Latest / The Payments Shed / Ep. 52 - From Race to the Bottom to Loyalty at the Top: Re-Thinking Value Creation in the ISO Payments Market with Zeal

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Ep. 52 - From Race to the Bottom to Loyalty at the Top: Re-Thinking Value Creation in the ISO Payments Market with Zeal · The Payments Shed

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  Welcome to the Payment Shed Podcast, the weekly podcast that
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  dives into the big topics, trends and people shaping the
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  world's of payments, fintech and business leadership Of your two
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  Co hosts, myself Grant Evans and Justin Hanna.
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  Welcome to another episode of the Payment Shed Podcast.
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  Today we are joined by Omar Abeed, CEO and Co founder of
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  Zeal. Omar, welcome to the payment
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  show. Thank you.
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  Thank you, Grant, and thank you Justin for having me.
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  Super excited for this one. We're excited to have you on and
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  we always ask our guests before we kind of get into it, just for
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  a little bit of history on yourself, your career in
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  financial services, payments, whatever it might be.
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  Can you just tell us a little? Bit I was, I was very naive
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  getting into financial services. I, I wouldn't change anything
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  about it, but definitely, and I don't see myself doing anything
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  else for the rest of my life. So I'm, I'm very, very lucky.
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  I got myself into financial services, graduated school from
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  Egypt, moved to the UK in 2012, been in the UK since.
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  Worked as a mechanical engineer and then at some point I was
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  selling energy door to door with one of the entrepreneurs I met
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  at the Wolf of Wall Street event.
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  And at that time I was due to go to work for Rolls Royce
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  Aviation. Met with Alex Hall, asked me to
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  go and work with him, live with him and his family.
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  Super inspiring story. So I decided actually to go with
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  him and the one of his businesses was an energy
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  business and we were selling that.
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  I was selling door to door energy to merchants.
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  I was learning so much literally just on again approaching
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  merchants what to sell to them and selling a commodity.
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  And then at some point when I went back to university to do my
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  masters etcetera and entrepreneurship at University
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  of Bath, I came across a loyalty app and I hate loyalty programs.
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  I'm like, I'm buying that coffee.
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  And the lady that the share was like, oh, do you have our
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  loyalty app? I was like, no, no, I don't use
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  loyalty programs. She's like, oh, it's very easy.
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  It's just a QR code on the loyalty app.
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  I was like, fair enough, downloaded it and I saw that
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  this app consolidated all the loyalty programs on one
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  platform. I was like, oh, interesting that
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  it doesn't take a genius to think of that instead of
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  carrying like hundreds of loyalty cards.
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  And I reached out to the founder, It's your wallet,
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  Michael Wolff. I reached out to the to the
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  founder of your wallet and I asked him to mentor me,
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  etcetera, to build the same thing for the Middle East.
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  We ended up doing it and eventually I found out that the
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  only way the merchants were knowing who their customers were
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  was via the loyalty app. The card machine does not tell
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  them who the customer is. So I would have thought the card
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  machine tells you who the customer is, but you still need
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  the loyalty app separately. And as soon as I found out, I
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  was like, whoa, there's a huge, there's a much bigger problem to
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  solve for. It's not loyalty.
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  And so we ended up putting that business side pivoted and doing
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  what we. Did Zeal was born?
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  Zeal was born. Yeah.
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  Very, very good I. Suppose as part of that, just to
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  unpack that a little bit more, what do you think then kind of
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  is the challenge that the whole industry is recognising as the
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  minute you, you said they're around, they didn't know who
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  their customer was? Let me let me give you an
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  example. Imagine, put yourself in a
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  merchant's shoe, right? You own a coffee shop, people
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  come drink coffee at your store and you have no idea who your
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  customers are. The only way you know understand
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  who your customer is is just by recognizing their face.
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  You don't know my name, you don't know anything.
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  One of the most annoying things that happened to me, I
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  absolutely hate it, is with the all different restaurants we go
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  to. Some particular restaurants I
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  particularly like and if I call them by phone, they don't know
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  who I am. They don't know they're speaking
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  to one of their very low customers because that phone
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  number is not linked to ACRM that they've got.
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  And because the card machine, when I tap my card, the, the
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  card machine doesn't tell them. This is Omar, who is one of your
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  very low customers, right? So that's the thing with
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  physical retail or restaurants. You, you don't know your
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  customers, you're not able to recognize them on the phone,
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  make exceptions for them on bookings.
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  That's particularly important for bookings.
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  Hence OpenTable solves that problem particularly.
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  But if you think about it as, again, as a merchant, you need
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  to know who your customers are to be able to retain them.
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  Reach out to them. If they don't show up in 2-3
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  weeks, send them a free coffee to get them back.
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  But the challenge has always been for loyalty programs and
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  the conversion. So let's assume again you're a
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  coffee shop, you have 100 customers coming into your
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  store. You'll only be able to convert
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  20% of them to use your loyalty port.
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  So you still don't know the 80% of the customers that aren't
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  using the loyalty port. And that's where I'd like to say
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  that's where we come in because we run silently in the
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  background of the terminal. We identify 100% of the
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  customers and it's our opt in rates is around 86%.
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  So it's it's it's AI think it's a game changer in just in the
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  experience, not even for payments.
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  It's just the actual checkout experience, Yeah.
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  And you guys work quite prevalently with acquirers in
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  the payments ecosystem. There'd be Isos in that market.
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  And with the ISO landscape, we've traditionally seen this
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  real race to the bottom. It's all about price, it's all
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  about margins and maybe not thinking about some of the value
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  added service type products that that can be wrapped around that
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  go to market strategy, particularly in hospitality
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  retail, those sort of environments.
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  So why do you think it's been so difficult for Isos to
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  differentiate meaningfully kind of beyond rates and terminals,
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  basic services and thinking about things like loyalty
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  historically? I wish I could tell you the
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  answer. I wish I could be there with the
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  chief strategy officer and the strategy teams of of the big
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  acquires payment companies sell payments like that's what the
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  that's their bed and butter. They're not marketing companies.
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  They're not data companies, they're not like this.
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  And and you cannot expect them to sell anything other.
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  You won't expect the bank to do anything other than banking
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  services. And do you get what I mean?
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  So for and that's where partnerships come into play.
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  That's where integrations come into play for payment acquires.
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  When we go speak to payment acquires and we've had some tell
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  us, oh, it's in our road map, we'll build our own XYZ value,
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  our service, but it takes them super long.
