In the final episode recorded at Money20/20 US, we caught up with a number of the speakers and attendees from the conference. Topics include the future of payments, and the benefits of collaboration in the financial services ecosystem.
Our guests for this episode were:
1/ Tom Konz, Head of Global Payments, Joor
2/ Vartika Ambwani, Director for FinTech, Silicon Valley Bank
3/ Randy Kern, CTO, Marqeta
4/ Laura McCracken, Managing Director for Commerce and Payments Global at Accenture
5/ Mia Alexander, VP for Customer Service at Dave
6/ Ani Sane, co-founder and Chief Business Officer, TerraPay
7/ Katrina Holt, SVP Operations, Affirm
8/ Quincy McKnight, CEO and Founder, Covenant Pay
Transcript
Russell Goldsmith
Welcome to a special episode of the csuite podcast that we’re recording in partnership with Banking Circle at Money20/20 US, taking place at the Venetian Hotel in Las Vegas.
We’re on the Banking Circle booth in the very busy expo part of the conference and I’m going to be chatting to a number of the speakers and attendees from the conference, and so we hope that through these short conversations we’ll be able to provide you with a real flavour and understanding of the topics and issues being discussed here at the event.
I’m here with Tom Konz, Head of Global Payments at Joor. Tom, thanks so much for joining the podcast.
Tom Konz
Good to be here.
Russell Goldsmith
You were speaking yesterday, one of the first people speaking at the conference. It was on customer experience, the ultimate marketing tool. How did that go?
Tom Konz
It was great with my panellists who brought a B2C experience coupled with our B2B experience. It was really a good conversation. So, we talked a lot about obviously serving the front-end customer with a great experience that makes it easy for them to make purchases. And in B2C, I think it’s maybe a little bit easier. B2B the world we’re in is really hard because the separation of the buying experience can take months, whereas B2C, you go online, you find stuff, put it in a cart, make a purchase. So, in B2B, it’s a little harder. But it was a really good conversation, I think, to showcase from a payment side what it takes to delight those customers and get them to purchase more and keep coming back.
Russell Goldsmith
Tell us a little bit more about how marketplaces are offering this enhanced payment experience then.
Tom Konz
Our marketplace as a global wholesale ecosystem, again, those challenges for our buyers and sellers are numerous and they’re very unique because everybody comes to those marketplaces in a different fashion. So, solving the payment piece, especially in this day and age, is difficult, right? Because you have issues around credit, you have cross-border issues, currency exchange issues, and deteriorating cash flow. And again, especially in B2B, cash flow for our buyers and sellers is the number one issue they have to deal with. Extending capital well in advance of earning revenue back. And in these small and medium businesses who thrive and try and survive on a shoestring are all looking for access to capital and they’re looking to get paid sooner rather than later. And it just makes it difficult in a global environment when you’re dealing in different currencies to actually accomplish that.
Russell Goldsmith
And so does this tie in with ‘Joor Pay’ that you’ve launched, is that right?
Tom Konz
Yeah, we’re very excited. We just launched our embedded checkout solution about a month ago and we’ve had about 100 of our brands already sign up. The unique aspect of Joor Pay kind of leans into that cash flow piece. So universal acceptance is one. It’s interesting because I talked to a lot of European sellers who say, ‘Oh, Europeans don’t use cards, they don’t want to use cards’, and they don’t use cards because they’re not offered the opportunity to pay by card. Some of our early brands, I find the vast majority of their European buyers are doing so with card. And so, it tells us that you need to create solutions that are meant for their buyer, and they’re treated more like consumers, right? These small buyers look more like consumers than big enterprise institutions. So universal acceptance, paying by Apple Pay and PayPal and different cards and then offering them terms. So, we’re able to internationally offer terms to a buyer in one country and provide the cash flow in a different currency to the seller. So that’s really what makes us unique and especially on our platform, we have so many international buyers and sellers. It’s just a great solution.
Russell Goldsmith
Just touching on what you just said earlier about, those payment terms, if you’re a supplier to a business, so, you’ve been asked to provide a service, but you’re not going to get paid for, say, 60 days, sometimes it can be later for some, big businesses. What’s the guarantees to those clients using your platform?
Tom Konz
So uniquely, we have an underwriter who sits in the middle. So, the great news for our brands is that when we extend terms to one of their buyers, we take the risk. So, we call it we’re the merchant of record. So, we take all that risk and fraud and all of the money movement off the plates of our brands. So, we’ll extend terms to a buyer, say 60 days. So, we collect from them 60 days down the road. But after a couple of days of processing, will fund the brand their money immediately. And so, we solve that cash flow, which is at opposing ends of that transaction. And again, internationally, being able to do that, I don’t think there’s anybody else who can do that across currency.
Russell Goldsmith
And we’re recording at a time where, in the UK, we’re on our third Prime Minister now in four months, but over the last couple of weeks the fluctuation in pound against the dollar. How does that work in terms of the time difference in the guarantees that you’re providing?
Tom Konz
That’s a great question. So, the currency conversion rates that we spot in the transaction. So, we guarantee those for 90 days post.
Russell Goldsmith
Right, OK.
