Welcome to the PayFAQ Embedded Payments Podcast brought to you by Payrix. As payments and software experts that eat, sleep, and breathe Embedded Payments we’re as passionate about you as you are about your customers. Each podcast episode will provide insights about Embedded Payments designed to help you feel the transformation and growth of your software business. You’ll learn from industry experts, Payrix customers, and leaders on the Payrix team about the latest trends, best practices, and real-world guidance from payments experts to help you take your software platform higher.
Ian Hillis
Hi everyone. Welcome back to the PayFAQ Embedded Payments Podcast brought to you by Payrix and Worldpay. I’m your host Ian Hillis and today I’m continuing my conversation with Andy Meadows, the Head of Partner Success at Payrix, about how to build a successful Embedded Payments strategy. Today, we’re going to focus on value added services and why they’re important in the payment conversation. And this is now part three of the multi episode series.
Andy, welcome back getting lots of quality time with you these days.
Andy Meadows
Glad to be here, glad to be here, Ian.
Ian Hillis
This one I’m particularly excited for. Andy, last time we talked, we covered payment attachment to the core payment product. And I think oftentimes there might be a singular focus on just the core processing, which is a lot to wrap your head around in the first place, particularly someone new to this. But then there’s this whole world of payment-related value added services out there. Let’s start with helping our audience learn a little bit around, how should we be thinking about these types of services? Are there natural groupings you use to discuss this? I would love to start there with you.
Andy Meadows
Yeah, I mean, I think first and foremost, they’re called value added services for a reason. They bring value to the core payment processing solution that our partners are deploying out to their end users. And as we think about how do you put those in context, as there are a ton of value added services. I like to think of them through three buckets. We think of security and compliance value added services, we think of services or solutions that just help a business run their business more efficiently, more effectively, more productively. And then we think about value added services that actually enhance the
overall experience, and that could be enhancing the experience for the business, the end user of the software platform, it could also be helping them enhance the experience they’re offering to their customers, the folks that they are, they’re servicing and solving problems or providing solutions for every day. So again, to kind of rehash that: we think of security and compliance, we think of just you know, table stakes, running your business value added services, and then, we think of ways to enhance the overall experience that they’re offering through their payment solution.
Ian Hillis
That’s a helpful mental model to think through these, Andy.
Perhaps you could give us some examples, like are they really driving a differentiated experience for the software platform, or its customers? Or help bring this to life for our audience around these categories that you created?
Andy Meadows
First off, are they important? Well, we talked about the value, but for a software platform, it’s also increasing the lifetime value within their software platform. So, they’re deploying a payment solution, but every time they attach a different value added service, not only does that create stickiness from a customer retention perspective, but it’s also increasing the overall monetization.
Now when we think about the value they’re really bringing. Think about just simple things in your life, Ian. When you have loaded your payment method, your credit card into an e-Commerce site that you frequently go back to, what you’ll notice, or maybe you don’t notice, these days, you never have to update the expiration date. So that’s called account updater. That’s a value-added service, that you can bolt on to a core payment solution. Also, if a business has both an e-Commerce environment, but they also have a retail brick-and-mortar location, and they may have invoicing capabilities, there’s things called omnitoken, that’s the ability to tokenize your payment method. And then you are able to retrieve it in whatever environment that you interact with that specific business. That’s a value added service, those things don’t just come automatically with a payment processing account. They have to be enabled and deployed into the solution. So, those are examples of ways when I talked about those three categories that’s kind of enhancing, that’s the enhancing the payment experience type of category, for example.
Ian Hillis
Do you see consistent demand across the software partners you work with? Or maybe said differently. You see a lot from a lot of different verticals, is there strong consistency? Does it vary? You gave the example of account updater. And, man, I wish Sirius XM did not have that feature. But I could see where that’d be really, really convenient across a whole host of verticals. But that truly is a value added service across the board. What do you see there by a vertical by vertical or more horizontal approach to this?
