Latest / The Payments Shed / Ep. 61 - Orchestration Explained — What It Is, What It Isn’t, and What Actually Works - with PayModum

Transcript

Ep. 61 - Orchestration Explained — What It Is, What It Isn’t, and What Actually Works - with PayModum · The Payments Shed

• 0:00
  Welcome to the Payment Shed Podcast, the weekly podcast that
• 0:03
  dives into the big topics, trends and people shaping the
• 0:06
  world's of payments, fintech and business.
• 0:08
  Leadership of your two Co hosts, myself, Grant Evans and Justin
• 0:12
  Hanna. Welcome back to the Payment Shed
• 0:14
  podcast. Riding solo today with Justin's
• 0:17
  children sadly being struck down by chicken pox, but I'm
• 0:20
  delighted to be joined by Jake Dovey, CEO of Pay Modem.
• 0:24
  Jake, welcome to the show. Nice to meet you and thank you
• 0:26
  for having me on. Thanks for joining us today.
• 0:29
  Now we're going to talk about yourself, the business.
• 0:32
  So I'll just get a little bit of the background from every guest
• 0:34
  first in terms of how you ended up in the payments in fintech
• 0:37
  industry. Yeah, absolutely.
• 0:40
  I started my journey in deliverable effects 13 years ago
• 0:45
  for a company called Baden Hill, before fintech was ever kind of
• 0:50
  a buzzword or a thing. That company got acquired
• 0:53
  shortly after I joined by a company called Earth Port which
• 0:57
  had like a hub and spoke sort. Of Amanda.
• 0:59
  Is Amanda there? Absolutely.
• 1:01
  OK. Yeah, payments, right.
• 1:05
  I was in. Cash flows when she went into
• 1:07
  cash flows. So there you go.
• 1:08
  Yeah. Cranky cash flows, I know a lot
• 1:11
  of them. We had two or three from cash
• 1:13
  flows I believe over there who joined us over the years.
• 1:15
  Yes, yeah. Visible Earth.
• 1:17
  Poor, right? Visible Earth poor 2019, I think
• 1:23
  it was a defensive play versus MasterCard acquisition of trying
• 1:29
  to remember it. Now it's sort of like a an
• 1:31
  orange logo. They're doing doing something
• 1:33
  very similar to us at the time sort of disbursements payouts.
• 1:39
  They were sort of going more for the challenger bank where we had
• 1:44
  sort of more of what I would describe as sort of legacy sort
• 1:49
  of players. And then we'd been able to catch
• 1:52
  a couple of the early stage fintech.
• 1:55
  So wise back in the day pay in there, some of the sort of big
• 2:00
  names now today. But yeah, we, so we got pretty
• 2:04
  lucky there. And yeah, no secrets.
• 2:07
  There was quite a bit of of the online gambling transactions of
• 2:10
  business. Everyone's origin story, right?
• 2:15
  Yeah, suddenly paid everyone's salary, I know that much.
• 2:18
  But yeah, no wonderful time. So I left there 2018 after 4 1/2
• 2:25
  years, had a short stint at Trustley.
• 2:29
  So Trustley back then incredibly popular, it was sort of swish
• 2:34
  was there, but it, it was really just peer-to-peer and it wasn't
• 2:39
  really recognised at checkout at that stage.
• 2:43
  So trustee really was the lion's share of the the checkout or the
• 2:47
  cashier back then? The original a 2A players as
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  well, right? Absolutely.
• 2:53
  So yeah, quite a quite a a great story that that they have over
• 2:59
  there as well. And yeah, then spend some time
• 3:04
  on my acquiring experience what was safe charge that's now Nevae
• 3:08
  and then started pay modem. It will be 6 years next month.
• 3:13
  Oh, it will be two months after this podcast.
• 3:18
  Revealing the secrets of the show, Jake.
• 3:21
  Yeah. And obviously orchestration is
• 3:24
  undoubtedly one of the most talked about areas in in payment
• 3:26
  still. So I wanted to kind of dive a
• 3:29
  little bit into kind of how you obviously six years ago, but
• 3:34
  you've worked in payments and then you've decided to build
• 3:36
  something yourself. What were like the key moments
• 3:38
  in your career that made you get to that point where you're like,
• 3:41
  you know what, I'm going to go and do something on my own now,
• 3:44
  right? Yeah, look, I'm going to be
• 3:47
  really honest. I lost my job and I got a call
• 3:51
  from a friend. He goes, I'm selling payments.
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  I go, how? You're not PSP, you don't have a
• 3:55
  licence. So we sort of started to sell
• 4:00
  payments together and all of the jobs that I wanted.
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  So I remember going for an interview at AGN, they didn't
• 4:08
  want me. And then I remember probably
• 4:12
  sending 5, maybe 6 very annoying emails to anybody that would
• 4:17
  respond to me at checkout.com back then.
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  I have a good story about checkout as well.
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  I I turned them down in like 2015, 2016, which had equity
• 4:26
  options and complete full. Just didn't really know enough
• 4:31
  about payments back then. But yeah, so started the
• 4:35
  business that way basically because all the companies I
• 4:37
  really wanted to work with didn't want me.
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  So I thought let's let's sort of see how this goes.
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  I had to do consultancy in the early days.
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  So it was like consulting is like ahead of payments that kind
• 4:51
  of paid the bills and then paved the way for really doing the
• 4:55
  deals which take, you know, 6 to 12 months, you know, the sort of
• 4:59
  enterprise type deals that really I've kind of been working
• 5:03
  on for last 10 years. So yeah, it was very, very
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  difficult in the beginning. I then got a, you know, as it
• 5:15
  always happens, I start to make money.
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  And then I have a friend who was over at MasterCard at the time.
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  He goes when you come back to London and, you know, work
• 5:25
  alongside me. And by that point, I'd had
• 5:28
  enough of a taste to know that no, I'm going to try and take
• 5:31
  this really as far as I can. The creative freedom you get not
• 5:37
  being employed, I presume as well like to go back into that
• 5:40
  was that. Was 100% to start with and then
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  what no founder often then talks about is what really happens is
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  that's kind of how it is in the beginning.
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  And then more and more and more responsibilities, you start to
• 5:56
  have more people that are reporting to yourself.