Tom Konz
So, the good news again, we have so many brands, to your point, who are selling something today at an exchange rate today that, when the UK is on their seventh prime minister down the road …
Russell Goldsmith
Quite possibly!
Tom Konz
I mean who’s up next! But the rates they all raise their hand, and they don’t know what to do. They do their best. But that risk is real, and it really can cut into their margins and hurt their business. So, when they aspire to grow globally and internationally, that really holds a lot of those brands back, which is why coming on to the Joor platform for any fashion brand globally is really the place to come because we can just help them with our digital connections and our platform. But being able to process payments on their behalf, improve their cash flow, in that moment, and take all the risk off their plate while providing their buyers access to any form of payment is just taking a lot off their plate and allowing them to grow globally.
Russell Goldsmith
How do you see the future of payments then from a customer experience perspective?
Tom Konz
I think from our standpoint, looking at the buyer as our primary customer that we’re solutioning against, I think our need to continue to add payment types that they want to use. So again, adding Apple Pay or adding crypto, real-time payments. Getting those funds immediately without waiting several days even in between for settlement. Those are the types of capabilities we’re going to continue to enhance and grow.
Russell Goldsmith
And so just finishing off, Tom, any key takeaways from Money2020 so far for you?
Tom Konz
So I was here last year and it’s probably three times as big this year. I think the most important part about this show is collaboration. And I was mentioning to a few other colleagues the partners that I met last year and discovered last year, in short conversations are the ones who we worked with and partnered with to create JoorPay, this embedded global checkout. I found them at this show. So, this notion of like there’s no unimportant conversation, like have the conversations, collaborate, learn what everybody does and putting those pieces together, you’ll never know what you might find.
Russell Goldsmith
Tom Konz, thanks so much for joining us.
Tom Konz
I appreciate it. Thanks, Russ.
Russell Goldsmith
So I’m here with Vartika Ambwani, Director for FinTech at Silicon Valley Bank. Vartika, you’ve just finished moderating a session with a pretty good panel here. We had Scott Sandborn, CEO of Lending Club. Wendy Cai-Lee, CEO, Piermont Bank, and Colin Walsh, CEO of Varo. So, tell us a little bit more about what was discussed.
Vartika Ambwani
The session was amazing. We had three CEOs who really shared their different stories about how they went about getting a bank charter. So, as you know, in fintech, a lot of companies would work with either a bank sponsor who has a bank license or they would go to obtain their own banking license. So, we had Scott from Lending Club, who actually went through getting a license from a different route where they went and acquired a bank. So that was very interesting to hear. We had Colin Walsh from Varo who went through obtaining a charter itself. So, they built the process from ground up and went through the charter route. And then Wendy, who actually is the founder and CEO of Piermont Bank, she shared her story in terms of how she got her own charter, how she powers fintechs, who don’t have the charter and how do they power fintech so they can go to market faster. So, three very different stories. We talked about the current environment. We talked about advantages and disadvantages of each route, what they would do differently and their advice for the founders. So, it’s a very lively discussion.
Russell Goldsmith
What about where you got like a start-up when they’re looking to get their bank charter, what are the challenges that they face, and also how do they overcome them?
Vartika Ambwani
I think fintech just in itself is a very regulated industry, so obtaining a bank charter, first of all, it costs a lot of money. So, one thing that Colin talked about from Varo, he talked about having investors who really believe in your story and will stick by you because it’s a lengthy process, it’s an expensive process. So, there’s the money aspect of it, which not many early-stage companies especially who are just starting out can afford. And then the other aspect of it is actually acquiring, which is again, very expensive and it takes a lot of money, and it takes a lot of resources to obtain that. So, I think for an early-stage company, it’s very hard for them to go into a regulated environment like fintech and build their operations from the ground up. That’s why they have banks like Piermont Bank, who will power them, who will work with them and get them to the market faster.
Russell Goldsmith
And so how does Silicon Valley Bank fit into this whole fintech ecosystem?
Vartika Ambwani
I’ve been to Silicon Valley Bank four years now. Before that, I was at two start-ups and we are very much a tech-focused bank. So, we are in the commercial banking space. We help our companies or we partner with our companies on the commercial banking side of things. We also do lending for them. And then the last thing for it is really just being an ecosystem. So, the reason why I joined Silicon Valley Bank from a start-up was I always thought, where else would I get an experience like this where we bank all the fintech’s or we bank all the start-ups, but we also bank on the majority of the VC and PE funds? We really get to be in the ecosystem. It’s amazing. So, we support our companies not just through capital, through lending options, but we are a commercial bank, so we support them on the commercial banking side of things. But the thing that we take a lot of pride in is our relationship and we try to go beyond the banking services and help our clients, whether it’s connecting to each other, connecting to VC and PE funds, really just taking advantage of the ecosystem that Silicon Valley Bank has.
Russell Goldsmith
Now understand that Silicon Valley Bank are launching a new state of fintech report. This sounds really interesting. Tell us a little bit about that.
Vartika Ambwani
Yeah, we’re super excited. So basically, we’re just coming out with this report, really talking about the fintech ecosystem where the investment dollars are going in fintech companies, where the VCs and PEs are putting in money, and also how the fintech companies are performing and what we’re seeing in the market. So, we’re very excited to put that out. Again, being at SVB, we’re very lucky that we get to be in the center of the ecosystem. So, this is a report which will touch upon what’s happening in the fintech space where some of the trends that we’re seeing, where do we see the market and the industry going? So that report comes out November 8th, and we’re looking forward to it.
