Latest / Leaders In Payments / Pat Napoli, CEO and Partner at Appressa | Episode 350

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Pat Napoli, CEO and Partner at Appressa | Episode 350 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: 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 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Greg Myers: Hello everyone and welcome to the Leaders in Payments podcast.
• 0:21
  Greg Myers: I'm your host, greg Myers, and today's special guest is Pat Napoli at Oppressa.
• 0:26
  Greg Myers: So, pat, thank you so much for being here and welcome to the show.
• 0:30
  Greg Myers: It's a pleasure.
• 0:31
  Pat Napoli: Thanks for having me.
• 0:32
  Greg Myers: Absolutely.
• 0:32
  Greg Myers: So let's dive right in, if you don't mind.
• 0:35
  Greg Myers: Tell our audience a little bit about yourself, maybe where you're from, where you grew up, where you went to school, a few things like that.
• 0:41
  Pat Napoli: Great.
• 0:41
  Pat Napoli: So I'm born and bred in New Jersey.
• 0:44
  Pat Napoli: I went to school in New England, was a high school teacher for a couple of years at my alma mater, st Benedict's Prep in North New Jersey Shout out to St Benedict's Prep.
• 0:54
  Pat Napoli: I taught history and algebra, coached a bunch of sports.
• 0:56
  Pat Napoli: Then I went back to school and I started my career at MB&A.
• 0:59
  Pat Napoli: So I moved a bunch with MB&A.
• 1:01
  Pat Napoli: My family and I moved.
• 1:02
  Pat Napoli: We were in Baltimore, madrid, spain, wilmington on a couple different occasions.
• 1:07
  Pat Napoli: So we've actually settled back in New Jersey.
• 1:10
  Pat Napoli: So I'm talking to you from the Jersey Shore today.
• 1:11
  Greg Myers: Okay, great Well, let's talk about the company Oppressa, so tell the audience what Oppressa does.
• 1:16
  Greg Myers: So Oppressa is simply put Oppressa is a network.
• 1:20
  Pat Napoli: Our goal and my partner.
• 1:22
  Pat Napoli: Chris Mettler and I when we first started talking about this idea we really talked about inclusivity, and Oppressa takes the clients from prime banks we're focused on credit cards now, but this is good for all products Takes a credit card client from prime banks and routes them to.
• 1:38
  Pat Napoli: When we met with the CFPB, they called them adult, supervised, near prime and sub prime banks.
• 1:43
  Pat Napoli: So there's a handful in the States and we're really focused on helping people improve their credit.
• 1:49
  Pat Napoli: It's about inclusivity and, if you look at the numbers, it's an important mission that we believe we're on, not just because you know, listen, when I finished school I was subprime, but really because there's almost 145 million Americans with a near prime or subprime credit score and last year there were 70 million credit card declines.
• 2:07
  Pat Napoli: So we think our network can help people, when they're declined by a prime bank, find a place to rehab their credit and get back into the credit cycle.
• 2:15
  Greg Myers: Okay, so let's play the scenario I'm a consumer, I go to a bank website, I apply for a credit card and I'm declined.
• 2:24
  Greg Myers: So today that might be the end of your journey.
• 2:26
  Greg Myers: Right, it is, it is.
• 2:28
  Greg Myers: And so you're saying you guys have now built rails where you can take that individual and give them other offers by routing their information to these other banks.
• 2:37
  Pat Napoli: Correct.
• 2:37
  Pat Napoli: So either a proprietary or a co-brand credit card.
• 2:40
  Pat Napoli: So you're applying at Bank A and Bank A, which is a prime bank, probably located in Delaware, today probably you get an adverse action letter.
• 2:50
  Pat Napoli: Tomorrow, appressa is able to, with our strategic partnership with Prove we can talk about that later send your information to a near prime subprime bank there's only a handful and they can prequal you and get you a card that helps you rehab your credit.
• 3:04
  Pat Napoli: And look, in today's world, approval rates are not going up.
• 3:11
  Pat Napoli: They've dropped pretty significantly in the last 18 months.
