Latest / Leaders In Payments / AI in Payments Series: Featuring Payarc Co-Founder & President Jared Ronski | Episode 383

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AI in Payments Series: Featuring Payarc Co-Founder & President Jared Ronski | Episode 383 · Leaders In Payments

• 0:19
  Speaker 1: Thank you.
• 0:19
  Speaker 1: Scale their businesses one payment at a time.
• 0:22
  Speaker 1: At Payark, ai is more than a buzzword.
• 0:25
  Speaker 1: It is integrated into everything they do, from predicting merchant churn to risk assessments, to self-service tools.
• 0:32
  Speaker 1: Join us for this special series on AI in Payments.
• 0:38
  Speaker 2: Hello everyone and welcome to the Leaders in Payments podcast.
• 0:41
  Speaker 2: I'm your host, greg Myers, and on today's show we have a very special guest, jared Ronski, the co-founder and president of Payark.
• 0:48
  Speaker 2: So before we jump into the episode, I just wanted to mention a few things.
• 0:51
  Speaker 2: We had Zach Martinez, the CEO of Payark, on the show About a year ago.
• 0:55
  Speaker 2: He was episode 303.
• 0:57
  Speaker 2: And more recently, we had John Minitaglio on the show, the CTO of Payark.
• 1:02
  Speaker 2: He was on about a month ago.
• 1:03
  Speaker 2: It was episode 376.
• 1:05
  Speaker 2: So I suggest that you go back and listen to those two episodes as well.
• 1:09
  Speaker 2: So with that, jared, thank you for being here and welcome to the show.
• 1:12
  Speaker 2: Thank you so much, greg, it's a pleasure to be here today.
• 1:17
  Speaker 2: Great.
• 1:17
  Speaker 2: So let's start off by having you tell a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, a few things like that, absolutely so although Payark is a US-based company, I am a Canadian, so born and raised in the great city of Toronto, ontario, grew up here, went to school here.
• 1:32
  Speaker 3: I have lived here pretty much my entire life, actually my entire life.
• 1:35
  Speaker 3: I do spend quite a bit of time on the road, being headquartered in Greenwich and we have an office in Bulgaria, so I'm probably on a plane about three, four times a month, which I like.
• 1:46
  Speaker 3: I get to spend time with the folks in the office.
• 1:48
  Speaker 3: I wish I was closer, I could be there every day, but it is what it is.
• 1:50
  Speaker 3: So I am the Canadian portion and, I guess, the nicer part of the company, as people would describe Canadians.
• 1:57
  Speaker 2: Great Thanks for sharing that.
• 1:58
  Speaker 2: So we're going to start off with some good news.
• 2:00
  Speaker 2: So recently announced, I guess, that ETA has awarded you guys the ISO of the year, so that's a great achievement.
• 2:08
  Speaker 2: And as someone who pays a lot of attention, obviously, to payments in fintech, I see the Payark name being out there much more lately, I'd say in the last six months or so, so maybe tell the audience who is Payark.
• 2:21
  Speaker 3: Well, thank you so much for that, greg, and I want to just touch on that award a little bit because, for me especially, that is something that I'm very proud of.
• 2:28
  Speaker 3: I've been attending ETA Transact for probably about 15 years I'll get into my history a little bit later, but I was there, you know, as an attendee.
• 2:36
  Speaker 3: And then when we started PayArc, we had a small little booth and over the years it's grown and grown and grown and I've seen all these great companies win that award, and to win it ourselves, I think, is a huge achievement and it's such a testament to the employees at PayArc whether it's our operations team, our marketing team, the finance team, the sales team.
• 2:53
  Speaker 3: Everybody has really put in such a ton of work and it's nice to see that being recognized.
• 2:58
  Speaker 3: So who is PayArc?
• 2:59
  Speaker 3: Great question.
• 3:00
  Speaker 3: We are a full service, wholesale payment processor.
• 3:03
  Speaker 3: We focus on two main things, I would say.
• 3:05
  Speaker 3: Number one is our service and support.
• 3:07
  Speaker 3: That is something that we really, really focus on and we strive to be the best in.
• 3:12
  Speaker 3: Second part is our technology.
• 3:13
  Speaker 3: How can we enable payments for our partners through technology, something we're constantly developing, we're working on.
• 3:19
  Speaker 3: We've got a great team in there and I think that what really sets us apart and what really built the foundation for the business is an ethos that we've developed.
• 3:28
  Speaker 3: We call it the PayArc way.
• 3:29
  Speaker 3: It's just a way of doing business where we put the customer first.