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  It's it's, it's a ship. It's like a, a large ship in the
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  sea. It takes them ages to do
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  anything or build anything, etcetera.
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  And they need to AB test a lot of the what we've done or go
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  through a lot of the developments.
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  It's way easier to partner with at startup or scale up that just
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  you plug in an API or something and then you avail the, the
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  technology. So I think to expect payment
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  acquirers to develop loyalty or value added services is I would
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  say a bit unfair for them for the for the structure of their
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  corporates and that's where they need the the new value added
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  services I. Suppose you you ask them to do
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  something they don't know, right?
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  So, so why is it ever going to work?
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  And that we talk about payments as a bit of a commoditized
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  market. The way that they can try to
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  improve is by partnering with businesses that are experts and
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  what they do. Absolutely don't by the way,
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  like again. And, and for us, we cannot work
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  without acquires. Like we cannot go to market
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  without acquires and without Isos.
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  And the Isos are rarely software developers themselves.
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  They're just reselling what the acquirer is giving them and, and
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  making money off the rates, right.
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  So we need these partners in our value chain to succeed.
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  We go to market by them. So they do play a huge role.
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  They have access to hundreds, if not thousands of merchants, but
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  and we just plug into that, we just plug into that and we avail
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  ourselves across their terminals and everyone's happy.
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  So that's, that's how I like to frame it.
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  Like with that layer extra layer on top of your current merchant
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  or? Would that be impossible without
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  the transition to kind of Android terminals and open
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  source? I was I was thinking whether
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  that should be on on my shelf of shame that you but I decided
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  not, but that was going to be one of the things I I recommend
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  Linux terminals and Android terminals makes it a lot easier
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  to put anything on top of it. I remember when I first started
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  and we were building Zealand, I was selling again, investors,
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  we're going to put something on the card machine.
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  Everyone's like this is a super secure device.
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  You cannot put anything on it XYZ.
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  And that's the, that's what you feel when you look at the Linux
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  device, right? But now with Android, I think
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  that's changing the game completely.
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  And I'm super excited again for the growth of Android devices
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  globally because you start integrating with the payment
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  software on the Android device, you avail yourself to all the
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  different payment providers. It's crazy.
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  When you think about it as well, though, isn't it because it's
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  the most interacted piece of absolutely, right, like
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  interacted with piece of kit out there, right?
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  The customer is always engaged with that device.
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  So you want that to be your your sort of non black box, right?
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  That is the the the most data rich piece of hardware you could
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  probably access, right? And I'll, I'll, I'll give you a
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  crazy example. You go online, you you buy
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  something online on e-commerce and you put your name, your
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  e-mail, your address, you check out yesterday, I was setting up
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  one of those new agentic AI browsers and I uploaded
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  obviously my cards security to my Google Wallet, etcetera,
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  linked it to my pass key. So again, I want everything to
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  be super seamless. And then I started testing with
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  the agentic AI go purchase XYZ for me, etcetera.
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  Incredible, incredible, incredible.
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  Now compare that to an in store experience.
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  You go in store, you tap your card, you leave the store.
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  The merchant has no idea who you are.
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  They don't know if you're a new customer or unless you have a
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  separate loyalty program and you have to do a separate step on
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  top of that. Sky QR card to do Starbucks or
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  something? It's ridiculous.
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  It's we're, we're talking about again that age of AI, agentic AI
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  and we're still expecting customers to do a separate step
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  to get the loyalty stamp. Do we think that do we think
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  that merchants and businesses should be using loyalty as more
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  of a market employee or marked in as part of a loyalty ploy?
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  So we are merchants have to. So I'll tell you our findings.
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  I'll, sorry, I'll answer that or with a bit of some data or what
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  we've seen in the market. Merchants will use loyalty if
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  it's free of charge and until they see an ROI from it, but
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  they will not be willing to pay for loyalty upfront.
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  And, and that's what we've seen and, and there are so many
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  different loyalty providers out there and very successful ones.
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  You've got Magic, SAMP, embargo, all of these different players
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  in the market, but I'll challenge something here and
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  Zeal included. How many billion dollar loyalty
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  apps are out there? I would almost say 0.
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  None. And it's not it's not a
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  coincidence, right? And it's because again, going to
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  my point of loyalty actually does not sell in terms of pay
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  upfront SAS fee to retain your customers.
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  No, I want to retain my customers first.
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  I as a merchant, I want to be able to extract the data to get
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  them back and then I'll give you money once I hit a certain
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  threshold. And hence we, we go to Isos, we
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  give them, we, we give them the value add service for free.
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  We don't make any money actually until the merchant reaches a
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  certain credit limit and then they see certain value and then
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  they start paying. So, and that's something we've
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  seen again, we're going to market with merchants and Isos.
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  We, we've priced it like that to, to scale.
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  Like our main way to monetize the data behind the loyalty is
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  then when we go to FMCGS like for example, the likes of
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  Coca-Cola and they start running rewards when you buy Coca-Cola
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  in store at supermarket X. Because again, going back to
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  what we were just saying, you go to a supermarket, you pay on the
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  terminal, you leave. Not only does the supermarket
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  not know who you are, Coca-Cola has no idea who just bought that
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  Coca-Cola. So it's a goldmine.
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  It's an untapped goldmine of data that again, back to your
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  question, no one has unlocked and I think no one is unlocked
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  because of previously Linux terminals made it super hard to
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  unlock. Visa, MasterCard don't have
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  access to this data. They don't know what you've
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  bought in store because they're not linked to all the different.
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  Because your software is Oracle EPOS.
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  Now it's. Just kind of crazy when you say
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  it out loud as well, right? You'd expect at this point, you
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  know, 2026 now you'd have that. I mean, loyalty for me is it
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  drives my, it drives me up the wall, to be honest.
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  I was in a coffee shop this morning.
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  They've gone from a stamp card to putting your name on the wall
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  like your cards, like you had your name and then they had your
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  physical card and it was stuck on blue tack.
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  And then takes me like, yeah, that's me.
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  It was a full card. I'll have his free coffee like
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  it was. And now today they've got like
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  a, it looked like a staff chip card.
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  And the lady in front of me in the coffee shop and train
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  station just tapped her phone on this.
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  I don't know what the brand was, Didn't manage to catch it, but
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  the guy behind the thing said, oh, you've got that.
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  And then she like tapped her phone on it and she had her app
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  open. Some points went on.