• 3:12
  Pat Napoli: So we really feel like the time has come for Oppressa to help people get back and get something to help them rehab their credit score, because today, if you're a client for a credit card application, your FICO score goes down, which is a double whammy You're a client and your FICO goes down.
• 3:26
  Greg Myers: Okay, so where's the company sort of on the development?
• 3:29
  Greg Myers: Are the rails built or in development?
• 3:31
  Greg Myers: Kind of give us an update there.
• 3:32
  Pat Napoli: Yeah.
• 3:32
  Pat Napoli: So my partner, chris Mettler, who's I mean, he's a serial entrepreneur.
• 3:36
  Pat Napoli: He's had two successful exits so far.
• 3:39
  Pat Napoli: He owns five or six affiliates or aggregators, whatever language people kind of use.
• 3:42
  Pat Napoli: So CompareCredit RateQuote, businessloanscom.
• 3:46
  Pat Napoli: Chris and I have pretty much built the tech.
• 3:48
  Pat Napoli: It's 80% complete.
• 3:50
  Pat Napoli: We've spent a lot of time networking, socializing with the near prime subprime banks and with the prime banks and also with the co-brands and the network.
• 4:00
  Pat Napoli: So we're out there and a lot of people have really gotten their heads around.
• 4:04
  Pat Napoli: Hey, let's do this.
• 4:05
  Pat Napoli: We've actually we're pretty close.
• 4:07
  Pat Napoli: We think we're going to have at least two prime banks signed this year and we think we'll be in market probably first quarter with applications actually flowing down to subprime banks.
• 4:16
  Speaker 1: So there's only a few right.
• 4:18
  Pat Napoli: You have Concora, atlanticus, mercury, avant and, where I used to work, credit Long, which is by far the biggest near-prime subprime bank in the US.
• 4:25
  Pat Napoli: They're definitely the largest and they've been at it the longest and you know.
• 4:29
  Pat Napoli: All these banks, as I said before, are well-run, highly regulated.
• 4:38
  Greg Myers: And it's really a great place for people to rehab their credit.
• 4:39
  Greg Myers: Okay, and you mentioned Proof, so maybe talk about that partnership.
• 4:41
  Pat Napoli: Yeah, so it really is.
• 4:43
  Pat Napoli: Proof's an amazing, amazing company.
• 4:45
  Pat Napoli: They are the leaders in identity verification for the credit card industry.
• 4:51
  Speaker 1: I'll just talk about their US business, although they are international.
• 4:54
  Pat Napoli: What they're able to do is improve the onboarding for a customer by almost 80%.
• 4:59
  Pat Napoli: So they really speed that up and they have a large group of data sources where they're able to verify information for a customer, make it easier to onboard the customer as well as reduce fraud on the back end.
• 5:08
  Pat Napoli: So we have a strategic partnership with Prove.
• 5:10
  Pat Napoli: Where they're able to, because they're connected to nine of the top 10 US banks.
• 5:15
  Pat Napoli: Where they're able to, because they're connected to nine of the top 10 US banks, they're able to help us kind of improve and increase and speed up our connection to these prime banks.
• 5:24
  Pat Napoli: Where the prime bank is like, oh gosh, I have to develop this whole new system.
• 5:26
  Pat Napoli: We work with Proof to do that and it really is a win-win for all parties.
• 5:30
  Pat Napoli: So the tech lift, which used to be a big challenge, has almost gone away for the prime banks and that really has been a large hurdle we've kind of really kind of jumped over with Proof.
• 5:39
  Pat Napoli: The regulatory environment has changed in the US and the CFPB published Rule 1033, which doesn't necessarily say second look, but it really incents people to drive inclusivity in the US and that's what really kind of our connection to Proof is helping us do, where you say, hey, we're really helping people be banks, be more inclusive, and the tech lift isn't hard, so it really is a win-win.
• 6:03
  Pat Napoli: Now it's funny we've kind of built a better mousetrap with Proof to do this, but really, second Look was around in the late 90s.
• 6:09
  Pat Napoli: I mean, hsbc did this with a bunch of Wilmington banks back in the late 90s, so this is not a new concept.
• 6:15
  Pat Napoli: It's definitely a precedent for Second Look.
