We’ve seen it far too often. Software companies embark on their embedded payments journey only to discover they’ve underestimated the complexity that’s involved and struggle to launch.
If you’re thinking about Embedded Payments for your platform, make time to listen to this episode of the PayFAQ Embedded Payments podcast. Our new host Ian Hillis is kicking off a multi-part series, exploring all the important details you should be thinking about before you get to far down the road.
To start the series, Ian and his guest Andy Meadows, Head of Partner Success Management for Payrix, dive into the topic of resourcing and what you need to consider when it comes to selling payments, boarding and underwriting, service and support, and development and tech.
Andy explains that selling payments are what trip software companies right out of the gate. “Any conversation with an end user, i.e., a business or a merchant, is going to involve pricing. If you’ve never had those conversations around merchant-level payment pricing, the interchange dues, and assessments, you’re to going to run into roadblocks on day one.” The solution is to hire a payments expert to train your sales team, sitting side by side over a few weeks to create a single selling motion for software and payments that your end users will have confidence in.
The next hurdle is often underwriting because of the lack of expertise with operational considerations, especially the additional documentation and information that needs to be procured from perspective merchants. According to Andy, you won’t need a full-time resource from the get-go if you’re taking a crawl, walk, run approach. He suggests creating a combination role for a payment guru who covers the operational piece along with service and support. “In the context of the first two components of the conveyor belt, that’s kind of how I think of it.”
He says most software companies struggle with the back-end service and support piece as well. They haven’t trained staff on the frequently asked questions, inquiries, and issues they’re going to encounter, which tend to be around pricing, rates, fees or reporting, reconciliation, and feature functionality specific to embedded payments. “It’s as much about serving your end user as it is making sure your team is armed with the information they need to be excited about it and to maintain that enthusiasm for the new solution moving forward.”
Ian and Andy wrap up their conversation at the beginning: Embedding payments into your software. Andy warns, “If you don’t have someone on staff from a development or product management perspective, who’s danced the dance with payments and been in the payment industry before, you’re really kind of running through a forest with a blindfold on, and you’re gonna hit a lot of trees along the way.”
Have a listen to the full conversation, and clear the way to embedded payments success!
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Transcript
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 to the PayFAQ Embedded Payments podcast brought to you by Payrix and Worldpay. I’m your host Ian Hillis and today I’m going to be talking with Andy Meadows, Head of Partner Success at Payrix. We’re going to discuss how software companies can build a successful Embedded Payments strategy. And because this is such an in-depth topic, this is going to be episode one of the multi part series that’s going to allow us to go deep on each pillar of Andy strategic insights. Andy, welcome to the show.
Andy Meadows
Thank you, glad to be here.
Ian Hillis
We are excited to have you here. Well, first off, let’s tell our audience a little bit about yourself, your software, your background, your payments background, and we’ll go from there.
Andy Meadows
Background – 23 years in payments, with the better part of the past eight years focused on integrated and embedded payments with a portion of that time actually leading off and running payments inside the four walls of a SaaS company. So the better part of that 23 years was spent on the acquiring side, both in Merchant acquisition partnership management. But gosh, that two years that I had, working for a software company, seeing how a software company thinks about payments, the obstacles, the challenges, the opportunities through the lens of a SaaS company was just extremely beneficial as I came back to the broader Worldpay organization. And specifically for the past year and a half have been focused on partner success management within the Payrix line of business.
Ian Hillis
Excellent. And I am selfishly especially excited. Andy we’ve been working together for what, eight years at this point. So, there’s a lot of history, and I can’t think of a better person to be my first guest hosting this. So again, thrilled to have you here.
Let’s jump in. Andy, we’ve both seen software companies that struggle initially with launching embedded payments. The hope with this upcoming series of conversations is really to provide some topics software companies should think about in advance of getting too far into that payments journey. You and I spent some time brainstorming a host of topics. And I think the first area we decided to jump into here was resourcing and the commitments required for success. So, let’s put resourcing into a few categories. First, I think the topic of selling makes a lot of sense – what goes into selling payments, what expertise, knowledge do you need? What do you need to effectively sell these payments? Let’s start there, and we’re going to move around a little bit.