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  And really you kind of find yourself almost back there again
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  where you actually have an incredible amount of
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  responsibilities, you know, stakeholders across the
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  business. And if you want to go after, you
• 6:11
  know, the top talent, you know, you really kind of have to
• 6:15
  present yourself, you know, that way as well.
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  So yeah, that freedom originally was very fun first 2-3 years and
• 6:23
  then the last three years it was really about putting on a suit
• 6:28
  and a tie again and, and and getting really serious.
• 6:30
  Thank God, no, you don't get me in a suit and a tie.
• 6:32
  I'm not a suit and a tie beat, yeah.
• 6:35
  I get what you're saying and and orchestration in in essence as
• 6:39
  well. Like what parts of the industry
• 6:40
  did you feel were broken that was going to pave the way for
• 6:43
  orchestration to start really getting adoption and becoming
• 6:46
  part of the mainstream in payments?
• 6:48
  Absolutely. So the 5 1/2 years ago when I
• 6:52
  was doing a consultancy role as headers payments, my job was to
• 6:56
  configure payment methods on payment IQ and payment IQ.
• 7:01
  For those that don't know, is just got sold by Wild Line and
• 7:06
  surprised. To hear that was getting sold.
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  Big, big jewel in that crowd. We don't see the stock.
• 7:11
  Price. Yeah, I know.
• 7:12
  Yeah, that's not going down that rabbit.
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  Hole. But yeah, so it was literally my
• 7:19
  job and back then again, I don't really want to, you know, bad
• 7:23
  mouth back then it was, you know, literally you had to know
• 7:27
  20 to 30 lines of code as somebody that's operating it
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  from a front end perspective. Even when I had the mid
• 7:34
  credentials and everything and I just sat there thinking, why
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  can't I just copy and paste this mid and put it into my username,
• 7:42
  password and secret key, etcetera, and, and just paste
• 7:46
  this somewhere for it to just recognize that.
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  And for the rest of the sort of other configuration piece, you
• 7:54
  know, surely this can be done from a dashboard and not a
• 7:57
  string of code. So really that's where the idea
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  started. And then a year and a half after
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  that sort of moment, we then submitted for the UK Innovate
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  grant, which we were very lucky to win.
• 8:13
  Only something like, I think 1 or 2% of those who actually
• 8:17
  apply are successful. So that was kind of like the
• 8:21
  birth. Then what?
• 8:22
  Does that equate to then? Is that financial?
• 8:24
  Yeah. So it was a total of 375,000,
• 8:29
  but there had to be of that 375,000, a third of it had to be
• 8:33
  matched. So you basically do have to
• 8:35
  bring, you know, some of your own capital.
• 8:38
  I went to the bank, borrowed a credit card, interest rate of
• 8:43
  16.7%. No exaggeration as skin
• 8:47
  completely on the line. But still that the war chest you
• 8:49
  don't have right, like for putting your element in versus
• 8:52
  that is, you know, is really good starting point.
• 8:54
  It's like a seed. Yeah, absolutely.
• 8:56
  I mean, by that stage, we're kind of I was the seed.
• 9:03
  So good. Short for us for our captions,
• 9:05
  and I was the seed. Yeah, we, we just didn't, I
• 9:09
  didn't go down that traditional kind of route, which was
• 9:12
  incredibly hot back then, which was kind of that whole VC walk
• 9:18
  in pitch, tell everyone that you're going to be amazing.
• 9:21
  And Angel testers as well, like that Angel and Vester boom of
• 9:24
  like go and find 30 different people to Chuck in 10 grand
• 9:27
  each, right? Absolutely.
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  And then I remember looking at a list of, you know, 100 people
• 9:32
  and I will say thought I don't want to speak to 100 people.
• 9:35
  And it becomes a full time job raising money.
• 9:39
  If anyone's ever done it before, it involves a huge amount of
• 9:44
  time, resources. And really I want to sell and I
• 9:49
  want to build great products. And honestly, being ACR founder,
• 9:53
  you're kind of doing neither or you are doing those things, but
• 9:57
  after you've then raised the money and begun deploying that
• 10:00
  capital. So it wasn't a route that we
• 10:04
  went down. And so we kind of decided to do
• 10:08
  it the hard way and, you know, build incredibly slowly.
• 10:12
  But the nice thing about building slow is that problems
• 10:16
  that you become aware of and things that you may not have, it
• 10:20
  builds a really nice picture of what you then need to deploy
• 10:23
  moving forward. And you can be extra careful and
• 10:28
  really better about how that money gets deployed.
• 10:31
  No, I think what we've seen in the last sort of four to five
• 10:35
  years and possibly even before then, you've seen a lot of money
• 10:38
  being spent. And unfortunately it hasn't
• 10:40
  necessarily always gone on the right thing.
• 10:42
  So it hasn't gone really on those product pieces.
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  And you know, maybe too much of it got spent on marketing a
• 10:49
  product that really quite wasn't there from a product
• 10:52
  perspective. And there's been payments
• 10:54
  companies that have just disappeared from the market in
• 10:56
  the last five years, right? That had grown to what on paper
• 10:58
  seemed like a good sized company, you know, the Kevin's
• 11:02
  in the a 2A world and terrible taking vine out the market who'd
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  done well in the automotive space and things like that,
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  right. So that you do see brands that
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  are they're just, they're just taken off the table.
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  And I wanted to talk to you about the the merchant side of
• 11:17
  things as well, because it feels like merchants have more
• 11:21
  payments products than they've ever had before available to
• 11:24
  them, but they're not necessarily happy still.
• 11:29
  Yeah. So the friction that has been
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  building probably for the last 10-15 years has not come
• 11:39
  necessary from the product side because you know, APIs and
• 11:44
  documentation is better than ever, products are better than
• 11:48
  ever. You know, of course, there's
• 11:50
  always been that integration element, but the overall
• 11:53
  reporting, these back offices, everything in general has got
• 11:56
  better. What's got worse is requirements
• 11:59
  really for for merchants. So you know, gone are the days
• 12:03
  where you could suffice with, you know, a passport, utility
• 12:07
  bills and basic sort of company information and you know, A2
• 12:11
  pager. You know, more and more
• 12:13
  industries are, you know, they're not necessarily
• 12:16
  regulated, but the requirements that they have, whether it's
• 12:19
  come from the scheme, whether it's come from PSD 2 now PSD
• 12:22
  three, whether it's GDPR, whether it's APCI compliant
• 12:26
  change, you know, all of these things actually do have a huge
• 12:30
  impact. I think the market is so
• 12:32
  unprepared for PSD three at the moment.