• 6:17
  Pat Napoli: We've just really kind of make it a little bit more slick in the execution of it.
• 6:21
  Greg Myers: Okay, and so is it all digital, or can it be done in a branch or kind of talk through that Great question.
• 6:27
  Pat Napoli: So when you're applying, you're going to enter in a similar piece of information, depending on the bank.
• 6:32
  Pat Napoli: So first name, last name, you can enter in social cell phone a bunch of different kind of things you would enter in, and as long as it's entered into the application system of a prime bank, we're good to go.
• 6:43
  Pat Napoli: So any channel works.
• 6:46
  Pat Napoli: You know, if you think about co-brand, they have purchase path onboard in-store we're able to take all those applications and route them to a subprime bank for consideration, and we really think we'll be able to get a lot more people approved, because in today's regulatory and kind of credit environment, prime banks can't go that well.
• 7:04
  Pat Napoli: They're just not able to do it and the near prime subprime banks really, because of focus this is what they do and that's why they're successful they're able to go down into the fives of a FICO score, which is pretty significant and allows more people to kind of get credit and help them kind of move the ball forward on their personal journey.
• 7:20
  Greg Myers: Okay, and you mentioned international, but today you're just focused on the US, I assume.
• 7:25
  Pat Napoli: We are so.
• 7:26
  Pat Napoli: In a prior life I was chief operating officer of MBNA Spain, so this really works in a deep credit bureau environment which is the US and some Western European countries.
• 7:37
  Pat Napoli: Now Proove is very, very big in Brazil, which makes a lot of sense.
• 7:41
  Pat Napoli: That could be someplace we could go kind of moving forward.
• 7:44
  Pat Napoli: But really we're only focused on the US today.
• 7:46
  Pat Napoli: Fingers crossed, we'll be in other places sometime soon, okay, okay.
• 7:50
  Greg Myers: So I always ask a question about competition, but it doesn't seem like you have a big competitor.
• 7:56
  Greg Myers: Maybe the competition is there isn't another path right?
• 7:59
  Greg Myers: So I mean, how do you view competition and what you're?
• 8:02
  Pat Napoli: doing.
• 8:02
  Pat Napoli: Yeah, you know it's funny, we really view so there's some experience in the BNPL space that do this today.
• 8:08
  Pat Napoli: But it's a little bit different order.
• 8:09
  Pat Napoli: Some people have said, hey, you know, some of the synthetic lenders would be competitors.
• 8:13
  Pat Napoli: We don't view it as such.
• 8:14
  Pat Napoli: We view the market as so big that we will work with synthetic lenders.
• 8:18
  Pat Napoli: We'll work with whomever.
• 8:19
  Pat Napoli: We don't pick winners.
• 8:20
  Pat Napoli: We're a network.
• 8:21
  Pat Napoli: We route applications.
• 8:22
  Pat Napoli: We want to do the best for the customer and it's funny.
• 8:26
  Speaker 1: Somebody asked me hey, you're making the pie bigger.
• 8:28
  Pat Napoli: We're actually not making the pie bigger, we're making a different pie.
• 8:31
  Pat Napoli: So this really allows for a whole different way for co-brands, businesses, retail airlines to look at the market and allow more customers to be included in their loyalty platform.
• 8:41
  Greg Myers: Okay, Is there an opportunity or a play here for maybe smaller banks, community banks, credit unions even?
• 8:48
  Greg Myers: They're always looking for new, innovative ways to get more customers and keep the customers they have.
• 8:54
  Greg Myers: Is there any opportunity there, do you think?
• 8:56
  Pat Napoli: Yeah, greg, that's a great question.
• 8:57
  Pat Napoli: The answer is absolutely yes.
• 8:58
  Pat Napoli: We truly believe.
• 9:05
  Pat Napoli: If you're a smaller bank, it's hard to lend to these customers, right?
• 9:06
  Pat Napoli: If you're somebody with a 570 credit score, you're kind of like, wow, this is a tough one to do.
• 9:09
  Pat Napoli: Our position is give it to the experts.