Andy Meadows
We’ll kick it off with sales. As a software company taking on the sales motion of an embedded payment solution, I’ll be super candid. I think a lot of them underestimate the complexity of selling payments. And that’s where they trip up out of the gate as they’re trying to launch their new embedded payment solution. And what are they tripping up on? Any conversation with an end user, i.e. a business or a merchant is going to involve pricing. And anyone that knows pricing within the payments industry and the complexity of interchange dues, assessments, statement analysis, cost comparisons, knows what I’m talking about. If you’re a software company who is adept and has an expertise around selling software, but yet you’ve never had those conversations around merchant level payment pricing, the interchange dues, assessments, I alluded to the statement analysis I alluded to, you’re going to run into roadblocks on day one. And I mean that, day one.
The moment you try to pitch an embedded payment solution to your end user, they’re going to ask questions, and your team needs to be able to answer those questions, address those questions with a level of understanding and confidence that gives them their end users the ability to make a buying decision with faith that they’re turning their payments, which I mean, guys, we all know, payments is the lifeblood for any business. So, when they turn over their payments solution or their payment processing account to their software provider, they need to have the comfort and the confidence that their software provider knows what they’re talking about. And that comfort and confidence starts with that sales rep. So that’s where, as I consult a multitude of our partners here at Payrix, and previously on the Worldpay side of the house, it really starts with the sales and the sales starts with the ability to understand payments pricing.
Ian Hillis
Makes a lot of sense. Andy, I think one thing that might be helpful to clarify given the topic at hand, and I’m assuming we’re going to go into the strategy of selling in other episodes here, but from a resource perspective, is it the same person in house? Does the software seller profile match well to being able to do payments, do you need someone dedicated and separate or what’s that overlap look like for you historically?
Andy Meadows
I want it to be the same person and our partners want it to be the same person and the more urging the end user and kind does as well. Now, that means you’ve got to bring in somebody with payments expertise to train that one person or that software sales team. What’s really critical in executing on a successful embedded payments program is a single selling motion. So Ian when you ask the question, is this a differentiated person or a different person that sells payments versus software? That’s actually not ideal because you want a single selling motion, where payments is a key feature functionality and benefit of your software solution that gets sold as a bundle. But yet, in that process of a person selling it as a bundle, they’re still going to have to overcome some of those questions or address some of those questions specific to payments, payment pricing, the feature functionality, the value proposition that payments brings to the overall software solution. So that’s where I strongly recommend that a SaaS company who’s new to embedded payments and new to owning the sales motion brings in a payments resource that can then serve as that internal kind of trainer or educator around the payments considerations of the sales process, if that makes sense.
Ian Hillis
It does and you touched upon an important topic there – the overall customer experience. We know that as software companies have evolved, that is the cornerstone of the overall strategy, is how it accepts customer experiences. But what does that take? So, if we’re thinking about a, what is today a software sales rep for bringing expertise – how long does it take to get someone up to speed on that? Is that weeks, months? What have you seen in that area?
Andy Meadows
It depends on the resource they dedicate towards the training efforts. So, what I mean by that is, listen, it’s one thing for a company, a software company to get a hold of a PowerPoint that talks about payments 101 and payments pricing 101. It’s another thing for them to bring in a resource who sits side by side, or even in our new virtual worlds, it’s virtually side by side with the sales team, and helps them address the questions as they’re coming up. And so think about this scenario, if you’ve got a software sales team, and you want to put them into a payment sales motion, if they can take the question and meet and then immediately turn around to a payments expert, get the answer to the question, understand the context around the answer, deliver it, and then repeat that motion over and over again on every call that they’re on today, tomorrow, and next week. The timeframe you asked about -now the timeframe is, you’re talking weeks, a month for that software sales team, to now have a level of understanding in order to be efficient and effective in bundling payments into the software solution. Whereas if you think you’re going to deliver one all in one, payments training in a two-hour conference room with your software sales team, and then they’re going to run off and figure it out, you’re going find yourself 3,4,5,6 months down the road, still tripping over yourself.
Ian Hillis
Really helpful insight. Appreciate that. I think what I’m hoping people take away is this is a nuanced topic, and we’ll go deeper in future episodes. But I want to shift gears a little bit. So, let’s say Andy, we’re now great at selling the payment offering. At some point, we then need to board them on to the payments product itself, which may be a little counterintuitive. What is that difference between selling payments and then boarding payments, and how do we drive success in the ladder?