• 12:35
  When you start to read more about it and look into the finer
• 12:38
  details like it's, it's, there's some fundamentally significant
• 12:41
  changes between 2:00 and 3:00, right, that are going to shake
• 12:44
  the market up. Yeah.
• 12:46
  And it's, you know, I, I've only looked at it from a high level
• 12:52
  perspective and I'm sort of looking through it, thinking
• 12:56
  there's things here that really should have been solved already,
• 13:01
  that now we're, you know, basically making a framework and
• 13:05
  then forcing people to fix. And I don't actually ever think
• 13:10
  innovation should happen that way.
• 13:13
  You know, I have unfortunately. I mean, you just said one of the
• 13:16
  names, right? You know, Vine and I knew I
• 13:21
  still know some of the guys that that started with Vine and
• 13:26
  really they they weren't let down by anyone other than really
• 13:31
  that framework was not good enough and not enough things
• 13:35
  have been thought about. You know, the fact that we're
• 13:38
  sort of eight years on now from that announcement of PST two in
• 13:42
  2018 and we're still debating refunds and other things in that
• 13:48
  A to a space really is just not good enough.
• 13:52
  And you know, the traction has really only started to happen in
• 13:58
  my opinion last sort of two to three years outside of kind of
• 14:02
  some of those core verticals that we saw.
• 14:05
  So, you know, gaming paying for, you know, a one off transaction
• 14:10
  payment, funding your ISA or your pension or something that
• 14:15
  just hasn't been that movement. Yeah, towards some of the things
• 14:19
  that that you would want to see. Do you think we talked to
• 14:23
  merchants enough? And obviously you said you did
• 14:25
  some consulting stuff working with merchants in that kind of,
• 14:29
  you know, head of head of payments capacity.
• 14:30
  Do you think we spend enough time talking to the merchants
• 14:32
  about the challenges? Or do you think we have this
• 14:34
  innate sort of thing within the payments industry where we go
• 14:38
  and build stuff we think they want, but the reality is, let's
• 14:41
  go and ask them what they want more often than we do?
• 14:44
  Yeah, it's kind of like a double edged sword because.
• 14:49
  Particularly relevant to orchestration of course as well,
• 14:51
  because you know you're you're solving problems, but you really
• 14:55
  need to know the answers to the things you're solving early.
• 14:58
  Exactly. And then the, the reality is you
• 15:01
  can almost again build too much product and you know that, you
• 15:05
  know, payment IQI have a friend who owns a company called Pay
• 15:10
  Direction and he, there were 150 rules there, right?
• 15:15
  And of those 150 rules, he said 80 or 100 of them are just not
• 15:23
  even used at all. So there's like you can listen
• 15:28
  sometimes too much and come up with something that only one
• 15:32
  person may or may not use or not, then go and configure.
• 15:37
  At the end of the day, you know, the most important thing about
• 15:39
  payments is one, trust, which is financial services in general.
• 15:44
  And two, it needs to be working 24/7.
• 15:47
  So there's like all those core pieces.
• 15:49
  And as soon as one of those core pieces falls out, you know, we
• 15:53
  can almost get distracted sometimes by, by the shiny
• 15:56
  object stuff, you know, with, with us when we released and
• 16:01
  went live from our platform just over 12 months ago.
• 16:05
  Yeah, of course those first customers, they're the ones
• 16:08
  driving into us and it would be crazy not to listen to them.
• 16:13
  I, you know, they're our first customers.
• 16:15
  They've took, taken the risk, the chance almost on you as a
• 16:19
  business who's just gone live with a product who only got
• 16:24
  themselves PCI compliant 2 months previous, right.
• 16:27
  So. Do you think merchants have
• 16:28
  become more sophisticated with their payment stack though and
• 16:30
  their payment knowledge? I think they've been, I think
• 16:33
  they've been forced to though, you know, Visa or just offering
• 16:36
  Visa and MasterCard. And even if you have got Apple
• 16:39
  Pay, Google Pay, it's just not good enough in, in, you know, a
• 16:43
  merchant who is selling to, you know, multiple sort of
• 16:48
  countries. You know, there is a demand
• 16:52
  there from their end customer. So they have had to become more
• 16:56
  sophisticated in order to convert.
• 17:00
  You know, I regularly speak to sort of friends of mine as well.
• 17:03
  And if they don't like the experience, then, you know, they
• 17:06
  can just go and find another person with a Shopify store
• 17:08
  that's maybe selling, you know, similar product or a different
• 17:12
  pair of glasses. And yeah, the pressure is on, on
• 17:17
  on the merchant side. And that whole sort of
• 17:20
  localization piece, again, is just driving, you know, the the
• 17:27
  need for for that sophistication, being able to
• 17:31
  route a transaction slightly differently, you know, making
• 17:35
  sure that transactions become tokenized, you can reuse them,
• 17:40
  you know, maintaining approval rates.
• 17:43
  You know, all of these things are not really or weren't really
• 17:49
  in the vocabulary sort of 10 years ago.
• 17:51
  You know, you were doing well if you were a High Street brand and
• 17:54
  you had an online sort of store. It wasn't until everyone started
• 17:59
  walking around with an iPhone sort of 10/12/13 years ago that
• 18:03
  these people were forced into that space and now that whole
• 18:08
  sort of competition is is taking place.
• 18:12
  You know, you still got, you know, you still got redirects
• 18:15
  out there and legacy gateway setups like like that, that, you
• 18:19
  know, mobile thirst interface experiences.
• 18:24
  It makes no sense for a merchant to have a really slick mobile
• 18:28
  base website. And then the payment element
• 18:31
  that's bolted on to that is not mobile centric, right?
• 18:34
  You know, so that's, that's for me, it's like where payments
• 18:37
  industry sometimes hasn't moved quick enough in terms of we need
• 18:40
  to see where retail is going and the retail UI and UX experience.
• 18:44
  Obviously the likes of Shopify saw that they got ahead of it.