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  I say there's so many different things.
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  I mean, Nige for me, IT put physical loyalty cards on his
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  shelf with shame, right? And I couldn't agree more.
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  Like Hotel Shakala bought some stuff there at Christmas.
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  Still using a paper here. Have you got our loyalty card?
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  No, here's a piece of like a little cardboard.
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  My Barber has a hard one. I'm like, why are you all still
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  using this? There's so many platforms out
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  there that can digitise this journey.
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  You digitise it, I'll have it in my wallet.
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  There's no, but I think they're coming back.
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  To, to, to investing in it, right?
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  Which, and the way you've explained it, I mean, it's
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  absolutely perfect. Why are they not doing it?
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  I think people are not seeing in the media hour why or they've
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  not seen it anywhere and they don't want to be the first to
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  have tried to do it. You know who's doing it?
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  12 Square. They just launched an update
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  recently to their terminals where when you tap your card on
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  the Square terminal, it drives back using NFC.
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  It pops up on your Apple Wallet or Google Wallet saying opt in
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  to that loyalty program. Super.
• 15:29
  It's cool. But what are the choirs going to
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  do to compete with Square? Yeah, what's what are what's
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  their strategy? What's what are who are they
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  plugging in who? What's the data they're
• 15:41
  collecting? Band that Square, the fintech,
• 15:44
  what are the eyes is going to do to be able to compete with
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  Square and all the different fintechs.
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  They're losing a lot of merchants to all these new
• 15:51
  fintechs. So and again, they need value
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  out services success for us at Zeal is going to be where when
• 15:59
  we net zero the expenses or the commissions that the merchant
• 16:03
  has to pay to acquire. Yes, we're adding so much value
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  to the transaction making getting the new revenue streams
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  to the merchant that it's almost nothing zero to to their payment
• 16:16
  it. Becomes a pay as you go product,
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  right? Because you're only paying when
• 16:19
  you when your customers are paying.
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  And can the acquirers, the Isos kind of pivot this to be an
• 16:25
  enablement tool for their sales team?
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  Because we've talked about that race to the bottom and the
• 16:29
  pricing, it's all about price, price, price.
• 16:32
  If you're adding in a loyalty product, that's seamless.
• 16:36
  And you can actually start to talk in a language to merchants
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  around, OK, well, what if the loyalty program drives a 5%
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  upside or, you know, it's, it's getting away from that rate
• 16:44
  based. How much do your card payments
• 16:46
  cost? It's like, OK, we're not just
• 16:48
  doing payments, we're doing loyalty as well.
• 16:49
  Now, by the way, here's a similar business we've done this
• 16:52
  for and these are the results we've seen, right?
• 16:53
  And that's the dates you talk about and you can back it up and
• 16:55
  evidence it. A. 100% and again, merchants
• 17:00
  when it comes to payments, they're they look at it as a
• 17:03
  pure commodity and for them, when you look if you remember
• 17:07
  what was happening with Dojo and they were hyper scaling when
• 17:10
  Steve Jason was leading that merchants wanted the white
• 17:14
  terminal, yeah the white terminal with the good rates.
• 17:19
  That's that's what they were looking at, right.
• 17:22
  So I'm sorry, I I forgot it's where you were making a point.
• 17:27
  I was. Talking more about how they use
• 17:28
  it as an enablement tool. So you know, if you're, if
• 17:30
  you're rolling out with zeal and alongside an acquirer and ISO
• 17:33
  and it's like, OK, well, we don't just do a card term.
• 17:36
  We've got your nice white packs terminal.
• 17:37
  We've got a nice EPOS setup. That's the, the hardware, that's
• 17:40
  the, the rate element. What what you, what's your
• 17:43
  message to them around OK, this is how you also market loyalty
• 17:46
  alongside that? So again, thank God, if I go
• 17:50
  back to my, when I was selling energy and going door to door to
• 17:53
  merchants, if I was selling payments back then and I had
• 17:59
  that payment device today without zeal.
• 18:02
  If, if that device doesn't have zeal on it, I, I just go open
• 18:05
  the conversation with what's your payments rates?
• 18:09
  What's your energy rates? How much are you paying kWh?
• 18:11
  How much is Dojo giving you? Or I'll give you a much better
• 18:15
  rate. That's that's normally how it's
• 18:17
  like right now. If I have zeal on the payment
• 18:21
  device, it's more of this terminal can it's more of this
• 18:27
  terminal can have your loyalty program on it.
• 18:30
  You can do marketing on it. You can link it to Instagram.
• 18:32
  You can run ads on it. Coca-Cola will give you funding
• 18:35
  on it and it also does payments. So you're selling value.
• 18:40
  And then obviously, like anyone that looks at the court machine
• 18:43
  knows it processes payments, there's a psychological bit that
• 18:48
  we need to get past that you recognise what you look at.
• 18:52
  Is it headless for the merchants as well so they can they can
• 18:54
  create their own brand for the loyalty program?
• 18:57
  So again, we want to sit in the background.
• 18:59
  So the the the bigger vision for Zeal is to build an
• 19:04
  infrastructure data layer for offline transactions.
• 19:06
  It's the rails. It's the rails perfect.
• 19:09
  I love it. We're literally building the
• 19:11
  data rails for offline payments again, because if you think
• 19:14
  about it, Visa, MasterCard built the payment rates.
• 19:17
  No one has built the data rates. No one knows what coffee you
• 19:22
  drank at this coffee shop. What you paid with all of this
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  That's ISX dot Financial and a big thank you to the team at ISX
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  for supporting the show. It sounds like you want payments
• 20:13
  to be a byproduct of a terminal, as opposed to most merchants see
• 20:18
  the terminal as the only way to take a payment.
• 20:20
  Absolutely. But then that comment around the
• 20:22
  the white device makes me laugh because when I worked for Allied
• 20:24
  Irish Bank many minutes ago, I had one of the first Clover
• 20:27
  devices in the boot of my car, literally like we were the
• 20:30
  Guinea pigs because obviously part of that Fi serve ecosystem.
• 20:33
  So hey, I'd be merchant services.
• 20:34
  We were all given like Clover devices.
• 20:37
  They had one app that worked. Literally it was like the like
• 20:40
  we demoed it and there were like 50 apps on there, but the only
• 20:43
  49 of them only worked in the US.
• 20:44
  But we go out and people like you go to a dentist and be like,
• 20:47
  oh, that would look great on the desk.