• 9:11
  Pat Napoli: And if you're working at Credit One, you are solely focused on near prime subprime credit card coverage.
• 9:17
  Pat Napoli: They don't have 57 products, right, they're not doing auto loans and all this kind of stuff.
• 9:21
  Pat Napoli: And they win because they're focused and that's where it really helps the customer.
• 9:27
  Pat Napoli: And today, if you're a smaller issuer and you're putting that customer's application in the garbage.
• 9:31
  Pat Napoli: That's not good for anybody.
• 9:32
  Pat Napoli: Our position is give it to the experts, let that person rehab their credit and in 18 months, two years, guess what?
• 9:38
  Speaker 1: Their FICO will be back over 700 and you'll be able to issue them their own credit card.
• 9:42
  Pat Napoli: So it really is a matter of and I believe this it's focus and allowing people to do what they do best, and that's kind of how we believe we see the market.
• 9:50
  Greg Myers: Okay.
• 9:50
  Greg Myers: So I always ask about sort of the future of the industry.
• 9:54
  Greg Myers: So maybe with the lens of what you're doing, what is the future?
• 9:57
  Greg Myers: Where do you see this in?
• 9:58
  Greg Myers: Maybe two to three years?
• 9:59
  Pat Napoli: We're hoping to be integrated with a significant number of the prime banks in the US and routing applications to near prime and subprime lenders and taking a good chunk of those 70 million declines last year and giving them something to help them rebuild their credit.
• 10:15
  Pat Napoli: We started this business.
• 10:16
  Speaker 1: I used to work at MB&A and over every door was think of yourself as a customer.
• 10:20
  Pat Napoli: So Chris and I started with that premise and we're saying how do we help people and how do we ensure that people are on the right path and staying away from predatory lenders?
• 10:33
  Speaker 1: So our goal is to get as many people back into the credit cycle rehabbing their credit and allow them to rehab their credit to a point where they can get a credit card.
• 10:38
  Pat Napoli: They can get a car loan and really drive a much more inclusive environment.
• 10:43
  Pat Napoli: The numbers are huge.
• 10:46
  Pat Napoli: When you talk about almost 150 million Americans have a non-prime credit score.
• 10:50
  Pat Napoli: There's a need there and the market is significant.
• 10:53
  Greg Myers: Right?
• 10:53
  Greg Myers: Well, let's switch gears a little bit and talk about you.
• 10:56
  Greg Myers: So maybe tell us about your journey You've mentioned a few times different companies you've worked at but maybe kind of lead us through your career and how you got to where you are today.
• 11:03
  Greg Myers: So again as a high school teacher.
• 11:05
  Pat Napoli: So it's easy transition right as an assistant wrestling coach.
• 11:08
  Pat Napoli: You go right into MB&A.
• 11:09
  Pat Napoli: So I started at MB&A and it was a fantastic experience.
• 11:13
  Pat Napoli: I had a bunch of different marketing jobs and my last stint at MB&A happened right when Bank of America purchased MB&A.
• 11:19
  Pat Napoli: So I was an expat.
• 11:20
  Pat Napoli: I ran marketing.
• 11:21
  Pat Napoli: Then I was chief operating officer of MB&A Spain.
• 11:23
  Pat Napoli: We lived in Madrid my wife and I actually still have an apartment in Madrid so we spent a good chunk of time there.
• 11:30
  Pat Napoli: And then I went to Barclays for a bit.
• 11:31
  Pat Napoli: I had a consulting firm and I ran into Sherman Financial Group and Credit One Bank and I worked there for almost a decade.
• 11:38
  Pat Napoli: So it was a great place to work.
• 11:40
  Pat Napoli: I really enjoyed it.
• 11:41
  Pat Napoli: Mb&a and Credit One were very, very similar in terms of their corporate culture, the focus they had.
• 11:46
  Pat Napoli: I'm still very close to a lot of people at Credit One.
• 11:49
  Pat Napoli: It was a fantastic place to work and a couple of years ago I retired and took some time off.
• 11:54
  Pat Napoli: That commute from Madrid to Las Vegas would have been really tough, so my wife, and I are empty nesters and I took some time off and I met Chris Mettler and we really just hit it off and we're kind of kicking around a bunch of different ideas.