• 3:33
  Speaker 3: Regardless of the interaction with our customers, we strive to be the best part of their day.
• 3:38
  Speaker 3: Sometimes that's challenging when we're dealing with issues, but we really care about them.
• 3:43
  Speaker 3: We care about their business and we look to develop relationships with both our merchants, our sales partners, the ISV partnerships, and we want long-term relationships with them.
• 3:52
  Speaker 3: We're not looking to do business for a short amount of time.
• 3:55
  Speaker 3: We want to speak to them in five years from now and say, hey, how great have the last five years been.
• 3:59
  Speaker 3: I mean, I think that's really what we've strived to become the best at.
• 4:04
  Speaker 2: Okay, and again, congratulations on that award.
• 4:06
  Speaker 2: And I'll say as someone who's been around payments if you can put service in your customer first, you're ahead of a lot of your competitors out there for sure.
• 4:14
  Speaker 2: So let's talk about your meeting, zach Martinez.
• 4:18
  Speaker 2: So maybe tell us how you met and maybe kind of what strengths he had that brought to the table and that you guys decided to partner up on this.
• 4:26
  Speaker 2: That's a great question.
• 4:28
  Speaker 3: It's like the origin story of Parak.
• 4:29
  Speaker 3: So Zach actually had a very large online business and he was processing payments online.
• 4:34
  Speaker 3: He ran into some difficulties.
• 4:36
  Speaker 3: He wasn't working with the right provider.
• 4:38
  Speaker 3: At the time I was actually an agent in the business.
• 4:41
  Speaker 3: We can touch on that a little bit later but we got connected and through that relationship, you know, it became very friendly.
• 4:47
  Speaker 3: I really worked hard to service his account.
• 4:49
  Speaker 3: I think that he saw that and we were successful at it.
• 4:52
  Speaker 3: We worked in that agent-merchant relationship for quite some time and through that we became friends.
• 4:56
  Speaker 3: He was looking to kind of wind down that business.
• 4:59
  Speaker 3: Zach is very entrepreneurial.
• 5:00
  Speaker 3: He's always looking at new opportunities and he loved the payment space.
• 5:08
  Speaker 3: As he learned more about it through our interactions, he thought there could be a great opportunity in there.
• 5:10
  Speaker 3: So through the friendship, we developed a business partnership and we incorporated the company in 2016, but we processed our first transaction on October of 2017.
• 5:17
  Speaker 3: I remember that day very well.
• 5:20
  Speaker 3: Being an agent, you're not necessarily exposed to a lot of the back office and all the other things that go into a payment processor.
• 5:26
  Speaker 3: So in Zach and I'll just give you some background too it's interesting when we work with merchants, you get underwriting files.
• 5:32
  Speaker 3: So I requested a bunch of documentation from him bank statements, all this different stuff and he came back with the most organized package I have ever seen.
• 5:41
  Speaker 3: It was labeled in folders.
• 5:43
  Speaker 3: It was like if an underwriting package could be a work of art.
• 5:46
  Speaker 3: That was it.
• 5:46
  Speaker 3: So I knew right away that this is somebody that I really thought knew what he was doing and he's just an incredible operator.
• 5:52
  Speaker 3: So I think the partnership worked really well.
• 5:54
  Speaker 3: I was on the business development side.
• 5:56
  Speaker 3: Having been in the business, I had relationships with both merchants and agents and he just got it right away.
• 6:01
  Speaker 3: Incredible operator just really got in there.
• 6:04
  Speaker 3: Doug learned the business, got into the details and it's been a fantastic partnership ever since.
• 6:09
  Speaker 2: Okay, so when did the idea of creating the company come about?
• 6:14
  Speaker 3: I would say it was about maybe end of 2015,.
• 6:15
  Speaker 3: Beginning of 2016.
• 6:17
  Speaker 3: We started talking about it.
• 6:18
  Speaker 3: He was looking to wind down his business.
• 6:20
  Speaker 3: Agent business is a fantastic business, but at the time I was like wanting to do a little bit more.
• 6:25
  Speaker 3: I wanted to build something that we could be proud of, that did things a little bit different than the other processors that we worked with on a regular basis.
• 6:33
  Speaker 3: What we found is, as these processors got larger and larger and larger, the customer service started lacking.
• 6:40
  Speaker 3: They weren't paying attention to the merchants, agents weren't getting the service that they received and, being an agent, that was something that was affecting my business on a regular basis.
• 6:47
  Speaker 3: So we said, okay, how can we start a company that does everything that they do, but try and do it better and really focus on that customer first?