• 20:49
  How much is it, £1500? And they would buy it because it
• 20:52
  looked pretty. So it was way more than anything
• 20:54
  else they'd ever had votes wise. But it would look really nice.
• 20:56
  It looked like it came out the Apple Store and they just
• 20:58
  weren't caring that all it could really do was orphan refund at
• 21:01
  that. Time right man, if you think of
• 21:03
  it again, you guys finding this amazing place to host us, you
• 21:10
  didn't look for the cheapest place when you when you go look
• 21:13
  for software for your business, you don't look for the cheapest
• 21:16
  software. You look for a good software
• 21:18
  that you'll get good value from at a good price.
• 21:23
  This is exactly how Isos need to think.
• 21:25
  They need to stop selling cheap, cheap, cheap and they need to be
• 21:29
  selling more of this is the value we're going to.
• 21:32
  Add most Isos will say that's what they're doing right.
• 21:34
  Most ISO say it's not about the money for us.
• 21:37
  It's not like giving the cheapest rate.
• 21:38
  It's about it's like really caring for our customers.
• 21:41
  But but what we also know is that the aquirers are giving
• 21:44
  them Isos more than what they've ever given them in the past to
• 21:47
  try and get more accounts set up.
• 21:49
  So it's being driven by sometimes the acquires to the
• 21:52
  Isos themselves, right? Of course, it has to be led by
• 21:55
  the acquires. Whatever that acquire will give
• 21:57
  the Isos what the ISO will end up selling.
• 21:59
  Yeah, if, if Word Pay doesn't activate us, for example, on
• 22:04
  their terminals, the Isos won't be able to sell us on their word
• 22:08
  pay accounts. So it's always led by the and
• 22:10
  that's where we come in as well with Word Pay and all the
• 22:13
  different acquires. We need to make sure we work
• 22:15
  with all the acquires, but absolutely, I completely agree
• 22:19
  with you. And then if we look at your kind
• 22:21
  of product approach to loyalty and value added services, those
• 22:25
  kind of as products we talked about and we're, you know, from
• 22:28
  a list of point of view, can you explain how the platform works
• 22:32
  within the payment stack? So I'm Grant, I go and buy my
• 22:35
  coffee. At what point am I engaging with
• 22:38
  Zeal in that in that journey? And when that coffee shop has
• 22:41
  built a Zeal app, like what are they benefiting from?
• 22:44
  How are they building out that headless product to interact
• 22:46
  with me as a regular coffee shop user in that in that venue,
• 22:49
  right? Excellent.
• 22:50
  So in some instances, you might not even recognize as a customer
• 22:54
  that there is zeal on the terminate.
• 22:56
  So we're just running literally silently in the background, just
• 22:59
  analysing all the transactions and telling the merchant this is
• 23:03
  a new or returning customer, literally just as simple as
• 23:07
  that. And you'd be surprised as of
• 23:09
  jury, you know, a lot of the acquirers still don't analyze
• 23:13
  that for a lot of the merchants. Merchants want to know how many
• 23:17
  new and returning customers they got.
• 23:19
  Now, Isos can brand zeal and they can wide label zeal to
• 23:23
  themselves. So again, that's another reason
• 23:25
  why you might never see our branding.
• 23:28
  But ultimately the experience on the terminal is you go to a
• 23:33
  store, you pay on the device and normally what happens on the on
• 23:37
  the payment stack right before that transaction goes to the
• 23:41
  host to get processed, that token comes to us and we're, we
• 23:46
  get asked what do we do with it? And then we say, yes, this is a
• 23:51
  registered customer registered in the loyalty program of that
• 23:55
  merchant. Give them a stamp, a second
• 23:56
  stamp or a third stamp, or it's not a registered customer or
• 24:01
  they they're do £2 reward on their 5 LB transaction.
• 24:07
  So everything happens on the actual terminal.
• 24:10
  You don't need to download anything.
• 24:12
  You don't need to install as a customer.
• 24:14
  It's super seamless, super frictionless.
• 24:17
  So again, you tap your card, transaction will go through.
• 24:21
  You'll then either be prompted to sign up to the loyalty
• 24:24
  program. If you're not a member on the
• 24:26
  terminal, that sign up could be literally just opt in, just
• 24:29
  click of a button or you get your second stamp or third
• 24:35
  stamp. Now at redemption, again, when
• 24:38
  you come to redeem a coffee or discount, you tap your card on
• 24:43
  the terminal for a let's say a 10 LB transaction and then it
• 24:47
  says oh, you're due. The actual terminal would say
• 24:50
  you have a £2 discount. You want to redeem it?
• 24:52
  Yes. So you're talking to the
• 24:54
  terminal real. Time everything is instant on
• 24:57
  the terminal. Love that.
• 24:58
  Yes, I want to redeem, tap your card again to pay 8 lbs and then
• 25:03
  that transaction goes to the host to be processed.
• 25:05
  So everything is seamless. Now there is a huge project
• 25:08
  we're working on, which I think is going to be revolutionary in
• 25:13
  payments. We haven't talked about yet at
• 25:16
  all on any of other platforms, but we're having third party
• 25:24
  super large conglomerates fund campaigns and words on the
• 25:29
  terminal. So you might go buy something
• 25:31
  from a supermarket and then you get a reward from again, let's
• 25:37
  say Coca-Cola, saying you've got 5 lbs off or you've got a free
• 25:41
  Coca-Cola and that's funded by Coca-Cola.
• 25:44
  But that's to spend at a certain venue.
• 25:46
  No, it's right there, right there and then for that specific
• 25:49
  transaction. OK, I.
• 25:51
  Suppose it's quite interesting because what you want to be able
• 25:52
  to do if you're a merchant, you're not going to know that
• 25:55
  Grant hasn't come in for three weeks and got a coffee unless
• 25:58
  you were the person serving him. So how can you as a merchant
• 26:01
  like you do in the econ world is I get texts from econ riders.
• 26:06
  Hey Justin, we've seen you looking at this jumper or hey,
• 26:11
  you've not been here for a while.
• 26:12
  Here's £5 off. You want to be able to jet in in
• 26:15
  the face to face world right? Say hey great, not order your
• 26:17
  flat white with with extra milk for three weeks.
• 26:20
  Now have one on us and right now that that that as a coffee
• 26:25
  shop's not been able to recognise that they've not seen
• 26:28
  you in a long time. Yeah.