Russell Goldsmith
Ok, now just one last question, and we were speaking just before we started recording and so I know this is not your first Money20/20.
Vartika Ambwani
This is my sixth Money20/20.
Russell Goldsmith
On that note, what’s been different about this year? Any key takeaway that you’re going to take from this year’s Money20/20?
Vartika Ambwani
First of all, it’s always great to be back. It’s amazing to be at a conference where you get to connect with so many industry folks. And again, being from Silicon Valley Bank, a lot of the companies are clients of ours. So, it’s also very efficient for us because we get to see all of our clients. I would say the conference is great as usual. Just comparing it to last year, a little less crypto than what was last year, more later-stage companies. But again, you see talent and you see companies who are always here and it’s just great to always be here.
Russell Goldsmith
Vartika Ambwani. Thank you so much for joining us.
Vartika Ambwani
Thank you so much for having me.
Russell Goldsmith
So we’re now joined by Randy Kern, CTO of Marqeta. Randy, thanks so much for joining us. You guys have made quite a few announcements at this event, so I’ve got a few things that I want to go through with you very quickly. First of all, yesterday you announced the launch of seven new products as part of Marqeta for banking. Let’s start there. Tell us a little bit about that.
Randy Kern
As you say, we launched Marqeta for banking yesterday. Several new products, all part of the Marqeta platform, all API driven, all hosted in the cloud. And really powering our customers to innovate in their Businesses around digital banking for their customers. So, there’s a direct Deposit account, there’s Bill Pay, there’s several features there. You can read all about it on the website but really to drive Innovation in the banking Space for our customers.
Russell Goldsmith
What was the response from the people here?
Randy Kern
Oh, it’s been fantastic, actually. As I’ve walked around the Expo, as I’ve had one-on-one conversations folks have been really interested in thinking about the innovation, they can drive for their customers based on this new platform and the new capabilities we’ve just launched.
Russell Goldsmith
How will this unique digital banking solution help consumers? And also, what does it mean for the customer journey?
Randy Kern
One of the things that I keep hearing about at this conference and by the way, this is my first time at Money2020, one of the conversations that I keep having and I keep hearing other folks having, as well, is around embedded finance, the idea of bringing your financial capabilities. Bringing all of the capabilities and tools and financial features that one needs in their daily life to meet a customer wherever they happen to be. So, with a platform like Marqeta for banking, we help someone, whether it’s embedded finance, whether it’s a De Novo or Mobile bank, really a lot of different sectors meet their customers in a really unique and individual way. One of the things that sets the Marqeta platform apart, is the ability to customize at the transaction level of the account level. In a way that you really couldn’t before.
Russell Goldsmith
Next announcement that you guys have made your partnering with Blockchain.com and Raiffeisen. Do you want to just expand on that a little bit?
Randy Kern
So two great customers, two great institutions. Raiffeisen launched a new card product for their customers in Poland and Romania to start. And that’s obviously using the Marqeta modern card issuing and processing platform to power those cards on behalf of their customers and then Blockchain is using our platform to really bridge the world between crypto and fiat currency. So, at Marqeta we don’t do anything directly with crypto, but what we allow our customers to do, especially in the case of Blockchain, is to have a Debit card for their consumers, for their cardholders that can convert Crypto into fiat at the point of sale in real-time as you’re trying to conduct a transaction out there in the world.
Russell Goldsmith
So these announcements, these partnerships, what does that all mean for Marqeta’s future? How do you plan to further disrupt the banking space?
Randy Kern
What I really enjoy about this whole segment and the way that Jason Gardner created this platform, created this company is the innovation that people create on top of us. Folks have started do things that we never envisioned when the company was begun, or the platform was envisioned. In fact, Blockchain is a great example of this. We weren’t thinking about how to conduct cryptocurrency to fiat in the field and use that on a Payment card. But the fact that the platform based on open APIs, it’s cloud hosted, it’s modern, it’s composable. It really allows a huge amount of innovation in our customers. So, when I think about the future, the thing that really gets me excited is to see all that happen. Have conversations with our customers, have conversations with others in the industry, and really see where they can take things.
Russell Goldsmith
Randy, you said it’s your first time here at Money2020. What’s been your key takeaway from it?
Randy Kern
I think I’d come back to embedded finance. I hear that conversation over and over and over again. And just hearing how folks are trying to do this, the ways that they’re trying to disrupt their own industries and their own opportunities. It’s really interesting. And I think it’s a very powerful shift as well. And I think of it not just in the context of embedded finance. But also, in sort of tailoring the experience to the individual, to the account holder, to the cardholder, even to the transaction level at times, and giving us a level of control that as consumers or cardholders we’ve never really had before. And that’s pretty exciting.
Russell Goldsmith
Randy Kern, thank you so much for joining us.
Thank you, Russ.
Russell Goldsmith
So joining me now is Laura McCracken, Managing Director for Commerce and Payments Global at Accenture. Laura, you were moderating a panel discussion a little earlier on the future of super apps in the West. You had representatives from Rapid and Mercado Libra. How did that go?
