_03: So there's a part of this is education, but I do believe that the property management systems are a key part to the solution and the adoption because they're already there working with the hotels on the ground, localized and globalized, as an example.
• 36:04
  unknown: Okay.
• 36:04
  SPEAKER_01: So, Brian, let's close out and just have you give us just a brief summary of the episode.
• 36:10
  SPEAKER_01: If there's like one or two things you'd want the audience to take away from the last 40 minutes, just what would those be, and then we'll wrap up the show.
• 36:17
  SPEAKER_03: Sure.
• 36:17
  SPEAKER_03: So I think these are some of the key things here.
• 36:20
  SPEAKER_03: Clearly, I would like hoteliers or the audience specifically, if I can address hoteliers, I'd like hoteliers to understand that the payments that they're making today, they can turn into a profit center.
• 36:31
  SPEAKER_03: They don't need to be a cost center.
• 36:33
  SPEAKER_03: And don't be afraid of change.
• 36:35
  SPEAKER_03: I've worked at the desk, I've worked in different departments.
• 36:37
  SPEAKER_03: It's very difficult to make things change in a hotel quickly.
• 36:41
  SPEAKER_03: But if the right people on the other side working with you that understands the problems and the challenges that you have, we can hold your hand for this issue, to the problems that you're having and help you become into this digitized world more efficient, more effective in your payments, as an example, and being able to track everything.
• 37:00
  SPEAKER_03: So that's one thing.
• 37:01
  SPEAKER_03: The other thing is that if your property management system today is not working in payments, feel free to give them a shout and send them over our way.
• 37:10
  SPEAKER_03: Andor if property management systems are listening to us today, I think this is a great opportunity for us to engage with you because PMSs or property management systems are the right solution providers to talk to these hotels because the hotels listen to their PMS providers.
• 37:27
  SPEAKER_03: So I think from these two perspectives and the education standpoint, is that don't just think about maybe adopting to the solution today.
• 37:34
  SPEAKER_03: Maybe part of what you want to take away from this is to learn more about the solution.
• 37:39
  SPEAKER_03: So we want to kind of open this up for you.
• 37:42
  SPEAKER_03: Come to our website, one-journey.com, come in there, set up an appointment, I'll get on the call with you myself and actually walk you through so you get more of an education around payments, right?
• 37:53
  SPEAKER_03: Because this will be your first step.
• 37:55
  SPEAKER_03: Think about it like uh baby's first tricycle, right?
• 37:58
  SPEAKER_03: And you're just your first time, you know, Fisher Price, and you're going to have your first tricycle.
• 38:04
  SPEAKER_03: We are there to help you with that.
• 38:05
  SPEAKER_03: We're like the training wheels, right?
• 38:07
  SPEAKER_03: And we'll get you on, but just know you can have a trusted partner working with companies in the network like MasterCard behind us and the banks, and we'll be there for you to get you to the next level.
• 38:17
  SPEAKER_01: Okay.
• 38:17
  SPEAKER_01: Well, Brian, John, thank you both so much for being on the show today.
• 38:21
  SPEAKER_01: I know your time is very valuable.
• 38:23
  SPEAKER_01: So I really appreciate you being here.
• 38:24
  SPEAKER_01: So thank you so much.
• 38:25
  SPEAKER_01: Thank you so much, Greg.
• 38:26
  SPEAKER_01: Thank you.
• 38:26
  SPEAKER_01: Thank you, Greg.
• 38:27
  SPEAKER_01: Appreciate it.
• 38:28
  SPEAKER_01: And to all you listeners out there, I thank you for your time as well.
• 38:30
  SPEAKER_01: And until the next story.
• 38:33
  SPEAKER_00: Thank you for joining us this week on the Leaders in Payments Podcast.
• 38:36
  SPEAKER_00: Make sure you visit our website at leadersinpayments.com, where you can subscribe to the show and where you'll find our show notes.
• 38:44
  SPEAKER_00: If you enjoyed listening, please share on your social channels as well.