• 26:29
  And on e-commerce, on e-commerce you've got website cookies.
• 26:33
  You've they, they analyse your IP, you know.
• 26:35
  The customers inside out. Right, literally.
• 26:37
  So how can you do that on Terminus?
• 26:40
  How can you help the merchant because again it's there is
• 26:43
  e-commerce retail and physical retail.
• 26:47
  The physical retail is completely forgotten the the
• 26:51
  they've been sold payments without any innovative value out
• 26:55
  services. That's honestly my humble
• 26:58
  opinion. What's the What's?
• 26:58
  The biggest challenge for businesses not wanting to do
• 27:01
  this? To when you say do this as in
• 27:04
  roll out zeal or do this as an identify the cross.
• 27:06
  Roll out zeal themselves? Well, is it because they don't?
• 27:09
  They don't know it's there. Our, our biggest like generally
• 27:14
  speaking, any, when you were speaking to any of the payment
• 27:17
  companies, our we're very lucky that we have very successful
• 27:24
  rates of closing deals with the paying companies and with the
• 27:26
  merchants. I think I would say the the
• 27:31
  biggest challenge for us in closing a merchant and again,
• 27:35
  keep in mind we don't really deal with the merchants
• 27:37
  ourselves. It's always the ISO that upsells
• 27:40
  it or activates it, but it's raising awareness for the
• 27:45
  merchant that there's got to on the table.
• 27:47
  So you're relying in someone in someone else's sales team to to
• 27:51
  deliver the up sell as well? So we've done, we've built a
• 27:54
  complete new platform and the marketplace for Isos so that
• 28:01
  Isos can track how much money their merchants are making for
• 28:05
  the first again, not all that queries say that real time to
• 28:08
  their Isos, right? They can track a lot of the
• 28:10
  different metrics for their business and they can upload the
• 28:14
  meds and push Zeal because now we're natively integrated with a
• 28:18
  lot of the payment apps or the terminates.
• 28:21
  So they can push Zeal straight to the merchant without selling
• 28:27
  anything or having their salespeople upsell Zeal to the
• 28:29
  merchant. Is there a next evolution for
• 28:31
  this? When we think around in
• 28:34
  hospitality and to a degree in retail as well, now we've
• 28:37
  unattended solutions and self-service is the next step.
• 28:41
  You're going to go onto kiosk systems because that the
• 28:43
  terminal sat there, right? But actually if you're flagging,
• 28:46
  popping stuff up on a big screen like ITSU or whatever, right,
• 28:48
  I'm there. I'm just saying, hey, you got a
• 28:50
  Pokey Bowl free or whatever, like and H&M, some of these
• 28:54
  other claiming retailers are doing self checkout.
• 28:56
  Now again, you've got a great opportunity there where people
• 28:58
  are taking a little bit longer, mainly because they don't know
• 29:00
  what the hell they're doing the first time they get to one of
• 29:02
  these kiosks, particularly in retail, but you're capturing
• 29:04
  them on a bigger screen because the vessel's larger, you can put
• 29:08
  more stuff in front of them. A. 100% on the unattended bit.
• 29:12
  Have you seen any vending machine before with the loyalty
• 29:15
  program? Thanks.
• 29:16
  So no. No.
• 29:18
  And why not? Because you need the cashier
• 29:20
  normally to be there to opt you in as a customer or something.
• 29:24
  And and that really excites me because again, loyalty on
• 29:28
  vending machines. You'd be surprised how many
• 29:31
  returning customers go to the same vending machine because
• 29:34
  it's on their way to work or whatever it is, right.
• 29:37
  And again, it's our role as people in payments professionals
• 29:44
  and payments to avail loyalty for vending machine providers
• 29:50
  within the payment stack. So I think that's something that
• 29:53
  super excites me because again, for the first time you can have
• 29:55
  loyalty within the payment device on the vending machine
• 29:59
  and similarly at petrol stations.
• 30:02
  So petrol stations is another very big one for unattended or
• 30:07
  EV chargers and customer recognition, et cetera.
• 30:12
  It's that's what I'm saying. It's a huge on top market.
• 30:16
  I don't know why I didn't do it for years.
• 30:18
  The the, you know when you pay for your fuel on top?
• 30:20
  Because I started doing literally in like the last six
• 30:22
  months. I've actually been doing this
• 30:24
  for years, but then they're losing opportunity because they
• 30:26
  don't upsell me when I go into the physical environment where
• 30:29
  I'd probably grab a drink or. I've always grab a chocolate
• 30:31
  bar. Yeah, you've got a lot of fuel
• 30:32
  now. You could put it on there and
• 30:33
  say, hey, you've got, you've come to the station, you've got
• 30:36
  a free chocolate bar. You go in and then you buy even
• 30:37
  more. I don't know.
• 30:38
  Yeah. Get yourself a free Twix every
• 30:40
  time I fill up the car. And I guess then from a, you
• 30:45
  know, different loyalty model point of view, we've talked
• 30:47
  about lightweight loyalty for you to kind of deeper
• 30:50
  engagement, how much should let's focus on the ISO market
• 30:53
  because you've talked about that kind of being a really good
• 30:54
  delivery vessel for you guys. So how should Isos think about
• 30:56
  what's right for their specific merchant base and how deep they
• 30:59
  go with loyalty? Is it, is it easier for an ISO
• 31:04
  to continue putting pressure on the sales team, growing their
• 31:07
  sales team and continuing to, to sell to merchants or one upsell
• 31:13
  to their existing merchant base and at the same time grow their
• 31:17
  merchant base? So in, in e-commerce world, we
• 31:20
  call that the LTV to calc ratio. What's the lifetime value of the
• 31:24
  merchant and what's the customer acquisition cost?
• 31:29
  And the ISO has to think of the lifetime value of their merchant
• 31:34
  base and how long does that merchant stick with the ISO?
• 31:38
  How easy for the for the merchant is it to to switch to
• 31:42
  another paying provider? And how can the ISO make it
• 31:47
  super hard for the merchant to switch?
• 31:50
  And this is where we are coming. I'll give you an analogy there.
• 31:55
  You have a phone, a smartphone right now.
• 31:57
  And let's let's compare that to the smartphone to a payment
• 32:02
  device. And I come to you in a few years
• 32:06
  time and I tell you, put your smartphone aside, I've got a 10
• 32:10
  times better phone to give you with a much better camera, 10
• 32:15
  times better, way faster XYZ. But and it's, it's cheaper.