Laura McCracken
It was pretty damn awesome if I do say so myself. We had people packed around, three or four levels back. They couldn’t get in the space. So, I think we’re on to something. I think the whole subject of the super app is really catching people’s imagination.
Russell Goldsmith
What was the big highlight for you during the session?
Laura McCracken
There’s no consensus. Everybody you have a big debate about whether or not it’s going to take off in the US. Everyone knows it’s super popular in Asia, but in the US, a lot of people say there’s not really a need, but you have a lot of people really wanting it and willing it to happen.
Russell Goldsmith
Well, we’ll come on to it. You mentioned Asia. I mean, WeChat pioneered this term super app. How does it differ to the apps that you and I have on our phones?
Laura McCracken
Well, it’s very different because in China, WeChat actually has a million apps within an app. So, it has light Apps called mini programs, but they’re light apps, a million apps. And you don’t actually see them. You just serendipitously come across them as you’re shopping and spending your every day, walk about life. Whereas in the West, we have different apps for each thing, and you have to click on them. That’s one app for one app.
Russell Goldsmith
Tell us about social commerce then. Can you just describe it in a bit more detail and also the size of the market here?
Laura McCracken
So social commerce, the way that we define it is it’s the integration of commerce and social experiences. It’s really about what it’s not. It’s not advertising. It’s not when you’re on, say, Facebook or Instagram, you click an ad, and it takes you to another website. It’s about actually natively buying while you’re in the app. And we are predicting it’s going to be 1.2 trillion by 2025. At the moment, it’s roughly 10% of e-commerce, but it’s going to be growing to 16.7% of e-commerce by 2025, and that is three times faster than e-commerce and eight times faster than retail.
Russell Goldsmith
So there’s no getting away from this.
Laura McCracken
No.
Russell Goldsmith
Some of the big players in finance potentially oppose super apps moving over to the west. Why do you think that is?
Laura McCracken
Well, it’s the incumbents. You’re really talking about the incumbents. They do have a vested interest to see that their business doesn’t go to a super app or a fintech that becomes a super app. But their real concerns are about privacy, regulation. They’ve been there, done that. They said, look, we’ve tried.
Russell Goldsmith
Are they justified those concerns?
Laura McCracken
Some of them absolutely. These are problems that we have to sort out, but it’s not insurmountable. Privacy, competition, all these things can be sorted.
Russell Goldsmith
Do you think there’s any public resistance to the idea of one app ruling everything?
Laura McCracken
There is, and it’s kind of generational. So, I find that the baby boomers are saying, no, I don’t trust the social media sites as it is. I’m not going to give them even more power. But the younger generation is less resistant to the idea of one app ruling them all. But I don’t really think that’s the only version of super app that we’ll see. I think there are variations of niche super apps. So, it’s not just going to be one winner fits all. You can have multiple winners but still have the super app concept.
Russell Goldsmith
Is there any apps out there at the moment trying to become the Super app?
Laura McCracken
Oh, yeah, so you’ve got, Klarna, Block, Revolut, and PayPal all consider themselves to be super apps in the making.
Russell Goldsmith
And what’s your personal belief in this whole area? What do you think is going to happen?
Laura McCracken
It starts off differently in every country. You’ll notice that in China, it started off with WeChat and with Alipay it started off with the payment wallet. In Indonesia or in Asia or Southeast Asia, it started off with the ride-hailing apps. And it’s different in every region. But I think that in the US and in Europe, it’s going to start off with the wallet, a financial services mobile app. So, the first prediction is where it’s going to start. The second prediction is will it be a super app to rule all apps. No, I think there will be niche apps, niche super apps like an entertainment super app, a travel super app, a gaming super app and Metaverse, dating, fashion. Lots of different things you can have out there that will be multiple apps within an app and where you’re connected with the ecosystem, including creators and merchants, and other users.
Russell Goldsmith
Sounds great. Laura, last question for you. What’s been your key takeaway from Money20/20 this year?
Laura McCracken
It’s all about the ecosystem. It’s partnerships. One thing I’ve learned is that when I come to Money20/20 is not about selling, it’s not about buying. It’s about figuring out who’s really playing in the ecosystem and figuring out how we can collaborate together. It’s all about partnerships.
Russell Goldsmith
Good stuff. Laura McCracken, thank you so much for joining us.
Laura McCracken
Thank you for having me.
Russell Goldsmith
So joining me now, I’m delighted to welcome Mia Alexander, VP for Customer Service at Dave. Mia, thanks so much for joining us because I know you’ve just come off stage. Your session, which was on the evolution of the CMO, you’ve just finished your talk where you were also joined by Pam Piligan from Navy Federal Credit Union and Allison MacLeod from Flywire, how did it go?
Mia Alexander
It went even better than I thought. I think because not only did we talk about the evolution of the CMO, we really talked about how anyone could apply this in any role, in any facet to really showing up for brand loyalty, customer retention. Just getting back to the basics. And I think these were like the perfect women to tell that story because one is supporting military and their families, the other is supporting global payments. I mean, these are really profound customer bases. These aren’t small problems. And it also inspires others to say, if they can do it, what things can I disrupt and show up differently? We also rocked out. We’re all women in fintech. And that’s also something that’s an evolution journey where women are able to show up in executive roles. So, it was very exciting.