• 12:07
  Pat Napoli: And Chris had this idea for building a network to take a lot of the clients from his existing business you know, compare credit.
• 12:14
  Pat Napoli: He was really struggling with the proofreads.
• 12:15
  Pat Napoli: He said, hey, I'm spending all this money and I'm not getting approvals.
• 12:17
  Pat Napoli: Hey, how do we do this?
• 12:18
  Pat Napoli: So I had worked on the American Express Credit One deal where Amex the clients are routed to Credit One, and today it's in the market.
• 12:27
  Pat Napoli: You know we kind of kicked it around and said, hey, maybe this is something we'd figure out.
• 12:30
  Pat Napoli: So we've been and building the tech, building the team.
• 12:34
  Pat Napoli: We have a bunch of engineers working on it and this is a really tech-heavy business.
• 12:37
  Pat Napoli: So I'm Mr Outside and Chris is Mr Inside.
• 12:41
  Pat Napoli: My career has taken a bunch of turns.
• 12:43
  Pat Napoli: I've been in marketing, been in operations, did a bunch of business, devs things.
• 12:47
  Pat Napoli: So it feels like this is the right time for the business and it feels like it's the right time for the market and we're super excited about the business and hopefully we can help people along the way, Okay okay, so what are some things you're passionate about?
• 13:01
  Greg Myers: Maybe one work-related passion and one personal passion.
• 13:04
  Pat Napoli: Yeah, it's funny, work-related.
• 13:06
  Pat Napoli: I think I'm pretty good at solving problems.
• 13:08
  Pat Napoli: I like kind of taking something that was broke and fixing it.
• 13:11
  Pat Napoli: I thoroughly enjoyed, you know, when I was chief operating officer of MB&A Spain, because you know you have a bunch of different areas and there was always something, there was always a fire to put out, so I really liked kind of juggling a bunch of different balls in the office and figuring out, hey, customer service is doing great today, but collections, we got some issues and how to figure that out.
• 13:33
  Pat Napoli: So I really enjoy kind of having multiple things going on at once.
• 13:35
  Pat Napoli: You know a bunch of spinning plates.
• 13:40
  Pat Napoli: And personally I mentioned before I was a high school teacher.
• 13:41
  Pat Napoli: I'm actually on the board of trustees of my high school.
• 13:42
  Pat Napoli: So it's an inner city boys Catholic school in the middle of Newark, new Jersey.
• 13:44
  Pat Napoli: It's a wonderful place.
• 13:45
  Pat Napoli: We actually just started two years ago with a girls division and inner city education is something that I think we really got to figure out in the US and I like to think that St Benedict's is a model for that and we figured out how to really educate young people of Newark and drive them towards success.
• 14:03
  Pat Napoli: And it's a crazy place.
• 14:04
  Pat Napoli: It's a really fun place.
• 14:05
  Pat Napoli: We got to raise 60 cents at every dollar to open the doors, but it's a really exciting place and it gets kind of my creative juices and we put a lot of energy.
• 14:13
  Pat Napoli: My family and I put a lot of energy behind helping the young people of Newark in that setting.
• 14:19
  Pat Napoli: So it's exciting.
• 14:20
  Pat Napoli: We really we thoroughly enjoy it and it's something that I don't play golf anymore, but we put a lot of time and energy behind St Benedict's Prep.
• 14:26
  Greg Myers: Yeah, that's awesome, that's a great passion.
• 14:28
  Greg Myers: So if someone came to you obviously you've had a long career in financial services, now you're kind of at the intersection of that and what we might call fintech and payments and just curious, if someone came to you and said, pat, hey, I'm interested in building a career in this space that you're in, and they're maybe right out of school and they're like, hey, this looks like a great opportunity, a great business, to be in a great market, to stay in the whole payments and fintech space, what would you tell them they need to do to be successful?
• 14:57
  Pat Napoli: It's a great question.
• 14:58
  Pat Napoli: I really think, with AI and with speed and the velocity of change in lending, I would lean towards data science.