• 6:55
  Speaker 3: So that was how we started Payark and that's kind of been how we've been doing it ever since.
• 7:14
  Speaker 3: Okay, and what were those early startup years like?
• 7:16
  Speaker 3: Maybe?
• 7:16
  Speaker 3: What were the key goals?
• 7:16
  Speaker 3: What were the driving factors that emerged during that time?
• 7:19
  Speaker 3: As people were like I've never heard of PayArk, why would I work with PayArk?
• 7:22
  Speaker 3: I did have some existing relationships, who knew me, who trusted me, that were able to come on board pretty quickly, and I'm proud to say that a lot of those are still working with us today.
• 7:31
  Speaker 3: So, going back even to our early years in 2017, they're still partners with us and that's something that I'm extremely proud of.
• 7:36
  Speaker 3: So it was tough.
• 7:38
  Speaker 3: We had to fight for every single opportunity, but we did a good job of that and we celebrated every win throughout the company and you know I really enjoyed those years.
• 7:46
  Speaker 3: I look back on that and it's some of the best times in my life.
• 7:49
  Speaker 2: So do you remember who your first?
• 7:50
  Speaker 3: hire was Absolutely.
• 7:52
  Speaker 3: It was Keith McNeely, our chief risk officer.
• 7:54
  Speaker 3: Now I think he you know he met with us.
• 7:57
  Speaker 3: We had a small Regis office in Greenwich, connecticut.
• 7:59
  Speaker 3: We didn't have much.
• 8:00
  Speaker 3: He came to meet with us and he believed in us.
• 8:03
  Speaker 3: He listened to what our plans were.
• 8:05
  Speaker 3: Now he's been a huge part of this company ever since.
• 8:07
  Speaker 3: He's just a.
• 8:08
  Speaker 3: He's a great guy, understands the business really well, works with the entire team and he's grown with us as well.
• 8:13
  Speaker 3: So Keith was number one and then another person, denise Bao, who was our I guess our second guy.
• 8:19
  Speaker 3: She worked with me on the agent side.
• 8:21
  Speaker 3: She was helping with the applications and all the administrative work and she's still with us today and is a huge part of the team.
• 8:27
  Speaker 3: So I would say those two would be the first hires.
• 8:30
  Speaker 3: I'm not sure exactly who came first, but they were both involved from the first day, from day one.
• 8:35
  Speaker 2: Awesome, awesome.
• 8:35
  Speaker 2: So, looking back on nearly a decade of being in business, what type of partners have sort of become your niche and are there any major success stories that have come out of those partnerships?
• 8:49
  Speaker 3: Yeah, absolutely.
• 8:50
  Speaker 3: What we do really well is the agent part of this business.
• 8:52
  Speaker 3: Because we focus on service and support, we develop strong relationships with our agents.
• 8:57
  Speaker 3: I want to understand the types of merchants they work with.
• 8:59
  Speaker 3: What are their pain points?
• 9:00
  Speaker 3: Is it a pricing issue?
• 9:02
  Speaker 3: Is it a service issue?
• 9:03
  Speaker 3: How do they go and get business?
• 9:04
  Speaker 3: How can we support them, both through operationally or through technology?
• 9:09
  Speaker 3: And I think the biggest success story in that side is that these agents stay with us.
• 9:12
  Speaker 3: We have very, very, very low agent turnover, and I think that's a testament to how we do business and how we strive to have the best relationship possible.
• 9:21
  Speaker 3: Are there going to be issues?
• 9:22
  Speaker 3: Of course there is, but I think that what really matters is how you work through those issues together, and that's always what we've done.
• 9:29
  Speaker 3: We're transparent, we're very honest with our partners and we expect the same from them, and that works well and we've done a really good job.
• 9:37
  Speaker 3: So our agent base has grown considerably as we've scaled.
• 9:40
  Speaker 3: It's a lot harder to get to know everybody, like we did in the early days, but we do our best and I think we've done a really good job at that.
• 9:47
  Speaker 2: Okay, are there certain verticals within the agent niche, or is it pretty much just any vertical?
• 9:56
  Speaker 3: Yeah, it's across the board.
• 9:57
  Speaker 3: A lot of agents focus on retail shops, pizza restaurants, nail salons.
• 10:00
  Speaker 3: We love that business, we'll support it.
• 10:02
  Speaker 3: Some of our agents focus only on card, not present business.
• 10:04
  Speaker 3: Great, we love that business and we build technology to support them.
• 10:07
  Speaker 3: A gateway, a platform, really.
• 10:09
  Speaker 3: It's online applications.