• 18:47
  They delivered for that and their payment solution then
• 18:50
  invariably was slick because it was a bolt on of that, right?
• 18:54
  So, yeah, and people, people have like this trust of a
• 18:58
  Shopify checkout now because you see it and you know, it's a
• 19:00
  Shopify checkout, right? They all look the same, which
• 19:03
  some might say, oh, that's not a great thing.
• 19:05
  We don't want our sites like everyone else's.
• 19:06
  But from a consumer trust point of view, you do feel safer, I
• 19:11
  feel on a on a Shopify store sometimes because you're
• 19:13
  familiar with that interface. There's some pretty funky things
• 19:17
  that that I completely agree with you in sort of e-commerce
• 19:21
  land 100%. There's some pretty, you know,
• 19:25
  I've seen some pretty interesting data though, you
• 19:29
  know, comparing sort of embedded experiences sometimes to a
• 19:35
  redirect. Even me myself, like I enjoy
• 19:41
  this will sound really weird to you, but like I see kind of
• 19:44
  PayPal, it's been around for 20 years and I like getting
• 19:48
  redirected where I have to log into my wallet because it's like
• 19:51
  oh it's PayPal in the URL. That really doesn't make sense
• 19:54
  to me. You, you don't like that, I
• 19:56
  know. And it's it's kind of like there
• 20:00
  are still those habits there where there are strange skews
• 20:04
  sometimes in this data that that actually.
• 20:09
  Speak a different story, Yeah, Whether that's a good thing or a
• 20:13
  bad thing. H way has brought back that
• 20:16
  payment flow a little bit and I think that's why it's stalled in
• 20:19
  the first instances because you are taken off to the banking app
• 20:23
  if you're verifying like double tap Face ID, right, there's
• 20:28
  still another layer right involved in it.
• 20:30
  And we talk a lot on the show about the consumer expectation
• 20:34
  around speed for everything. Now, whether that's stable coins
• 20:39
  helping, you know someone to actually get money out of the
• 20:42
  country quicker because it's not hitting so many different
• 20:44
  banking providers in in the middle or whether that's A to a
• 20:48
  doing real time settlement on and weekend settlement.
• 20:51
  So you don't have to wait for your Friday payments to come in
• 20:54
  on on the Monday the week after right.
• 20:55
  Like if everything else in life is quick payment should mirror
• 21:00
  that. And I kind of feel like that's
• 21:01
  the the narrative that merchants now have when they're looking at
• 21:04
  payment systems. Providers like our consumers
• 21:07
  need to be able to interact with it in a fast and slick way and
• 21:10
  it needs to not slow them down in life.
• 21:13
  I completely agree, but I, I feel that that's already
• 21:16
  happened. So, so I am still miffed.
• 21:23
  You know, as a business, when we send a SWIFT payment, we we
• 21:27
  received a SWIFT payment the other day from, from one of our
• 21:35
  providers and it came to us faster and appeared in our bank
• 21:39
  account because I get sort of the alerts on my phone quicker
• 21:43
  than it took him to respond to the e-mail.
• 21:46
  And I remember, you know, selling earth port 10 years ago
• 21:50
  saying we can plug you into auk first payment scheme and, and do
• 21:56
  instant payouts for low value transactions that you don't need
• 21:59
  to pay out on SWIFT. And obviously there's like cost
• 22:02
  element, but really that speed thing there was, you know, it
• 22:05
  was always 2-3 days for Swift. So I think it's, it's happened
• 22:10
  in certain places I think where the merchant sort of frustration
• 22:14
  is exactly on their side whereby it's an acquirer whereby you
• 22:22
  know, OK, the payment has been captured.
• 22:25
  You know, if we're going through a Visa or MasterCard scenario,
• 22:28
  but you know, it's 34 AM that we're actually confirming full
• 22:33
  settlement and then it actually really does appear in your
• 22:36
  merchant balance. So on that side of things, yes.
• 22:40
  But from the consumer facing side it looks pretty instant.
• 22:44
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• 22:47
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• 23:01
  time UK and EU transfers and global mass payouts.
• 23:04
  Within that platform, Paid by provides pay by bank with real
• 23:08
  time settlement notifications, automated reconciliation and
• 23:11
  integrated refund management. One partner, one integration,
• 23:16
  helping your business transact with confidence.
• 23:18
  You can learn more at ISX dot Financial.
• 23:21
  That's ISX dot Financial and a big thank you to the team at ISX
• 23:25
  for supporting the show. So diving into orchestration and
• 23:30
  I feel like a lot of people struggle to explain it properly.
• 23:34
  In layman's terms, how would you define orchestration in
• 23:37
  payments? Payments orchestration is
• 23:43
  removing the requirement for multiple direct integrations and
• 23:48
  collecting you know as much of that data in one place with the
• 23:55
  view and the name to improve the overall acceptance and
• 24:00
  conversion of your customers. You probably 20 words.
• 24:02
  There's probably too much. But you could argue that
• 24:04
  orchestration also adds another layer.
• 24:08
  I and you know what there's, there's, there are certainly
• 24:12
  times whereby we, we have that conversation with, with people,
• 24:17
  they go, look, we've got world pay already integrated directly
• 24:22
  and we've invested over the last 10 years a lot of time
• 24:28
  integrating everyone else in and we kind of turn around and say,
• 24:32
  absolutely keep those integrations.
• 24:34
  If they're working and they're converting for you, you don't
• 24:38
  need to, to, to break things, right.
• 24:41
  But if you are looking to grow and expand and you want to add,
• 24:45
  you know, local payment methods and you want to go into Brazil
• 24:49
  or, or Mexico or, you know, you haven't got any of the local
• 24:53
  European Apms yet, you know, then orchestration is just the
• 24:57
  most obvious choice for enabling, you know, that next
• 25:01
  level of, of payment. Because then, you know, rather
• 25:07
  than them have to go away, do 5 direct integrations, you know,
• 25:11
  and then of course, there's a configuration on the front end.
• 25:13
  If they're hosting their own experience, then that all needs
• 25:18
  to be, you know, integrated and. But what do you think
• 25:23
  differentiates I guess true orchestration from just multi
• 25:27
  PSP routing? True orchestration is really
• 25:32
  being able to take that data and then drop in, you know,
• 25:38
  different rule sets like we have set up on ours.