Russell Goldsmith
Very inspiring as well I would have thought. Let’s come back to Dave. What kind of customer and brand experience are you trying to provide to your customers?
Mia Alexander
Yeah, I think it’s so important. Our mission is really to use our products to level the financial playing field. And what that basically means is that disruption of banking is to solve the complete problem. It’s potentially financial literacy, it’s also income creation. It’s the basic, seamless banking solutions. It’s goals. And so really, I really like to show up in these moments because I think we’re in this like profound moment of showing what a financial institution can do to think about things more fully around what customers might be needing. And we also call our customers members. And I think that just seats them at the table with us on that journey. So, we don’t have to think of everything ourselves. We tap into what do you need and how do we invest in that to really uplift you.
Russell Goldsmith
I love that. Now you talk about Dave being the finance version of David and Goliath. How hard has it been to compete against the big players in the banking world?
Mia Alexander
Our customer base really has thought of like the big banks not showing up for them. And so, I think of it less as a competition, but more, you’re not serving me. Who else can? And we also saw that they’re willing to maybe get three or four different apps to solve different problems because they can’t find it all in one place. And really, Dave wants to do that. We want to say you’ve already realized that the big banks are not playing for your benefit. In some cases, they’re just holding your money and sometimes, feeing your money. And we really want to say like, you tell us what you need and let’s try to actually use our technology to serve that need. And so, I think of us as very much this network effect, this ability for us to really use technology to pipe and innovate on behalf of that disruption of big banks. So, it’s less of a competition because the consumers already told us, were tired of the traditional way of doing banking. And so, we’re really like, okay, let’s get on board, what do you want and let’s build it for you.
Russell Goldsmith
And so one of the things that you do, you’ve got various different reward campaigns. You’ve launched this year, the cashback. How do all these work in practice?
Mia Alexander
As easy as you would think. I think a lot of times when you look at how it is to sign up for a reward, it’s all these, bells and whistles. You have to do individual taps. We really want to say, do you want a reward and let us find it wherever it exists. And so, the first thing is you can, turn it all on and say, I want to have rewards wherever I shop. And we will find those applicable savings for you. And then other places, like with the gas station acceleration inflation of those rates we really looked for, how do we, bring value back? How do we create a reward just in the gas category? So, we’re not just looking for general rewards. We’re also looking for what are things right now that people need that is actually exhausting their income, their pay checks, and really trying to use rewards to solve that particular problem. It’s not just the luxury items anymore. It’s really the day-to-day rewards that we want to start to put money back into people’s pockets on a weekly and daily basis.
Russell Goldsmith
Now we are in a period of economic downturn, uncertainty. What’s the priorities for your brand moving forward at the moment?
Mia Alexander
It really is. I think there’s this great conversation around income creation and goals. I think the piece that we’re missing is that people’s money is not going as far. And so, one of the things that Dave has really done well is a part of our business called Side Hustle, and it’s really where people can look for incremental income and really for low impact, meaning I can take a survey, I can provide feedback and brands are willing to pay 5, 10, 15, $20 for you to actually give them advice and score it. And that’s what we’re trying to do, is that we don’t want you to overtime sessions right that drain you. We want to say like, hey, you can actually make 15 more dollars doing this. So, I think income creation is going to be really something we double down on. And it’s an exciting part of how we’re thinking of a bank that pays you money.
Russell Goldsmith
We’ve been asking all our guests the same question. What’s been your one key takeaway from Money20/20?
Mia Alexander
Yeah, I’ll cheat, and I’ll do two.
Russell Goldsmith
We’ll allow you two. That’s fine!
Mia Alexander
The CFPB update. I know it’s not the fanciest thing, but I think CFPB is really using their voice in a really profound way to talk about how a lot of people can’t move from one bank to another because it’s very difficult. You have to start over from scratch. I remember an account from 16 and like when I had to start all over again, it’s like, Oh, I’m a new customer all over again. But I had all this history. So, I think that was really important for me to hear. We’re now going to really look at mandates to allow customers to more easily take their history and transfer their direct deposits when they are ready to move. And it makes that competition more around grant like how are you going to win this customer versus the stickiness that you’re actually forcing them to stay with you because of the effort? So that was one I thought that was amazing. The other is this creator economy that’s bursting. I have a six-year-old who thinks she’s a YouTube star. But actually, she might retire me. She might be like the new multi-billionaire. This business is actually creating so much financial impact and it’s also so diverse that anyone can find their audience and do that work. So, I think those are my two great takeaways.
Russell Goldsmith
Two original takeaways. We haven’t heard those, really good ones. Mia Alexander, thank you so much for joining us.
Mia Alexander
Absolutely. Thank you for having me.
Russell Goldsmith
I’m now joined by Ani Sane, co-founder and Chief Business Officer of TerraPay. Welcome to the show, Ani.
Ani Sane
Thank you for having me.
Russell Goldsmith
Pleasure. Shall we start with a quick introduction to your business?