Andy Meadows
A portion of the boarding is a part of the sales and Ian, you know this, so a software and/or payments sales reps going to go through that consultative sales process and the end user, the business, the merchant is going to make the decision to sign up, so to speak, and the sales reps going to take them through that online application, that merchant application process. But once that application hits an underwriter, so anybody in the payment processing industry understand every merchant account has to be underwritten. From a credit risk perspective, that’s when it becomes more of an operational consideration. Now, generally speaking, and I could speak specifically inside the four walls of Payrix, you’re going to get a majority of your accounts that auto approve, they’re going to pass the checks and balances in order to go ahead and flag that as an approval and issue a new merchant account. But when you’ve got to 10%, 20% ,30% underwriting pending, now there’s an operational motion because the underwriter is going to pend it. You’ve got to have someone within your software company that understands the whys behind underwriting and risk management within the payments industry. And better yet, the why behind a lot of times the additional documentation or information that an underwriting team may ask you to procure from that prospective merchant. So that’s where when you turn from application submission into underwriting and boarding, you now have an operational motion, where again, and it could be the same person we mentioned earlier. Bringing in someone with payments expertise, you’re going to find a lot of payments experts and or payments veterans, specifically on the merchant level sales basis that understand the whys behind underwriting and risk management and can help facilitate that intermediary process between selling and effectively boarding.
Ian Hillis
Andy, similar question to the selling piece. So, let’s say the ladder feels a little bit more operational. Is that a dedicated full time role? I’m sure size depends on this. In a perfect world, what do you see in as it relates to that resource?
Andy Meadows
People slice this a couple of different ways. But when I was in, I talked earlier my 23 years in payments, the first half of that spent running merchant level sales teams and divisions, we trained our sales reps in order to facilitate that underwriting pend resolution process I just described. So many times, you can leverage the bandwidth and the capacity you already have in place from a software and merchant sales perspective in order to facilitate that. Now, if you said, Hey, we want to keep our sales folks selling, I totally get that that’s the other way to slice it. Is it going to take a full-time resource to effectively move deals past an underwriting penned? The answer’s no. You could take an existing operational headcount within your four walls, teach that individual again the whys, the puts and takes associated with underwriting risk management, and it becomes enlisted. But are we talking 10 deals a month, 100 deals a month, 1000 deals a month that changes my answer. But I say it’s 25-30% of their time on a weekly basis, depending on the throughput of your new merchant applications.
Ian Hillis
Is that a day one resource Andy? So, are we thinking for success here, you really have to identify the selling motion, you need to identify the boarding motion, who’s on first base and have them feeling good? Is it something that matures over time? Where have you seen software partners excel in that area?
Andy Meadows
We’ve talked about two things: we’ve talked about sales, we’ve talked about that operational consideration for onboarding. The sales piece is day one. I think a company is missing the boat on being able to ramp and compress the time to revenue optimization, if they’re not bringing in us, a sales trainer, a sales resource, a payments specific individual that can help accelerate the knowledge base and the acumen of their software sales team. The underwriting, operational consideration, the boarding consideration, again, you know, if you’re in a crawl, walk, run type of scenario where your throughput is going to be slower at first than it will be down the road then I don’t think it’s a day one need to have someone who’s just whiz bang at underwriting and risk management. Now, we’ve not hit on the backend service and support piece. So, there could be a combo consideration there for your operational/payment service and support guru and whether that’s a day one type opportunity, but in the context of the first two components of the conveyor belt, that’s kind of how I think of it.
Ian Hillis
Well, let’s go into that service and support piece. So, we’ve sold them, we’ve brought them on board, we’ve got payments going through. Life is so much better as a customer now that I can have embedded payments within that ecosystem, there’s going to be questions, whether it’s software related, payments related that service and support. And that’s a pretty significant portion to think about. How are the most effective software companies addressing this?
Andy Meadows
You used the word most then you use the word effective and not without applying humor to it – most aren’t effective. And that’s just being candid here. Most struggle with the back-end service and support piece. And the reason they struggle with it is in large part, if you go back to some of the front-end sales considerations, we talked about sales and how important a deep understanding of pricing interchange dues assessments rates and fees, where you get on the back end of a service and support motion. And those things come right back into play. So you find a software company is trying to leverage their existing software support staff, which is great, but yet they did not train that staff on the common or frequently asked questions, inquiries or issues that they’re going to encounter, which tend to be either around pricing, rates, fees, or reporting and reconciliation, or in some regards kind of feature functionality specific to payments. So, it goes back to, did the company dedicate the time and bring in the appropriate resources to give their staff the knowledge to address those inbound service and support needs, or where they, for lack of better terms, fly by the seat of their pants and just hoping they would figure it out. And then what they get is, they get a really rough 30/60/90 day launch. And they get a lot of staff members who become somewhat disenchanted with this new payment solution that upper-level executive management so excited about. So, it’s as much about serving your end user as it is making sure you arm and your employees and your team members with the information they need to be excited about it and to maintain that enthusiasm for this new solution moving forward.