• 10:11
  Speaker 3: However, we can use technology to make their lives easier and create less friction in the boarding and the underwriting process.
• 10:19
  Speaker 3: That's what we focus on.
• 10:20
  Speaker 3: Our goal is to let them go out there and sell.
• 10:26
  Speaker 3: Let us manage everything else.
• 10:26
  Speaker 3: That's what they're good at, and we're good at the back end and we're good at enabling payments for them.
• 10:30
  Speaker 2: Okay, all right.
• 10:30
  Speaker 2: Well, now maybe looking ahead, how are you adapting to kind of this increased size, this increased awareness in the industry and launching new products?
• 10:42
  Speaker 3: So a great question and I think training is a huge part of that, getting the staff on board on how we do things.
• 10:48
  Speaker 3: I mentioned the PayArc way.
• 10:49
  Speaker 3: It's a part of our culture, putting that customer service first.
• 10:53
  Speaker 3: The way I see it.
• 10:53
  Speaker 3: Like I said, the way I see it is we want to be a company with a soul.
• 10:56
  Speaker 3: We don't want our partners to think of us as a corporate entity that everybody's just a number.
• 11:00
  Speaker 3: We corporate entity that everybody's just a number.
• 11:02
  Speaker 3: We really want to have a soul behind it.
• 11:03
  Speaker 3: When they think of Payark, they feel like it's a part of their lives, somebody that cares about them, and that's kind of what we strive to do every day from right, from the top all the way down to the bottom.
• 11:15
  Speaker 3: And then again technology.
• 11:16
  Speaker 3: You mentioned John Minitaglio on the path previously in the introduction Developing technology.
• 11:19
  Speaker 3: He's a really intelligent guy, has some great ideas and has really shifted the way we think about technology and how we can support our partners.
• 11:27
  Speaker 3: Isv is a big growing vertical for us, so creating SDKs, api documentation that works and that allows our ISV partners to easily integrate to us is fantastic.
• 11:39
  Speaker 3: Just the other day we had a partner who sent this email that said, hey, this was one of the easiest integrations I've ever done.
• 11:45
  Speaker 3: I love hearing that, because that allows them to focus less on the technical work, more on doing business together, so I think we've done a really good job at that as well.
• 11:53
  Speaker 2: Okay, and obviously, as I mentioned, your awareness in the industry is increasing.
• 11:59
  Speaker 2: Any kind of growing pains or positivity coming out of that?
• 12:03
  Speaker 3: Yeah, definitely a lot of positivity.
• 12:05
  Speaker 3: People are contacting us every day.
• 12:07
  Speaker 3: I'm getting messages on LinkedIn.
• 12:09
  Speaker 3: People I haven't spoken to in years are reaching out.
• 12:11
  Speaker 3: So that's really cool to see and I love that and happy to support them.
• 12:14
  Speaker 3: You know, in terms of pains, look as you grow and at the speed that we're growing it definitely there are scaling issues, but it comes down to training Training our employees on how to do business, on the tools, how to support the merchants and constantly doing that, engaging with them.
• 12:29
  Speaker 3: We have mentorship programs within the company so people join the company, can work with experienced people to understand how we do business and how we do it differently from some of the other processors out there.
• 12:40
  Speaker 2: Okay, and you mentioned training.
• 12:41
  Speaker 2: I'll just touch on that, because are you speaking more of internal training or is it also like training for so?
• 12:49
  Speaker 3: it's mostly internal training.
• 12:50
  Speaker 3: There's a lot of tools out there for external agents for training.
• 12:53
  Speaker 3: We do have a ton of content training on our own technology.
• 12:56
  Speaker 3: We do and we provide them with that.
• 12:59
  Speaker 3: We have a ton of webinars, training sessions, so we do that for our own technology business dedicated people who understand and know their specific agent, so they know that, whether it's pizza restaurants, nail salons how can we support them internally?
• 13:18
  Speaker 3: What tools do we have at Peric that can really work with their business and allow them to be more successful?
• 13:24
  Speaker 2: Okay, and you mentioned previously and as well as I did, we had John Minitaglio on the show not too long ago and he talked about AI and payments, and obviously that's a conversation that I'm having on almost every episode that I do these days.
• 13:38
  Speaker 2: So maybe can you talk about what you guys are doing with AI, the value, the potential of Pi, maybe talk about that solution and maybe how it's positioning PayArk with its partners.
• 13:51
  Speaker 3: Yeah, absolutely so.
• 13:52
  Speaker 3: It's really cool.
• 13:53
  Speaker 3: Ai is definitely a buzzword.