Ani Sane
So TerraPay founded into 2015. And then when we started 2015, the idea was very simple to create a global infrastructure for payments. It sounds as if like everybody is doing payments, but I think the idea was to make global payments more reliable, agile, and to do that was to make it digital. When we looked at our businesses and we looked at and say there’s 2015 that was pre-COVID and everybody talked about is hey, this is a lot of cash involved in global, transfer of money. We built this business on being completely digital. So, and I remember in 2015 when everybody said it’s like, Ani, you’re doing this wrong. You shouldn’t be doing it. You should be looking at cash pay-outs as well. But we stuck to that position of being able to deliver transactions real-time to bank accounts and mobile wallets. So, today what we have been able to do is to build this infrastructure of global payments in 103 countries we can deliver transactions to 4.5 billion bank accounts globally, 1.5 billion mobile wallets globally, and all that is done within 30 seconds. So, it’s a Sunday, it’s a Saturday, it’s a bank holiday. We would get customers money back into their loved ones within 30 seconds. That is what TerraPay is all about. So, it’s a global infrastructure. We work with licensed entities like banks, we work with money transfer companies and help them do the last mile pay-outs, be it, P2P payments, which is like individual to individuals, and it could be like business-to-business payments. So that’s in general what we did. But one of the things which differentiates TerraPay from other, global payout markets was like, everybody thinks global payments is a business of technology. It’s actually not. It’s actually a business of compliance. So, for us, when we started in 2015, as we build our own technology for global pay-outs, we also invested a lot on global compliance. So, we went out, went to the local regulators in multiple countries, got our own licenses from the local regulators, banking regulators. What that allowed us as an infrastructure is one side being a technology infrastructure, but also on the other side being completely compliant. So that’s where banks, money transfer companies love us because, you’re taking the end-to-end service, which is technology, and you’re taking compliance into one box and offering end-to-end pay-outs of the services. Today, if you look at it, everyone is digital. Everyone wants to have everything to be delivered real time. SMS is delivered real-time. WhatsApp messages are delivered real-time. So, we decided it’s like, why can’t money be delivered real time? And I think that is the key pillar of how we looked at. So, as I said, like 97% of our transactions today get delivered within 30 seconds globally, be it Cambodia, be it Bogota, be it Africa. Be it Europe. And that is extremely important because today consumers worldwide are looking for everything to do with real-time payments. And it’s not just in India, for example, or China or be it in Singapore or be it in US. Everywhere the demand is to deliver the money real-time.
Russell Goldsmith
But can you just explain, because there are differences in those payment processes here in North America where we’re recording today compared to some of those other markets that you mentioned earlier?
Ani Sane
I hate to say this, but yes, you’re right. And I think you look at the whole US side of the story when it comes to pay-outs and how money is transferred within the US and from the US outside to more sophisticated markets like in, I would call it the UK, for example, with faster payments or euro with the SEPA pay-outs or in India with UPI and with other and Singapore. I think this market really needs the step-up related to real-time payments. And when we talk of real-time payments, you’re talking about monies to be paid out in 30 seconds, not in one hour, not in 24 hours. So, I think that is where the next level of progress for the markets is going to be. So, I think what we are planning to do in the US, for example, is to look at what we have seen successes in other markets. I see this as a great synergy and a parallel of how we did something very unique in Bangladesh. And I know you would say it’s like in Bangladesh versus the US, but from a regulations perspective, it’s the same. But in terms of the infrastructure is again the very same. So, Bangladesh did not have a great ASH network like what you have in the UK or, in Europe. So, what we did was rather than waiting for the regulators to build a domestic ASH network, which the Fed is trying to do here, we actually went out and started connecting to individual banks and actually create that whole interoperable platform on our own itself. And I think that’s where someone like TerraPay comes in and says, okay, if it’s not available, we will do that extra yard, go out and do those integrations. So today, when we connect to 17 banks in Bangladesh, we are able to deliver at least 84% of consumers real-time because of those individual connectivities. So that’s what we do. So, I see that as a parallel. If I’ve done that in Bangladesh, there’s no reason why we could not do this in the US and in a different way. But that’s how I see that the US really needs real-time payments where you’re able to do pay transactions real-time within 30 seconds, within one minute. That’s where we are.
Russell Goldsmith
So that sets the scene nicely for where we are at the moment. In terms of future trends, what should we be looking out for when it comes to cross-border payments?
Ani Sane
We have to look for three pillars. One is and I think everybody is going to be spoke about, is real-time payments. The second one is just being completely compliant. Today is an interesting world where you need compliance at the forefront. So, every transaction needs to be 100% compliant. It’s going from anywhere to anywhere, and it can only be done when you have a robust understanding and then you’re participating into the local regulatory environment. So, I think it’s extremely important to do that. And the third one, I think to me is it’s all about UX. How can you make the transaction more user-friendly for consumers. Everyone wants to have a digital experience. How can you make that digital experience much more seamless for every demographic, for every consumer? I think those are the three pillars that we are really looking for, even though we are a B2B company. When I say B2B is like, we are not consumer-facing. We think like a consumer-facing brand for our partners. We’re trying to see how we can come to the forefront and actually help that experience come better so that their consumers can actually have more trust with our partners, which means the partners can have more trust in us. And that’s where the stickiness comes in. So that’s in general, what we are doing.