• 25:41
  So for example, if you want to block, you know, problematic
• 25:48
  customers all from the same place, you know, we can catch
• 25:52
  that on an API basis directly from your platform.
• 25:56
  You can block it from our platform and we can speak back
• 25:59
  to your platform. If you're doing internal sort of
• 26:02
  tracking order numbers, we link to a number of our sort of
• 26:07
  customers, they have their own sort of ID whereby they are sort
• 26:12
  of taking that ID to track not just the payment, but the
• 26:16
  customer all the way from ABCDEF all the way through their entire
• 26:21
  sort of journey and process where we sort of touch upon much
• 26:25
  more than that sort of payment thing.
• 26:27
  So it might be like, you know, on the fulfillment side or the
• 26:30
  actual specific data of that user with the time and date
• 26:35
  stamp of of when it happens. Because one of our merchants
• 26:38
  literary tracks, they look at a conversion of, you know, it's a
• 26:43
  time thing for them. You know, how quickly were we
• 26:48
  able to sort of satisfy the needs of that customer?
• 26:51
  Yeah, basically. And I've dealt with certain
• 26:53
  orchestrators as APSP in the last, you know, 5-6 years.
• 26:58
  And we were wanting to get our PSP solution into the
• 27:03
  orchestration platforms, right? And my mindset also was like,
• 27:06
  surely it's the more the merrier for them.
• 27:08
  But the narrative coming out was always like, if a customer needs
• 27:11
  you, we'll connect you. But sure, surely the mindset of
• 27:14
  an orchestrator should be we need as many as possible to give
• 27:17
  the people the choice that then allows us to orchestrate.
• 27:19
  Or is that just too much to manage on your side as well?
• 27:21
  It it Yeah. So the I agree with you, like
• 27:26
  the the best orchestrators out there are the ones that are
• 27:30
  again removing the friction with the providers.
• 27:33
  Yeah, on behalf of the merchant. And unfortunately there's a few
• 27:38
  bad actors in the space because, you know, there's money
• 27:40
  exchanging hands as well. And that obviously dilutes then
• 27:44
  sometimes that true value proposition from our side.
• 27:51
  We we work more on that basis. So like, yeah, we look at really
• 27:56
  core requirements what somebody wants.
• 27:59
  So the analogy that I gave to one of the shareholders the
• 28:04
  other day is, you know, rather than skating towards the park,
• 28:09
  so it's an ice hockey one. The park's always constantly
• 28:12
  moving, right? And if you're constantly trying
• 28:14
  to go towards it, it's still moving.
• 28:16
  Whereas if you're skating and controlling with the park, you
• 28:20
  know, you have more really of a control.
• 28:22
  And then also, yeah, no secrets here.
• 28:25
  It is very expensive to maintain AP is because integrating sure.
• 28:31
  So week's work maybe, right. But the reality is you're always
• 28:35
  going to have changes, you know, so a provider, for example,
• 28:39
  actually we need to receive this in the payload data.
• 28:42
  You know, it might be an e-mail address, might be a phone
• 28:44
  number, You know, there's always requirement changes happening.
• 28:48
  There's always advancements being made in these payment
• 28:50
  methods. And what it really comes down to
• 28:52
  is ensuring that you can provide really the best sort of
• 28:56
  experience of those payment methods which we feel, you know,
• 29:01
  you can have 10 providers, but if ten of them, none of them are
• 29:04
  updated and none of them working that great, then why?
• 29:08
  Why provide 10 things? It's like APSP managing 30
• 29:12
  shopping cart plug insurance and keeping them up to date, right?
• 29:15
  Like it's, it's it's hard to do And one thing people
• 29:17
  underestimating payments is actually how hard it is to
• 29:20
  operate. What what is your experience
• 29:22
  being navigating different licensing and regulation as
• 29:26
  you've scaled the business? Yeah, absolutely.
• 29:30
  It's been completely new for me because I've always worked on
• 29:34
  the commercial side. So really the last three years,
• 29:38
  you know, getting ourselves PCIDSS compliant again with the
• 29:43
  changes there for the renewal of our our license.
• 29:48
  Obviously there's things on sort of the front end which you know
• 29:52
  create more requirements. It's it's been really eye
• 29:56
  opening. Have you seen more barriers
• 29:58
  creep in as well to make it harder to build in the space in
• 30:01
  the last two or three years? It is, but I always understand
• 30:05
  the reasons behind it. I'm kind of like, oh, we got to
• 30:08
  do this. But it's, I also understand why
• 30:15
  some of this stuff has to be done because like if I was a
• 30:19
  merchant, I certainly would expect the partner that's
• 30:24
  handling my data to be, you know, very secure.
• 30:28
  You know, we've just had to spend a large amount of money on
• 30:33
  a software provider just to monitor all of our external
• 30:39
  branches with the providers. And but I get that as well
• 30:46
  because we've seen, unfortunately, with certain
• 30:49
  integrations, you know, they'll sort of, you know, there'll be
• 30:54
  an exposure really in between, say, the customer's platform or
• 30:58
  the customer's car or whatever it is where somebody can sit in
• 31:02
  the middle and sort of Hoover up sort of information, even if it
• 31:05
  isn't the card details, it's their name, it's their address.
• 31:10
  And so, yeah, for us, it's actually really important
• 31:14
  because again, it goes back to sort of trust and reputation,
• 31:18
  which in my opinion is kind of really the two most important
• 31:22
  things in this industry. And ensuring that you maintain
• 31:26
  those things is is very important.
• 31:28
  And in Europe in particular, do you think it's becoming easier
• 31:32
  or harder to build right now when you look at things like the
• 31:35
  Pi and whereas as an orchestration platform
• 31:37
  particularly like, is that kind of a route to easier market
• 31:42
  access across multiple countries?
• 31:47
  Yeah, 100%. I think, I think it, it's, it's
• 31:51
  going to be really interesting seeing how this plays out
• 31:54
  because I think we've had sort of eight years of open banking.
• 31:59
  So we're as what announced sort of year, year and a half ago.
• 32:03
  So let's call it 6-7 years where a lot of frustration
• 32:07
  unfortunately has sort of built and grown.