• 32:22
  So it's actually cheaper, but you won't be able to take your
• 32:25
  contacts with you. You have to build your contacts
• 32:29
  base from the start. Are you guys going to switch yes
• 32:33
  or no? No.
• 32:35
  So let's go to payments as an ISO.
• 32:40
  I start building the merchants customer database with that
• 32:44
  payment device. It's going to make it super hard
• 32:48
  for that merchant to switch to another payment provider because
• 32:52
  the the data is now linked to that specific payment terminal.
• 32:57
  And this is where we come in again.
• 32:59
  All the tokens are now linked to to that mid to that terminal ID
• 33:04
  with zeal. So this is how merchants again
• 33:08
  need to think. It's not about giving them,
• 33:11
  giving the merchants the cheaper rates etcetera.
• 33:14
  They'll give them value add services that will actually make
• 33:16
  it super hard for them to switch.
• 33:18
  Increase the lifetime value by. How does that work though when
• 33:22
  you guys are working with multiple acquirers?
• 33:24
  So you'd have to start again with CEO.
• 33:26
  So I moved from an AD in to an Elevon or someone like that.
• 33:31
  I would have to start again, even though you would maybe be
• 33:34
  working with both those acquirers.
• 33:36
  Yeah, because at the time being as well the tokens are
• 33:39
  different, right. So we would get different tokens
• 33:42
  from the different acquires unless obviously we get the par
• 33:47
  and then we were able to do more with it.
• 33:49
  But yeah, for for. Par like I keep going on again
• 33:54
  the last 12 months I've been asked about par day a lot
• 33:57
  because the power of that data absolutely is so powerful,
• 34:00
  right. Can you explain what what it is?
• 34:02
  And and yeah. So it is, again, it's a, it's a,
• 34:04
  It's a token, the payment account reference, but it
• 34:07
  tokenises the, the bank account number rather than the actual
• 34:11
  PAN. So as opposed to if, again,
• 34:14
  thanks to Apple, of course, and making our lives easier.
• 34:18
  When you tap your Apple Pay or when you tap your physical
• 34:20
  cards, we get two different tokens, but we get the same
• 34:23
  part. So, but not all the payment
• 34:25
  companies provide the part. So that's the if.
• 34:29
  If it's a payment company that provides the part, then it's,
• 34:31
  it's a different story. But generally what happens is
• 34:36
  again part is still in in it's very nascent stages in the
• 34:41
  industry. We look, we talk, we talk about
• 34:43
  data and stickiness and the kind of that long term upside for
• 34:48
  businesses. Do you think Isos will
• 34:51
  increasingly be vowed on that engagement with data and
• 34:55
  merchant solutions or is it just kind of that transaction volume?
• 34:58
  I don't think they have an option.
• 34:59
  I don't. I don't think Asos have an
• 35:02
  option but to eventually start selling value add services and
• 35:06
  data. It's very similar to telecom.
• 35:08
  At some point telecom mobile operators were selling minutes.
• 35:16
  That was the the key thing. And then it's it's now a
• 35:18
  commodity and they sell you data, they sell you value added
• 35:21
  services, access to the Internet, etcetera.
• 35:23
  It's the same exact thing. Payments will get to that point
• 35:27
  eventually. I don't know one, but I believe
• 35:31
  the sooner we can help Isos to start selling more value, more
• 35:36
  data, the the more we can help them generate more revenue per
• 35:41
  merchant, increased thickness and so on.
• 35:43
  How do hardware providers feature in this ecosystem for
• 35:47
  you? Because obviously there's always
• 35:49
  all that. In recent years there's been new
• 35:51
  entrants into the market. From a a terminal point of view,
• 35:54
  obviously Android makes it slightly easier I presume.
• 35:56
  But actually, you know, you've got then various different
• 35:58
  unattended solution providers. Epos is a minefield in its own
• 36:01
  right. If you're going to do
• 36:02
  interactive stuff with with the Epos system, like how big a
• 36:05
  bearing does that have on your road map, if any?
• 36:08
  Yeah, I know. Of course.
• 36:09
  So a hardware manufacturers acquires and Isos are all super
• 36:14
  important for us. So the hardware manufacturers in
• 36:16
  some regions provide their own payment app that we have to
• 36:20
  integrate with. We're terminal agnostic.
• 36:22
  We work with any of the the hardware manufacturers and then
• 36:26
  in other regions it's the acquired or a certain software
• 36:31
  vendor that puts their software on the hardware's hardware.
• 36:35
  So we do need to integrate with all the different softwares for
• 36:39
  the major hardware players. We've done that now in North
• 36:43
  America, Europe, specifically UK and the rest of Europe and some
• 36:49
  North African Middle East countries.
• 36:51
  And again for us it's it's the ability to get the token from
• 36:57
  the payment app running on the hardware, whether it's an
• 37:00
  Ingenico Castles Packs 50 and device, whatever it is, we need
• 37:05
  to get that token. So we work very closely with
• 37:09
  them. Again, it's in their best
• 37:11
  interest to integrate with value and services Zeal and others
• 37:15
  because they want to be able to say our terminal is integrated
• 37:20
  with all these different value add services.
• 37:23
  And my, my dream is to eventually when the card machine
• 37:28
  is coming out of the factory of ingenical or Casas or packs any
• 37:33
  of the big manufacturers, it has ZLP installed.
• 37:37
  It's a it's very similar to your iPhone.
• 37:40
  You buy it with some pre installed apps on it.
• 37:42
  It's the this is where we want to get to.
• 37:44
  It's a data layered. It's again, it's an
• 37:47
  infrastructure play and you cannot eventually what I would
• 37:51
  love to see is similar to how you cannot have payments without
• 37:57
  the schemes without Visa, MasterCard and Amex.
• 38:00
  You I think hopefully eventually you will not be able to have
• 38:04
  offline payments without the value of data, which is zeal
• 38:08
  basically. That's that's always.
• 38:09
  And when you look at different markets that you guys obviously
• 38:12
  growing and growing and when you're looking to enter a
• 38:14
  different market, do you have to look really closely at how
• 38:17
  consumers actually engage with loyalty in those regions and
• 38:21
  that maybe diversifies how the product is brought to market in
• 38:25
  different countries and regions? We don't look at how consumers
• 38:29
  engage with loyalty to enter the region.
• 38:30
  We more we look more at cash versus card penetration.