Andy Meadows
Yeah, I will tell you. Your consistency, a lot of times lies in the card acceptance environment, and that’s not a catch all answer. But some of the ones I just mentioned, the account updater for instance, super valuable in an e-Commerce environment, whereas maybe not as important in a brick-and-mortar retail, restaurant type of business. So, I think that consistency sometimes lies maybe vertical or card acceptance environment. But there are differences and/or nuances associated with any given software partner that we work with depending on the end user they service, and then specific to the actual merchants and their needs and their interests. And we’ve not even gotten into things like gift card programs, PCI compliance security programs, working capital, small business loan access to working capital programs. If you really think about those that I just mentioned, the applicability of those can be consistent across all merchants or in some cases, potentially not. And they fit niche verticals, niche partner and merchant bases.
Ian Hillis
It sounds like there’s a lot of opportunity out there. You started listing some of the pieces around that. Let’s take a step back. When, as a software platform, should I start thinking about value added services and my payment journey? I guess, is the first part of my question. And we could talk about when to introduce into a conversation the second part. But let’s say I’m new to payments, and I’m just understanding this core payment processing element of it. When should I start thinking about value added services and infusing that into my ecosystem?
Andy Meadows
Well, I think you should start thinking about it day one, that doesn’t mean you implement everything day one, that means you start, you start looking at what value added services complement your core payment offering. And then think about your end users’ kind of buying cycle or your sales cycle. And you got to think which of these value added services are going to run the merchant business and enhance the payment experience, you know, those are things you should probably develop and bolt on from day one, because that’s going to help increase your value proposition to the market. When you’re selling payments within your software solution. There may be others that you say, listen, I’m going to be valuable, super important that maybe that’s a phase two, phase three, that’s a cross sell initiative. So, we talked about payment attachments in one of our previous podcasts, you want to make sure you drive the attachment of payments, that’s the hub of the wheel, you know, you think of hubs and spokes, the hub is driving payments attachment, you want your value added solutions to either help you drive more attachment. Or if you feel like they may convolute that payments attachment, then you think about those as a cross sell or upsell subsequently, thereafter.
Ian Hillis
I want to call back to kind of our first conversation around the resourcing on this type of thing. We’ve listed seven or eight specific value added solutions that I know there’s more we’re both excited about we can chat about that in a second here. But who’s doing this internally from the selling perspective? Is it the same person who can speak to the software platform, the payments, and all of the value added services that come with? That sounds pretty complex. And I’m wondering the different types of approaches you’ve seen and the pros and cons of each?
Andy Meadows
Yes. So, again, it kind of goes back to the last answer I gave, you got to think about what naturally enhances the value proposition of your payment solution. Because if it just naturally enhances, again, we use the examples of omnitoken and account updater, those are things that are just going to be super important to your core payment solution. Your single seller model, the individual or the team that’s going to be selling software plus payments, they’re going to enjoy having that type of value added service that they can talk about during that single sales process. You’re going to get more complex value added solutions, think gift card. And gift card, you know, seems pretty straightforward. But when you actually think about the sell and the solutioning, and the implementation of the gift card program, you might say, hey, that may be better as a phase two cross sell type of upsell initiative so that I can I can have a single team navigate the software and payments sell solution without getting them too far in the weeds or muddying the waters too much. Then the second part of your question, and well, then who does that?
What I’ve seen work best is when it’s a marketing led initiative, so when you’ve got value added services that you want to cross sell into your existing software and payments customer base, it’s got to be a marketing led initiative, you’ve got to have a really articulate value proposition you got to help speak to your end users as to why this value added service is important to them, how it’s going to improve their life, how it may be necessary. Think PCI security. PCI security is a topic, that’s a value added service that’s necessary. You know, there’s nothing sexy about it, but it’s necessary. So that’s where marketing lead initiatives are going to generally help you get out in front of your customers, create the mindshare, the awareness, so that you can then use a customer success team. You can even use your inbound customer support team as a leave behind, you know after they’ve solved your solution to an inbound support need. So those are a few ways to think about the cross sell thereafter.
Ian Hillis
Andy, as Head of Partner Success, can you talk a little bit about the types of offerings software platforms might be able to expect from someone like a Payrix or Worldpay, to help them with this? You
touched upon a number of pretty complex topics. Is this the type of conversation you have with existing software partners? And what does that two-way dialogue and support look like in your world?