• 15:07
  Pat Napoli: I think it's incredibly important.
• 15:09
  Pat Napoli: Numbers are numbers.
• 15:11
  Pat Napoli: If you can do the math, you're going to be valuable in any organization and I think we're going to be more and more interested in that and it's more and more important.
• 15:20
  Pat Napoli: So, taking any classes, they can make you more analytical and successful.
• 15:25
  Pat Napoli: And you know it's funny, early in my career I kind of went wide with my experiences.
• 15:29
  Pat Napoli: That helped me down the road.
• 15:31
  Pat Napoli: But you know, I see more and more people kind of leaning in and going deep in one area versus wide, and I kind of think that's where the market's moving.
• 15:39
  Pat Napoli: Having a jack of all trades, I feel like, is becoming a little bit less important.
• 15:42
  Pat Napoli: You've got to understand the business from soup to nuts.
• 15:45
  Pat Napoli: I get that and understanding, hey, the implications of customer service versus collections, versus an entire cycle.
• 15:51
  Pat Napoli: But you know, I would say leaning in towards taking as many courses and being analytical and coding and understanding the implications of AI is critically important for any young person.
• 15:59
  Pat Napoli: I mean frankly, that's what I tell my kids.
• 16:01
  Pat Napoli: I have kids who are in their young 20s.
• 16:03
  Pat Napoli: So that's advice I've readily given out recently All right makes total sense.
• 16:08
  Greg Myers: Well, we're going to wrap up here in a second, but before we do, I want to make sure you let the audience know where they can learn more about Oppressa and more about you.
• 16:17
  Greg Myers: So where would they be able to do that?
• 16:18
  Greg Myers: So?
• 16:19
  Pat Napoli: our website is oppressaco.
• 16:21
  Pat Napoli: There's no M in there A-P-P-R-S-S-S-A.
• 16:23
  Pat Napoli: My email is pretty simple.
• 16:26
  Pat Napoli: It's patmapley at oppressaco.
• 16:28
  Pat Napoli: We are open for business.
• 16:29
  Pat Napoli: We're super excited and we've been networking pretty well in the market, but we'd love to see if we can help people.
• 16:34
  Pat Napoli: Chris Mettler and I are super open to figuring out creative ways to use technology to be more efficient and with his breadth of businesses he's in insurance, he's in business lending we really feel like we can help folks find a creative, healthy, helpful solution for their business or their personal needs.
• 16:54
  Pat Napoli: And it's an exciting time.
• 16:55
  Pat Napoli: Greg, I want to thank you for this opportunity, Chris and I talked about it last night.
• 16:59
  Pat Napoli: You know we're super excited about your business and being the 351st podcast was super exciting for us.
• 17:06
  Pat Napoli: I just really wanted to say thank you to you.
• 17:08
  Greg Myers: Yeah, absolutely no.
• 17:09
  Greg Myers: I appreciate you being on.
• 17:10
  Greg Myers: Well, before we hit, stop here.
• 17:12
  Greg Myers: Is there anything else you'd like to add?
• 17:14
  Greg Myers: Before we go ahead and wrap up, I just want to say thank you very much.
• 17:17
  Pat Napoli: We're excited.
• 17:18
  Pat Napoli: We think we're going to have some really positive news over the next quarter of business in terms of signing prime banks, and really that's where the volume is and we think kind of hopefully that first prime bank will push the dominoes over for this business and we can get rolling.
• 17:33
  Pat Napoli: And a lot of co-brands rely a lot on their loyalty programs and we really feel like that's where the market's going to be made first and we're just hopeful and really excited about this opportunity moving forward.
• 17:45
  Pat Napoli: Great, great.
• 17:46
  Greg Myers: Well, Pat, thank you so much for being on the show today.
• 17:48
  Greg Myers: I know your time's very valuable, so I really appreciate you being here.
• 17:51
  Pat Napoli: Thanks, ray, have a great day.
• 17:52
  Greg Myers: You too, and to all you listeners out there.
• 17:54
  Greg Myers: I thank you for your time as well, and until the next story.
• 17:59
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 18:00
  Speaker 1: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 18:08
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