• 32:09
  And now we're going back to, you know, that privatization sort of
• 32:14
  model of these, you know, this A to a sort of bank payment
• 32:18
  scheme, but with that important layer, which is, you know, the
• 32:22
  wallet side. And as we know now, you know,
• 32:24
  more and more transactions, not just from point of sale, sorry,
• 32:28
  not just from online, but also point of sale are coming through
• 32:32
  wallets. And that opens up I think a much
• 32:37
  better experience and potential choice for those end customers.
• 32:43
  It also gives the bank really a piece of the action rather than
• 32:47
  the regulator or not necessarily a regulator, but, you know,
• 32:51
  frameworks are being dumped on somebody and say go and build
• 32:54
  this for us because you have to. I don't think he's ever really
• 32:58
  the right way of sort of doing things.
• 33:00
  So, you know, and you probably tell the inner capitalist comes
• 33:04
  out right. But yeah, I, I do think that's a
• 33:07
  really great play. You know, watching Christine
• 33:10
  Lagarde's, I think sort of 6-7 weeks ago when she was talking.
• 33:14
  So. Yeah, Visa and Mascot were
• 33:17
  probably watching that thinking, oh God.
• 33:19
  But you know, they're in that space as well, though, don't
• 33:22
  forget. So, yeah, I think it's, it's
• 33:25
  always been, you know, the last 10 years and you've been in this
• 33:29
  even longer than I have. It's an incredibly exciting
• 33:32
  space seeing these developments. You know, we're literally living
• 33:35
  and breathing these changes. And as you can see, I get
• 33:39
  probably a little bit too excited about it, but it's it's
• 33:43
  a lot of opportunities. It's one part of the industry
• 33:45
  you could redesign and change for the better, though.
• 33:48
  What, what? What would you isolate and?
• 33:50
  Yeah, I mean it, I think, you know, you don't want to live in
• 33:55
  the past, but yeah, open banking it it, you know, and we, we, you
• 34:00
  know, we work and, and do open bank transactions as well.
• 34:03
  And I I just kind of wish it had been was that clearer framework
• 34:06
  almost from day one with a few more bits and pieces that really
• 34:10
  have been, you know, figured out I think because it did still
• 34:14
  have and it does still have a lot of potential.
• 34:16
  And as we can see from the volumes, it is still a space.
• 34:23
  So yeah, that's probably do you do.
• 34:26
  You factor direct debit into your proposition of interest.
• 34:28
  We do not. Yeah.
• 34:31
  I mean we do recurring billing through the schemes but not.
• 34:35
  Well, your thoughts on direct debit in, in the UK in terms of,
• 34:39
  you know, still has huge, huge volumes, right?
• 34:42
  Yeah, and direct debit's amazing in the UKI don't think we know
• 34:46
  how lucky we are sometimes in the UK.
• 34:48
  Open banking's great, Direct debit's great, banking's great.
• 34:52
  Was in HSBC this morning. In a branch, actually in a
• 34:55
  physical. Branch well I had to as yeah, I
• 34:58
  helped give my little boy an account set up Oh nice no, I
• 35:02
  think you compare like UK banking services to you know I
• 35:06
  live in Spain and I pay €15.00 a month to have a debit card and
• 35:13
  and and I pay it's. Not utility bills.
• 35:16
  I don't know if it's still like that in Ireland but you used to
• 35:18
  have to pay for withdrawals at cash points I think it was until
• 35:22
  not that. Long ago.
• 35:22
  Let's still in Spain as well, yeah?
• 35:24
  Yeah, just as standard as Spanish banks as well.
• 35:28
  What to do? Cash withdrawal.
• 35:30
  Yeah, that's crazy. I know, and, and I remember sort
• 35:37
  of, you know, listing to sort of the Challenger Bank pitch 10
• 35:42
  years ago, thinking why HSBC is actually quite good, you know,
• 35:47
  you know, I've got my because they were the first bank in the
• 35:49
  UK to have Apple Pay. I remember having Apple Pay in
• 35:51
  it 20/14/2015 time. I was like the first customer
• 35:55
  walked into a shop, made a payment and he was like, what is
• 35:58
  that, you know, you're paying with your phone kind of thing.
• 36:01
  Yeah, but I didn't think that the popular, I thought the
• 36:05
  popularity of the challenger bank was going to actually be in
• 36:09
  Africa, in Latin America, and that has happened there.
• 36:13
  But actually the popularity of Revolut and some of the other
• 36:19
  sort of challenge banks, the, the massive uptake has come from
• 36:24
  7 European countries, you know, Spain, you know, all of these
• 36:30
  sorts of Mark, Portugal and even some of the Northern European
• 36:34
  countries because the banking in their own country was so bad
• 36:37
  stuff. And, and, and that whole
• 36:40
  experience again, we go back to friction.
• 36:44
  You know, you just want, let's say for example, you got for a
• 36:47
  meal, you want to send some money to, you know, your mum and
• 36:50
  dad, you know, just having that sort of dynamic Euro I ban what
• 36:56
  my, my, you know, what's been happening recently to me in
• 37:00
  Spain and not sure if this will get me in trouble or not, but
• 37:05
  you know, I send money from a Revolute account.
• 37:07
  So it's a euro sepper. I ban account that I have.
• 37:10
  So it goes out through that scheme in rail, but a Spanish
• 37:13
  bank will see that and they'll say no, it's an international
• 37:17
  payment because technically it's come from AUK account, even
• 37:20
  though it's been sent out on a Euro SEPA instant scheme.
• 37:26
  And they will just go for it, Yeah.
• 37:29
  And it's criminal. It's it's crazy.
• 37:31
  So a couple of quick fire ones for you.
• 37:34
  What is it? Give me one or two things you
• 37:36
  think of massively improved in payments in the last five years.
• 37:39
  Speed. Speed.
• 37:40
  OK. Yeah, in every area, just.
• 37:44
  I mean, what's left, I mean, was you obviously direct debit?
• 37:48
  Yeah, that takes still, you know, back.
• 37:51
  System. Yeah, yeah, that's yeah.
• 37:54
  Legacy payroll. Yeah.
• 37:57
  OK, so there's, there's still a few areas, but I mean, the world
• 38:02
  we lived in 10 years ago, sending money to one another,
• 38:06
  making a card payment, Apple Pay.