Russell Goldsmith
Listen, one final question for you Ani. What’s going to be your key takeaway from Money20/20 this year.
Ani Sane
So, this is our first time in the US to do a booth. We always come in here as a delegate. So, our experience is like, for us and we’re expanding into the US and LatAm in a big way this year. There is no bigger event than Money20/20. As simple as that. We did it a number of times in Amsterdam. We have seen some massive success with the Money20/20. There is no reason why to look back and say we won’t be here next year. Absolutely we will be here.
Russell Goldsmith
Well, hopefully we’ll get to chat again.
Ani Sane
Absolutely.
Russell Goldsmith
Until then, Ani, thanks so much for joining the podcast.
Ani Sane
Appreciate it Russell. Thank you.
Russell Goldsmith
So joining me now is Katrina Holt, SVP operations at Affirm. Katrina, thanks for joining the podcast. You’re running a session tomorrow with Arlene Dzurnak from Caribou and Zach Anderson, Pettet from Money20/20 and its all-around compliance. What are you hoping to be discussing?
Katrina Holt
I would say it’s actually going to go beyond compliance. So we are on the off-the-record stage, so it could really go anywhere. But Arlene and I have been colleagues and now friends for over 15 years, starting out together in risk management and audit primarily, and then moving into compliance. And she has stayed on that path while I’ve taken a bit of a divergent path. But through that time, from traditional banking to non-traditional banking to bank partnerships, being on the CCO side of that and then moving into fintech, we’re really talking about how do you bring together compliance, risk management, and then operating in the business? And so, we’re hoping that we can have just a real and candid conversation that is in a casual environment where we can talk about that and encourage those that are considering making that move as to like, what are some pitfalls? What are some learnings? Hopefully to fast-track that transition? Because I think we both believe deeply that diversity of experiences is really critical for this industry.
Russell Goldsmith
You kind of touched on it there. You’ve made that transition from working for a bank to a fintech. What are the main differences between the two?
Katrina Holt
There are so many differences just between the two models, obviously. But I would say in particular, what we’re focusing on in being a risk manager is that you have to go from being a risk manager to a risk strategist. And it is an entirely different model when you’re in a highly regulated environment. The programs and the expectations are pretty well laid out as to what you are supposed to and expected to be doing on a daily basis whereas in the fintech space it is intentionally disruptive, it’s intentionally innovative. And so, every day feels like navigating through a meaningful amount of ambiguity. And so, you go from being a risk manager to a risk strategist. And I think that that is one of the biggest transitions, is that you cannot sit separate and apart from the business or the function. You really have to be in there strategizing and partners as you’re defining new products and entering new markets and doing it in this new and disruptive way. So, I think just that like the mindset going into it is, is one of the biggest things. But what we’ll talk about a little bit tomorrow too, is that there’s also a lot of just it’s almost like learning an entirely new language, learning an entirely new culture. And how do you navigate in that in the most influential way possible?
Russell Goldsmith
Do you feel like more of a technologist now, perhaps?
Katrina Holt
Absolutely. In fact, I pride myself on that now, which is pretty funny. I came into Affirm in particular because of my background in banking and my background in risk management. And now I fully see myself as a technologist that offers financial services versus being a banker or even being a risk manager.
Russell Goldsmith
Why is it important that fintech companies embrace compliance?
Katrina Holt
I think we’ve seen through and through I’ve been coming to conferences like this for I think almost 12 years now. And every year and every season we’re talking about regulation, we’re talking about compliance. And I think that what is really been awesome to see the evolution of is the embracing of it in DNA versus something else we have to do. We’re going to build new products, but then we’re going to make sure they’re compliant. I think now we’re seeing a shift, and certainly, at my company, this has held true since I’ve been there, which is compliance has to be at the forefront. It has to be at the beginning. It has to be when you’re considering the design and development of new products. Who are your consumers? Who are your stakeholders? Who are your regulators? And if you’re not doing that at the beginning of the process, you’re redoing and remaking and costing yourself a whole lot of just operational burden by not doing that at the beginning. I think the other thing for a compliance professional that has been really important to me is that working with technologists and understanding that it’s not necessarily the same language all of the time. Ultimately, you can get down to why do these regulations exist, why do these compliance expectations exist, and they’re really for the protection of the consumer. And the soundness of the institution. And so, when you really understand that, of course, that’s what we want to do. And so, for me, that has been why, embracing it from the get-go has been really important.
Russell Goldsmith
You say you’ve been coming to places like this for 12 years. I wonder if we look around and see how many of these businesses didn’t even exist 12 years ago? It must be a huge percentage.
Katrina Holt
Yes, it’s absolutely crazy. In fact, I haven’t come for the last two years. And just even in the two years coming here, it’s actually overwhelming.
Russell Goldsmith
So many new start-ups. It’s exciting though. It’s a great time. In terms of your role then at Affirm, what’s the biggest challenge is that you’ve got to ensure that your company now is adhering to all of the necessary regulations.