• 13:54
  Speaker 3: Everybody's talking about it.
• 13:55
  Speaker 3: I've used it in my daily life for a lot of different things and it's fantastic, but how do we apply that to payments?
• 14:00
  Speaker 3: So a couple of things Churn prediction so being able to predict when a merchant is going to leave us is huge.
• 14:07
  Speaker 3: That's something that we're developing and we're seeing a lot of success with.
• 14:09
  Speaker 3: That makes a lot of sense to our business.
• 14:11
  Speaker 3: I think everybody is dealing with churn issues.
• 14:13
  Speaker 3: It's a very competitive space.
• 14:15
  Speaker 3: You have a store.
• 14:16
  Speaker 3: How many times a day does somebody come in there to just try and sell them?
• 14:19
  Speaker 3: Credit card processing, reduce rates.
• 14:20
  Speaker 3: What's interesting, though, is it's not always pricing.
• 14:23
  Speaker 3: That is the churn right.
• 14:24
  Speaker 3: There's a lot of different factors that come into play here, but understanding when that merchant may may leave us is something that we think is extremely valuable.
• 14:31
  Speaker 3: Also, from a risk level, there's a lot of economic issues at play, and sometimes merchants have issues leads to things like ACH rejects losses.
• 14:39
  Speaker 3: So, as a company, how do we protect ourselves from that?
• 14:41
  Speaker 3: So using AI and applying it to that is fantastic.
• 14:48
  Speaker 3: What I like and coming from the agent space, is self-service agent tools, so being able to go in there, analyze a statement or create proposals tools.
• 14:54
  Speaker 3: So being able to go in there, analyze a statement, create proposals, understand what you're going to make on a particular deal based on your pricing with PayArc and the proposal that you send out, I think is incredibly powerful.
• 15:01
  Speaker 3: So those are the tools that I think are really going to propel PayArc to the forefront of AI and payments, and it's continued.
• 15:09
  Speaker 3: We're coming up with new ideas every day on how we can take Pi and really apply it to our business, both from an internal perspective, but also from an external perspective.
• 15:18
  Speaker 3: How do we support our partners better using AI?
• 15:21
  Speaker 3: And John has been incredible at doing that and I'm really excited about how that's playing out in the business today.
• 15:27
  Speaker 2: Okay, so as we start to close out the show, just wanted to see if there was any other things you wanted to discuss.
• 15:34
  Speaker 2: Anything we missed, anything you want to touch on again before we wrap up?
• 15:38
  Speaker 3: No, I really appreciate the time.
• 15:40
  Speaker 3: This has been a great conversation.
• 15:41
  Speaker 3: Payarc.
• 15:42
  Speaker 3: What we stand for is service technology and really being, like I said, the best part of their day.
• 15:48
  Speaker 3: Yes, issues come up.
• 15:49
  Speaker 3: There's going to be concerns on all sides, whether it's risk-related, customer service-related.
• 15:54
  Speaker 3: We take our partners' feedback and we apply that to our day-to-day business, and I think that is something that's very important.
• 15:59
  Speaker 3: Also, just to reiterate, we're looking for long-term relationships.
• 16:03
  Speaker 3: We want partners to be with us for a long time, so I really value that.
• 16:07
  Speaker 3: I'm a relationship guy.
• 16:08
  Speaker 3: I think a lot of people in the company are relationship guys and we've developed that with our partners, so I'm really looking forward to seeing everybody at ETA Transact.
• 16:16
  Speaker 3: I think it's going to be a fantastic show, especially for us.
• 16:18
  Speaker 3: I'm really excited for the ISO of the Year award.
• 16:20
  Speaker 3: It's a great way to celebrate, but I also think we're just getting started.
• 16:23
  Speaker 3: Yes, there's been some buzz about us, but the future is looking bright and we're always looking to grow and this is yeah, that's a business.
• 16:30
  Speaker 2: Awesome.
• 16:30
  Speaker 2: Well, I think that's a great way to wrap up the show.
• 16:32
  Speaker 2: So, Jared, thank you so much for being on today.
• 16:34
  Speaker 2: I really appreciate your time, my pleasure.
• 16:36
  Speaker 2: Thank you so much, greg.
• 16:37
  Speaker 2: I really appreciate it.
• 16:38
  Speaker 2: Yep and to all your listeners out there.
• 16:40
  Speaker 2: I thank you for your time as well, and until the next story.
• 16:55
  Speaker 1: Thank you for joining us today as we discussed how Payark is leveraging AI to transform payments.
• 16:57
  Speaker 1: To learn more about Payark, visit wwwpayarkcom.