Ian Hillis
Makes a lot of sense. Are there any other resources here that come to mind that we’re not talking about?
So, we discussed the front-end sales motion associated with this, boarding the customer onto the payments, and then service and support. What else should a software some company be thinking about in terms of resources and commitments that they need to think through?
Andy Meadows
We’ve missed one really key pillar. And that’s your development and tech resources. And that’s twofold. So, we say the term embedded payments where you got to embed payments into the software solution, embedding payments requires development. And when you get into that dev project, the two things I find that become a challenge, are either A, it wasn’t prioritized the development effort to embed payments into the software platform wasn’t prioritized. So, then we get an elongated and protracted implementation cycle. And what you’re doing now is you’re just burning calories in dollars from a development perspective, without actually getting to market with a solution that can be monetized. The second area some are tripping up on is they don’t have developers or product managers that have any understanding of payments. So, they are experts around their software platform. But you’re asking them to integrate, or embed a pretty complex solution being payments, you know, I don’t want to over dramatize the complexity of it, but there’s a dependency on what vertical you play in, the card acceptance environment, you have your end users needs, there’s a lot of nuances to the way that you can implement payments into your platform. And if you don’t have someone on staff from a development or product management perspective, whose danced the dance with payments, and been in the payments industry before, you’re really you’re kind of running through a forest with a blindfold on, and you’re gonna hit a lot of trees along the way, so to speak.
Ian Hillis
Andy, as we wrap this particular topic, we talked a lot about how nuanced specifically as it relates to payments this can be. If I’m a software company, where am I going to get the next level of detail here? How do I think about finding someone that, to your point, it’s not a three-page PowerPoint deck with some bullets on here’s how to sell payments? What are some resources that software companies should consider as they think about sales expertise, service, and support putting all of these pieces where do I go?
Andy Meadows
Not trying to toot mine or our own horn, but with our Payrix partner success management team, the average team members got 12 to 15 years in software and payments. So that’s one of our differentiators in the marketplace is to deploy a resource into the partnership that has the knowledge of all the things I’ve been talking about today. And now certainly, they’re not going to be the resource that we’ve alluded to, but they’re going to help you understand what you need, where your blind spots are. Other areas you can go externally into the marketplace. There are a number of really well thought of payments industry consultants, educational forums, that you can participate in, the electronic transaction association is a great organization to look into, if not be a member of, in order to get exposure into the payments industry. So again, whether it’s tapping the resource here at Payrix on the shoulder, and making sure that you’re understanding what you need to understand. Or if it’s going out into the marketplace and looking at organizations like the ETA or others, looking at third-party consultants that are payments specific, there are plenty and we’ve got recommendations on the ones that we’ve worked with and we trust. Happy to make those recommendations. So, it’s not a lack of resources. You just as a software company, have to have the willingness, the desire to invest in those resources in order to make life easier, you know, moving forward for you.
Ian Hillis
That’s a lot to think about for everyone here. I hope you see the need we have for a multi-part series here. So, thank you Andy for a today great conversation around resource commitments to consider. On the next episode, we’re going to explore the various stages of growth that a software partner is likely to experience as they’re going through this embedded payments journey. So, Andy, first of many to come here, I want to thank you for being on the show today. Looking forward to this series ahead. And thank you for your time.
Andy Meadows
Hey, likewise, Ian, congrats on your first official podcast here. I couldn’t be more proud to be the first guest that you brought on board.
Ian Hillis
Well, I’m certain that was intentional. I think if there was ever someone to make me look good its Andy Meadows, right. Thank you. Everyone, we want to be a trusted resource for software providers who are 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 are going to thank them for. So thank you everyone for joining our conversation today and look forward to continuing the conversation in future episodes.
Andy Meadows
Great. Thanks, everybody.
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