• 38:09
  Yeah, these are huge and and it has totally transformed our
• 38:15
  lives to where it's just a given.
• 38:18
  OK. Making making payments.
• 38:20
  And then what hasn't changed that should have changed by now?
• 38:23
  Should. Have probably done a bit of
• 38:29
  homework for this. What should have changed?
• 38:34
  I think what should have changed is awareness around Visa and
• 38:42
  MasterCard fees and how much they differ, you know, between
• 38:48
  different countries because you have one product that's
• 38:53
  effectively 5-6 times more expensive in the US than it is
• 38:58
  here or in Europe. And and you know, as we've seen
• 39:03
  it, there's, there's not really been any explanation.
• 39:05
  It's changing scheme fees. It's like the codecs, right?
• 39:09
  Like understanding the differences between them all and
• 39:12
  the sheer volume of them all. But they're almost, they're
• 39:16
  built to be that way deliberately though, I think,
• 39:18
  right? That's kind of like I don't.
• 39:20
  Want to get in trouble? Yeah, I know.
• 39:21
  But it's like, you know, it is that principle of like why does
• 39:24
  it need to be that complicated ultimately?
• 39:27
  Like I'm a big advocate for for blended pricing in the market
• 39:30
  because interchange plus plus pricing is supposed to be the
• 39:33
  most transparent form of pricing.
• 39:36
  But actually there's that narrative of fees are being
• 39:39
  hidden, but fees are still being hidden in the core blended
• 39:42
  pricing, right? But you know exactly what your
• 39:44
  bill is going to apply like. I, I kind of, I, I half agree
• 39:49
  with you. I, I half disagree with you.
• 39:52
  So like I think maybe it's because some of the
• 39:53
  conversations we have more sort of on the enterprise level where
• 39:56
  like IC plus is, is the norm. Yeah, but they've built engines
• 40:00
  that decipher it for them and they make it clearer, but at a
• 40:03
  certain level. I don't think it needs to be
• 40:06
  priced that way. I agree.
• 40:09
  And speaking to, you know, John Clogs, who's selling clogs on
• 40:16
  the Internet, yeah, probably wouldn't be called John if he
• 40:22
  were saying clogs would probably be called, Yeah, a Dutch name.
• 40:25
  But it it would be. Yeah, it would be, yeah.
• 40:30
  It's very odd having to explain it to somebody like that.
• 40:34
  Yeah. Do you think we're heading
• 40:37
  towards a consolidation point in the market where there's just
• 40:40
  going to be fewer amount of large, large players?
• 40:47
  Yes and no. At the same time, I think yes,
• 40:52
  if you're thinking about acquirer with Bolt on Gateway
• 40:57
  and is not you know again not naming any names, not doing
• 41:02
  enough to innovate, but has built up a very large Moat
• 41:05
  because they hold multiple licenses.
• 41:09
  They have 345678 year agreements with people and it's very hard
• 41:15
  to sort of operate certain businesses at scale.
• 41:19
  Yes, in that area. However, in terms of sort of
• 41:23
  incumbents, I think there's still a lot of space there for,
• 41:29
  you know, those ongoing improvements, you know, to
• 41:32
  experience just just being able to work with somebody who's kind
• 41:37
  of, you know, more friendly. I genuinely believe we've picked
• 41:40
  up a lot of our business just because you know, we've been
• 41:43
  willing to sort of sit down with somebody and explain that IC
• 41:46
  Plus plus. It's an interesting one because
• 41:48
  there definitely has been consolidation happening in the
• 41:50
  market, but I also feel like payments is just PSD 3 might
• 41:57
  change it slightly with like how easy it is to come into the, the
• 42:00
  industry. But we have such strong
• 42:05
  innovation track record in the payments industry and that you
• 42:07
  know, because we're servicing the global movement of money and
• 42:12
  consumers always wanting that to be better, quicker, faster, like
• 42:15
  we talked about, right? There's always someone new
• 42:17
  coming in and stable coins has been the latest hype in the last
• 42:20
  couple of years. But I mean, stable coins are
• 42:22
  getting to a point where they are solving real problems that
• 42:26
  we've had in the in the traditional banking ecosystem
• 42:29
  now, right? Like it comes in as a hype
• 42:30
  train. Oh, it's in high risk, it's in
• 42:33
  crypto, it's in gaming. And it's like, OK, yeah, but a
• 42:36
  lot of stuff started in in gaming that then got applied to
• 42:39
  to other spaces. I mean, gambling companies were
• 42:42
  the first merchants orchestrating, right?
• 42:44
  Like properly orchestrating between multiple PSPS and
• 42:47
  acquirers, right. So in any way, in many ways that
• 42:50
  them and and airlines and like should kind of be like the
• 42:53
  incubators of a lot of stuff that gets rolled out to measure
• 42:57
  payments. But I think there is still lots
• 42:59
  of window of opportunity for new entrants to the market.
• 43:02
  That's my personal opinion. But I completely agree with you.
• 43:05
  And I think one of the things that people always kind of
• 43:11
  overlook is that the times that we're talking about here, you
• 43:16
  know, so you know, sure, you know, I had a little bit of a
• 43:21
  moan at the start deny about open banking, which is probably
• 43:23
  a little bit unfair. I think a lot of people have
• 43:25
  been on the podcast have have called open banking out as I
• 43:29
  think like something that they're frustrated because
• 43:32
  they've seen the potential, but it hasn't got to where it's
• 43:34
  supposed to get to as quickly as it should have done an.
• 43:36
  Internal thing, yeah, no one 100% I think.
• 43:40
  I think we just, I think a lot of people with technology just
• 43:43
  in general, they, they go because, you know, you and I,
• 43:46
  it's very new to discuss something like PSD 3 and you
• 43:50
  know, you know, why can't we do this, this and this?
• 43:54
  Because we have those conversations with merchants and
• 43:58
  usually that, you know, a lot of the time they're, we're having
• 44:01
  those conversations. So they want to be on the
• 44:02
  cutting edge of something. And so that naturally happens,
• 44:06
  but there's, there's always sort of that 10%, kind of there's 10%
• 44:11
  of people that really want the really fancy trendy clothes.