• 38:36
  So again, if, if the majority of the transactions happening are
• 38:40
  cash transactions, we won't be able to add much value.
• 38:43
  We add value and the it's a court transaction we're running
• 38:47
  on the terminal. So that's that's the where the
• 38:49
  assessment really goes. And look into future let's Fast
• 38:54
  forward five years. Where would you want to hope the
• 38:58
  job that Zeal has done to look back on, say, success?
• 39:02
  I, I'm, I'm thinking about again, different regions we're
• 39:05
  looking at, but in, in five years time that what keeps me
• 39:09
  going is just honestly inspiring the next generation of
• 39:12
  entrepreneurs. When we started in with Zeal, we
• 39:17
  were told it's super hard. You're not going to be able to
• 39:20
  integrate with all these payment companies.
• 39:21
  They're super slow throughout their Rd. maps, etcetera.
• 39:24
  And I'm very lucky we, we stuck to it and we did it.
• 39:28
  So in in five years time, what would make us super successful
• 39:31
  is to see Zeal on more than a million terminals running,
• 39:37
  integrated with all the different EPOS companies and
• 39:41
  building that data infrastructure.
• 39:43
  Yeah, I think this is and and again, I think we're building a
• 39:48
  generational company. So I'm not looking at exiting
• 39:52
  this business. We're selling this business
• 39:54
  anytime soon. We've had some acquisition
• 39:56
  office actually, but it doesn't make sense for me.
• 40:00
  I feel like my life revolves around this and it's it's going
• 40:03
  to be a generational company and AI makes it super, super, super
• 40:08
  exciting. I'll tell you something if you
• 40:12
  don't mind as well. We're building an AI to AI
• 40:19
  stunts or features where a merchant can hire an AI manager
• 40:24
  so they can hire because again, we, we see all the data, we
• 40:28
  understand your transactions, new and returning customers,
• 40:31
  etcetera. And you can link that
• 40:34
  merchandise word, you can link your Instagram, you can link
• 40:36
  your social media as a merchant. So why don't you start hiring an
• 40:41
  agentic AI marketing manager, start hiring a finance manager
• 40:46
  that for £20 a month. So obviously there is a lot that
• 40:51
  we're going to be introducing to merchants using AI, using
• 40:55
  agentic AI. And this is where again, if you
• 40:59
  look going back to our question about payment acquires, payment
• 41:03
  acquires are not going to be building an agentic AI manager.
• 41:07
  It's why because they're focused on payments with all due respect
• 41:11
  to them. And that's where and we need
• 41:13
  them as much as they need us. So definitely.
• 41:15
  What about the e-commerce landscape then?
• 41:17
  Is, is e-commerce A a Gray for breakout?
• 41:19
  Obviously a lot of stuff you do is is linked to the point of
• 41:21
  sale, but is there a natural transition to grow the E com
• 41:25
  business? There, there is a, there is a
• 41:26
  bit of a link to e-commerce in, in, in, in terms of Omni
• 41:30
  channel. So if a physical retail has also
• 41:35
  a e-commerce play, normally they they don't see that they're the
• 41:39
  same customers transacting. So that's where we can analyse
• 41:43
  that same token and and basically give the same loyalty
• 41:47
  points that you're collecting on e-commerce.
• 41:49
  It'll be the same as in your physical retail.
• 41:52
  You talked about that square pop up on the phone, which is is
• 41:55
  really cool. I presume that's something you
• 41:56
  guys could potentially to to build then as well.
• 41:59
  Yeah, Yeah. We're doing that with one of our
• 42:02
  partners as well actually called Loyo in Netherlands.
• 42:06
  And we again, you top the, so again, actually one of the key
• 42:10
  things for us is the loyalty engine doesn't have to be ours.
• 42:14
  So we could be sitting on the payment terminal integrated with
• 42:18
  a third party loyalty engine. So and, and think, think of
• 42:24
  enterprise retailer, they're not going to change their loyalty
• 42:27
  and CRM, but what's extremely hard for them is to integrate
• 42:32
  that CRM and loyalty to their card machine.
• 42:35
  And the way for them to do that is if zeal is on the card
• 42:38
  machine, so we're the API basically on the court machine
• 42:43
  to their third party loyalty. Lotus Scheme Agnostic, right?
• 42:46
  Yeah, exactly. It just feels like a really
• 42:47
  interesting space to me. So if we had the guys from crowd
• 42:49
  on home or like issue a specific loyalty, you guys are very much
• 42:52
  dealing with the acquirers, your mentors, you, you described
• 42:56
  earlier worked for a loyalty company and helped you to build
• 42:59
  what could be technically kind of a rival loyalty company in
• 43:01
  some ways. Like you know, how big is the
• 43:03
  loyalty ecosystem? Does it need some sort of
• 43:07
  consolidation to provide because I talked about the coffee shop
• 43:09
  earlier, like every week I see a different loyalty platform or a
• 43:12
  different solution. Like it's very chock a block
• 43:15
  with different providers, right? Does it just need like a big
• 43:18
  cleanse and and removal of some of these legacy plans?
• 43:20
  100%, again, I generally don't think loyalty on its own will
• 43:26
  get a billion dollar company it it doesn't happen.
• 43:30
  But the data behind the laws in knowing how to monetize that,
• 43:34
  especially if you're able to increase the conversion from the
• 43:38
  20% we were talking about to 100%, that's where the the money
• 43:42
  is. I think the nature of terminal
• 43:44
  changing slightly as well. Like you've got a lot more
• 43:46
  hardware solutions that have a little screen on the back of the
• 43:49
  pause. So again, you've got an
• 43:50
  environment where you can present information.
• 43:53
  It's an advertising screen in essence.
• 43:55
  That's never been used as that though, right?
• 43:57
  Yeah. But if that pops up in front of
• 43:59
  me and says, hey, you've got a free croissant, you've got your
• 44:01
  coffee's free on us this time because it's your 10th visit in
• 44:04
  the month. Like you're creating little
• 44:06
  journeys and experiences in that buying process that again, are
• 44:09
  being remembered by the individuals coming back to these
• 44:11
  locations. Absolutely, honestly like and
• 44:15
  there are some other features outside of loyalty that we're
• 44:17
  working on completely outside of loyalty.