Katrina Holt
So my role now is that I lead operations and so I have responsibility for all of the servicing, from origination through to recovering the dollars owed. I also do all of the fraud operations and merchant operations. And so, for us, the biggest thing is the complexity of what you’re building and building it fast, right? So, the systems, the processes, every time we define a new product, every time we go into a new market, we’re doing it at, I would say at mach speed or what feels like mach speed, having been in the industry for a long time. And so, it’s not just enough to want to do the right thing. It’s the actual design and effectiveness of the controls that you’re putting in place and ensuring that those are actually going to, one, mitigate the risk, but do it in a way that is scalable and sustainable for the business. And so that complexity, it grows every single day. Again, back to the question around bringing compliance in at the forefront, if we’re not designing intentionally the products and the processes and the technology right from the get-go, it becomes overly burdensome, and overly complex. And so just navigating through that while still innovating and still, meeting the desires and the big dreams of the business it’s a never-ending challenge.
Russell Goldsmith
It sounds like you’re excited by the challenge though.
Katrina Holt
Oh, I love it.
Russell Goldsmith
We’ve been asking everyone this same question. What’s been your key takeaway so far from Money2020?
Katrina Holt
I have a few, and I’m still attending many conferences. I think my takeaway I said I’ve been coming to these things for a long time. And I’ve been struck by, one, the things that have not changed. We’re still talking a lot about navigating the ambiguity of the regulatory environment and how do you regulate the space and how do all of those things come together in a way that doesn’t crush innovation and crush disruption. We’re still talking about that. And yet, just looking around, we talked about this, right, the number of companies that people have developed to really tackle just very nuanced pieces of the whole financial services ecosystem is so fascinating to me. So, it used to just be a bank developing all of these capabilities in-house is now this tapestry of these really cool and innovative companies, and it’s how you put that tapestry together for a company like Affirm, with our value proposition of who we want to be to consumers and who we want to be to merchants, it is energizing. And so, I would say that the energizing piece is probably also why I’m exhausted, is that coming here has such an optimistic vibe in a time when we’re working through some really weighty challenges. It still has that optimism of what can be for the future. So that’s been really fun.
Russell Goldsmith
That’s great stuff. Katrina Holt, thank you so much for joining us.
Katrina Holt
Thank you.
Russell Goldsmith
So my next guest is Quincy McKnight, CEO and Founder of Covenant Pay. Thanks so much for joining us, Quincy. Shall we get a quick introduction to your company to start with?
Quincy McKnight
We are headquartered in Nashville, Tennessee. I consider Nashville one of the greatest cities on Earth. But we are born and bred there. Do business there in the city. Covenant was founded there in Nashville as a traditional payment rail system company.
Russell Goldsmith
Now, blockchain is something key that you talk about and that you’re dealing with. Why has the rise of blockchain meant a more inclusive financial system?
Quincy McKnight
Well, because from my perspective, being an African American and a leader in this industry, I can’t help but to think about the African American community and the business owners that will be in and are currently being affected by it and that are actively participating in the blockchain industry because of the benefits that crypto brings to the table. To me, what that does is it decreases that wealth gap within that. So that’s where that inclusion can come in for me, is focusing on that wealth gap and making that wealth gap smaller.
Russell Goldsmith
Well, let’s go into a little bit of detail then on the session that you spoke on. It was called The Power of the Minority Transaction in the Future of Digital Currencies. You were exploring the myth of the six-hour black dollar. Can you expand on that?
Quincy McKnight
So there was there’s a myth that the dollar is only circulating in the African American community for 6 hours. So, with that being said, there’s been debate over the years whether that was true or not. And the reason why the debate is that because the federal government never did do a study per say on that. Now, there have been universities like University of Chicago, the University of Georgia, Economic Centre of Studies. They’ve created these studies that have gone out and done the polling, done the research to show this is real. So that’s why I say some people say it’s a myth and some people say it’s not, it is accurate, versus the other hours that the dollar stays in the other communities.
Russell Goldsmith
And so building on what you were just saying a little bit earlier, how do you see the future of blockchain helping communities of colour and making the system more inclusive?
Quincy McKnight
It’s definitely going to decrease the wealth gap, as I mentioned earlier. That’s just one big barrier. The second thing is, I think it can bring trust to communities around the United States and around the world that have not trusted the normal traditional financial systems, because we all know we have stories of where your normal financial institutions have crashed. There’s historical moments of those things. And so this just helps that process, making people feel, if I don’t want to go the traditional route, I can always go the digital route.
Russell Goldsmith
Quincy, I’ve got one final question for you. We’ve asked all of our guests this. What’s been your key takeaway from Money20/20 this year?
Quincy McKnight
I would say, everyone sees the direction of payments. This has been very instrumental in waking up the world, especially the leaders here at this conference. It’s allowed the other leaders to see that payments are aggressively moving forward. So that’s one takeaway I would say that everyone should walk away with.
Russell Goldsmith
Quincy McKnight, thank you so much for joining us.
Quincy McKnight
Thank you.
Russell Goldsmith
Well, that’s it for this episode of The Knowledge Circle podcast from Money20/20 USA. Thanks again to all my guests who took the time to chat with me. If you enjoyed the conversation, please do follow, like and share on your podcast platform of choice. Hope you can join us on the next episode, but until then, thanks for listening and goodbye.