• 44:15
  But then you actually have 80% of the market or 8090% of the
• 44:19
  market that aren't that interested in being the first
• 44:22
  person to have Apple Pay. No, I'm a bit of a loser.
• 44:25
  I, I thought that was cool, you know, back in 2015, I wanted to
• 44:28
  be the person phoning my HSPC. Said when you told me you liked
• 44:32
  the PayPal checkout experience earlier so.
• 44:34
  No, but talking of PayPal, my my dad swears by it and.
• 44:40
  Isn't it funny though? Pay any other way?
• 44:42
  But I think there's like PayPal was always like the young kid,
• 44:46
  cool hipster eBay thing. And now it's ended up in many
• 44:49
  ways, it's like there's an older generation that that trusts that
• 44:52
  PayPal branch. And like they liked I I think
• 44:55
  it's the ebaying generation. They like the hardcore ebayers
• 44:58
  that have been buying and selling on there for a long
• 45:00
  time. Yeah.
• 45:01
  They, they just have this love for for paper.
• 45:04
  It's very big in Europe still as well, right, I mean.
• 45:05
  It's Northern Germany, yeah, yeah, Northern Europe.
• 45:08
  Sorry. I was going to ask you as kind
• 45:10
  of one of the final questions before we get into our our end
• 45:13
  segment that I think I might, I might know what your answer
• 45:16
  might be. So you you rolled your eyes at
• 45:19
  this a little bit earlier when I mentioned it, but what do you
• 45:21
  think the most overhyped thing in payments is right now?
• 45:24
  Oh, I again, I this is that one question.
• 45:30
  And I've watched your podcast before and it's like, who do we
• 45:33
  what do we throw under the bus almost?
• 45:35
  And it's like, Oh, I don't want to answer.
• 45:37
  I think I think hype is is I think we probably get too
• 45:43
  excited in our little payments world over, you know, Oh, we've
• 45:49
  done a big series AB and unfortunately we haven't seen
• 45:52
  enough series ASBCS. They've really come to fruition
• 45:58
  that then become listed that then have, you know, these
• 46:02
  incredible sort of exit scenarios journeys.
• 46:05
  So like I think there's been there was two, there have been
• 46:08
  there has been too much hype. That hype has cooled down the
• 46:11
  last two years. So this is more of a five years
• 46:14
  probably moan. Yeah, having, yeah, yeah, I
• 46:17
  know. I think we are culpable of of
• 46:19
  over hyping that I think you know, you know, in my in my
• 46:23
  newsletter do weekly obviously call out fintech news that's
• 46:26
  happened payments news and I haven't been short on finding
• 46:32
  series A's and B's and C's over the last two years that I've
• 46:35
  been doing that newsletter. Like there's one in there every
• 46:37
  single week, right? Like there was a lot of
• 46:39
  investment going on when I think back and I'm like, OK, but how
• 46:43
  many of them have then gone on to the next rays or and you know
• 46:46
  how long it took Clara to actually list right?
• 46:48
  And I know they were waiting for the right time, but.
• 46:49
  Oh, and then look at the stock price.
• 46:52
  Yeah, it is interesting, but that was an overhyped question
• 46:55
  that was not the shelf of shame. So I'm kind of come back to.
• 46:58
  You for the. Final part of our show, which is
• 47:02
  the shelf of shame. So this is where you nominate
• 47:06
  something to banish forever from the worlds of It can be
• 47:10
  payments, it can be fintech, it can be business leadership,
• 47:13
  something that really grinds your gears and you get to banish
• 47:17
  forever. Any salesperson using flying
• 47:23
  terminology. OK.
• 47:26
  We need to land the plane. Oh, OK, interesting.
• 47:29
  Do we? Do we need to?
• 47:31
  Do we need to land the plane? I've never heard that before.
• 47:34
  Is that like a? Is that a thing?
• 47:36
  I've been hearing it. I've been hearing it weirdly
• 47:39
  over the last like 2-3 months. Like analogies?
• 47:41
  Yeah, that's all around. Flying.
• 47:43
  Oh God. Related to sales.
• 47:45
  Yeah, that can definitely, because we're definitely not
• 47:47
  pilots. Yeah, that's well, we could
• 47:51
  probably make a whole list of things that salespeople say that
• 47:53
  should go on the shelf, but no, I like that.
• 47:56
  OK, interesting. So look, been a really great
• 47:58
  conversation and I just want to ask where people can get in
• 48:02
  touch, find out more about yourself, pay modem.
• 48:05
  How do they contact you? Yeah, absolutely.
• 48:09
  We're most active probably on LinkedIn.
• 48:11
  So updates there. You'll find us obviously under
• 48:14
  pay modem there on the Internet, it's just paymodem.com.
• 48:19
  So it's PAYMOD, um.com. Dot com, not dot XYZ.
• 48:27
  Yeah, or some of the. Other We had another guest on
• 48:29
  the other day that said that they went with XYZ and they're
• 48:31
  actually changing it because 60% of their emails go into spam
• 48:34
  across the whole business. Yeah, of course.
• 48:38
  Yeah. So, word of warning for anyone
• 48:40
  else. There's some very creative
• 48:42
  things that you can do on that domain side though, like where
• 48:45
  you can, yeah, probably not good for e-mail campaigns, but trying
• 48:51
  to place slightly differently in your SEO and catching, yeah,
• 48:57
  there's some pretty cool stuff you can do there.
• 48:59
  I think dot IO might be better than dot XYZ.
• 49:02
  We've got, we've gota dot IO as well, but.
• 49:11
  Just waiting. Waiting for the moment.
• 49:13
  Waiting for its time. Yeah, I mean
• 49:15
  liketheproblemwith.com now is it's virtually impossible to
• 49:19
  find a.com domain. So everyone's been forced
• 49:23
  elsewhere because they simply refuse to pay these people who
• 49:28
  sit on these domains and don't don't use them for anything.
• 49:32
  Which, yeah, it's a completely unregulated space and there's a
• 49:37
  lot of people that have made a lot of money just simply buying
• 49:40
  domains. The next one the regulators are
• 49:42
  coming for. Well, we'll see.
• 49:46
  We'll see. Hey, Jake, amazing conversation.
• 49:49
  Thanks for joining us on the payment shed today.
• 49:51
  And yeah, take care. See you.
• 49:53
  Thank you.