• 44:20
  And but it's all around Valley Art services on the terminal
• 44:23
  like that literally split second of you having your eyes on the
• 44:26
  terminal to see whether that transaction has been approved or
• 44:29
  not. How can we add the value to the
• 44:31
  ISO and the merchant there and then and we're doing a lot on
• 44:35
  that as well. So our again, our success is can
• 44:40
  we add new revenue streams outside of the transaction fees
• 44:46
  on the payment term. And there are tons, literally
• 44:49
  like our forecasts. They're literally like millions
• 44:53
  and millions of dollars that could be made completely outside
• 44:56
  of the transaction. I'd argue that you don't want
• 44:58
  staff anywhere near it as well. Like I'd be very much thinking
• 45:00
  then about the specific device that loyalty is presenting on
• 45:03
  because I talked about some of the stuff with tipping platforms
• 45:05
  lately where, you know, I've been in, in a bar and the staff
• 45:09
  member clicks no tip before handing me the terminal and
• 45:11
  giving me the choice to make that decision.
• 45:13
  They're just like, oh, I don't like tipping.
• 45:15
  You know, this annoys people. Like they're they're removing
• 45:18
  that choice for me. And the same could apply to
• 45:19
  loyalty, right? You're relying on that staff
• 45:21
  member quite often to say, hey, do you have a loyalty card?
• 45:23
  Do you want this hideous piece of cardboard that you're never
• 45:25
  going to bring back to the shop? Like that process needs removing
• 45:28
  altogether. And by having a slightly larger
• 45:30
  screen or device to present that on, I think that kind of removes
• 45:33
  that clunky step in the process. Definitely.
• 45:37
  Before we wrap up one of our favorite parts of the show, The
• 45:40
  Shelf of Shame, what's one thing in payments, fintech or general
• 45:44
  that you'd like to banish forever?
• 45:46
  Ironically, loyalty programs, loyalty programs or loyalty
• 45:53
  programs that require a second step.
• 45:55
  Let's put it out to it like I'm I'm, I would wish everyone like
• 45:59
  in the industry all the best in terms of converting customers,
• 46:03
  but honestly does not work when you have to ask the customer to
• 46:07
  do a second step on top of the actual transaction.
• 46:10
  What about the sign up process in its own right though?
• 46:12
  Like do they always have to sign up for even a zeal?
• 46:16
  No, there's no sign up like with with us, there's no sign up
• 46:20
  required on the terminal. It's just giving us the ability
• 46:23
  to see that token the second time and recognize it's a
• 46:26
  returning one. So that stamp set up, you talked
• 46:28
  about the 10 stamps, me as the customer of the coffee shop,
• 46:31
  I've never signed up for anything.
• 46:33
  The system is just saying we know it's it's you from your
• 46:36
  card pan and you've been here 10 times.
• 46:39
  The 10th 1's on us. Correct, but the merchant has to
• 46:43
  configure their loyalty program of course, just once.
• 46:46
  But the customer doesn't have the.
• 46:48
  The consumer doesn't have to do anything.
• 46:50
  I mean, that's incredible for a consumer to be rewarded without
• 46:55
  having to do anything. Nothing that is that is perfect
• 46:57
  UX, right? Because there's no UX and.
• 46:59
  It's free for the merchant that you're helping the merchant
• 47:02
  return and retain the customer and you're telling them I'll
• 47:06
  only make money when you see value off of that.
• 47:10
  So it's it's perfect. There's no need for signing up
• 47:13
  on the loyalty app, downloading X number of different clothing,
• 47:18
  nothing. So I think.
• 47:20
  They're not agreeing to a certain amount though that
• 47:21
  they're going to give away like how do they?
• 47:23
  So they're configuring that though in the background they're
• 47:25
  going to say, right, you know, this customer can only get one
• 47:27
  free coffee a month or how does that?
• 47:29
  Work it's up to it's exactly similar to how they would set up
• 47:32
  their normal loyalty program, right.
• 47:34
  But the only thing is they're going to have the opt in rates
• 47:37
  is going to be way higher than on a loyalty program, a separate
• 47:42
  transaction. I suppose sometimes when you get
• 47:44
  a loyalty card, you don't actually know that customer's
• 47:46
  even opted in. Yeah.
• 47:48
  But you don't. You don't know it, right?
• 47:49
  You get a stamp. You don't know if you're going
• 47:51
  to see a customer ever again because you don't even know who
• 47:52
  they are. Correct, correct.
• 47:55
  So that's that's my vote. Do you do you guys agree?
• 47:57
  Yeah, I like, I like, I like there's there's a problem with
• 48:01
  loyalty schemes. That I think it needs unlacking
• 48:04
  a bit because I like the loyalty, you know, like the
• 48:07
  favorite. I've talked about this again,
• 48:08
  the favorite bar I go to in Bath, you know, 10 pints, you
• 48:11
  get a free pint, my bar, but it's always 10 isn't it 10
• 48:14
  haircuts, you get a free haircut yeah, but then, you know, it's
• 48:19
  it's the cards. It's the thing to get rid of the
• 48:21
  loyalty cards. But actually even the sign up
• 48:23
  like and if I'm prompted I have to put my e-mail address in to
• 48:26
  sign up, that can be a pain in the backside is.
• 48:28
  It customer journey of loyalty schemes, right?
• 48:30
  Yeah, I think it's a journey and you're removing that friction
• 48:33
  point because the customer's not having to do anything, but
• 48:35
  they're still benefiting and they're, as long as they're
• 48:37
  being told they're benefiting, they feel like they're getting
• 48:39
  something out of that, that that actual merchant, right?
• 48:42
  Yeah, I completely agree. Starting it on there.
• 48:44
  Amazing. So where can people find out a
• 48:46
  little bit more about Zeal? How do they get in touch with
• 48:48
  you, your sales team, etcetera? Of course.
• 48:50
  So obviously we're we're on LinkedIn, so the whole team is
• 48:53
  there reach out to anyone there from the team at Zeal and our
• 48:57
  website is get zeal dot IO. The whole team is reachable.
• 49:02
  My e-mail is O dot AB dot get zeal dot IO.
• 49:05
  So again, we I like to speak to anyone, everyone, and I was like
• 49:09
  to take notes. If there's anything for us to
• 49:11
  learn on how to improve the experience or new ideas that we
• 49:15
  can implement using the data we collect I'm I'm all ears.
• 49:18
  CEOs keep giving their e-mail addresses out on this podcast.
• 49:22
  Thanks for coming in. It's been a pleasure to speak.
• 49:25
  To you, thank you so much. Thank you for having me.
• 49:27
  Thank you.