Andy Meadows
Yeah, I mean, the short answer we’re having these conversations every day. What we realize is we want to be differentiated in the market (i.e., Payrix) to the way that we support software platforms and we want to help them be differentiated in the market. And payments, the pure authorization and settlement of a payment transaction are what we call table stakes. You would like to think most processors in the market can authorize and settle a transaction. Where we bring differentiation, not only through the support that we provide, the strategy, the enablement, but also through the deployment of value addeded services. So, we’re having these conversations every day. Specifically, right now we’re super excited, we’re rolling out our Worldpay Capital programs. It provides small to midsize businesses with what we know to be easier access to working capital than some of the traditional vehicles that had to navigate in the past to access loans or working capital. So that’s one we’re talking hot and heavy with all of our partners about. We’ve been in market with the solution for about 12 months, I’ve seen tons of success. And then what we see is once partners kind of understand the receptiveness their end users have to a program like Worldpay Capital, then they’re asking about the other solutions we have. It’s almost the gateway to saying, gosh, what else do you have, like the Worldpay Capital program that we’ve had a ton of success with. And then we start talking about the other solutions that we’re bringing to the table. SaferPayments, SaferPayments is our PCI security program that’s been available on the Worldpay side of the business for years, we’re now exposing that to the Payrix side of the business as PCI security and specifically PCI 4.0 are hot topics in the market this year.
Ian Hillis
Love that. And on the topic of things we’re excited about from the complementary to payments piece, I’ll jump in and share one of mine. And I’ve talked about it before on conversational commerce, which is more and more a hot topic in the industry. And there’s different flavors of that. But the intersection there with the payments world is as these software platforms look for ways to engage or provide tools for their underlying merchant base to engage with their consumers think someone coming to pick their dog up at the vet, someone looking at an auto repair bill and saying yes, I approve this. The conversation piece is the critical point of that. But the value added service related to payments is click here to say yes, I will pay that. Or here’s a list of outstanding invoices that I’d love to trigger out through an email or through a series of text messages with a click yes, and you’ve done those payments. So, I get really excited about the conversational commerce aspect of all of these pieces. In addition to the ones, you mentioned across there. Anything else that you’re really excited for the current state of the market value added services?
Andy Meadows
Well, what I would say that I’m excited about is our organization’s diligent, yet aggressive approach to continuing to deploy solutions that are meeting the needs of the market today and in the future. And you know, I mentioned SaferPayments, I mentioned Worldpay Capital. I didn’t hit on value tech as the branding of our gift card program. But what you’re hearing are themes of kind of proprietary programs that Worldpay has put a lot of thought into a lot of resources, a lot of effort to make sure they’re meeting our partners’ and their merchants’ needs. So, I think my enthusiasm is just the commitment that we’ve had organizationally over the past couple of years and moving forward to make sure that we’re complementing our core processing capabilities.
Ian Hillis
I share that enthusiasm as well.
Well, Andy, at this point, we have talked to software platforms about how to staff appropriately and plan for getting payments up and running. We’ve talked a little bit about the attachment rate and how to bolster the adoption and attachment of that. We’ve now talked about the value added services relevant and complementary to the payments offering. Our last session that we’re going to chat about coming up here is really around the attrition and retention nature, for which payments plays a big role in that and looking forward to that conversation as well. So, Andy, as always, thank you for being on the show again. And we’re looking forward to wrapping up a great series in the next couple of weeks.
Andy Meadows
Enjoyed today. And thanks for having me.
Ian Hillis
Thanks, Andy.
We want to be a trusted resource for software providers. So, we’re out there trying to make sense of Embedded Payments and finance to help them get the education they need to make the business decisions their customers and investors will thank them for. Thank you to everyone for joining our conversation today and looking forward to continuing the conversation episodes ahead.
Thank you for joining us today on the PayFAQ Embedded Payments Podcast brought to you by Payrix. For more information about Embedded Payments, subscribe to our show at Payrix.com/podcasts.
