Ian Hillis
Hi everyone. Welcome to PayFAQ: The Embedded Payments Podcast brought to you by Payrix and Worldpay. I’m your host, Ian Hillis, and today I’m talking with Brad Pinneke, VP of Business Development at Payrix and Worldpay for Platforms, and we’re talking about choosing the right payments partner for your platform. Brad, welcome to the show.
Brad Pinneke
Hey. Thanks, Ian. I have been looking forward to this since you asked me to come on. Very excited.
Ian Hillis
Me too and Team, we have a fantastic episode for you today. I’ve known Brad for nearly 10 years, at this point, and he is a legend in our industry. I’ve had some of my best payments-related conversations over the years with him, and I’m really excited to share his wisdom with you all. So, let me give a quick intro to Brad. So, you all know where his legendary status is coming from here. Brad is a strategic and results driven leader with 25 years of experience guiding and developing strategies for software companies and their payments integrations. He’s helped software companies of all sizes architect the right payments integration and navigate complex sales and technical requirements while simultaneously helping them understand the nuances of payments, including fraud and security. Brad has led business development teams for two of the largest US payments processors, and he’s developed winning payment strategies for hundreds of software providers, allowing them to monetize payments and grow their software business, from implementing referral partnerships through becoming a wholesale PayFac®. Brad, let’s set the stage for everyone here. How do Embedded Payments complement vertical software platforms?
Brad Pinneke
I think it’s interesting. If you look back to the evolution of payments and how that’s intertwined lately with software companies, it’s just a natural progression. If you think about, they’re selling their software to somebody, right? And once they do that, you know, why not complete that circle and really deepen the relationship. They’ve already built it. They built this trust with somebody who wouldn’t have bought their application without some trust and understanding of their product, why not extend that into the payment component and by really building it into their brand is how I look at it. That’s where it just naturally flows, as the next step for them, to take in payments.
Ian Hillis
How important has that branding been? So, you’ve seen the evolution of the industry over some time there. How important is the software as brand in the process? How does that influence some of the decisions, just given conversations you’ve had with sizes of software companies ranging from small new entrants into the largest ones in the world?
Brad Pinneke
Yeah, I think there’s two answers to that. There’s the economic answer, right? And then I think there’s kind of the social answer, right? I’ll call it that. So, the economic answer is certainly easy, and that by stepping into more of the value prop and doing more and presenting more opportunity to the customer, there’s, there’s a reward, right? An economic reward. So that makes sense, and I think from the social, or I’ll call it socially, is that they’re now, they’re now looked at as a fintech, they’re now looked at as a payment brand. They’re, they’re now more than just their software application. They’re an ecosystem, and that ecosystem deepens that trust with their customers. And I think that’s where it really, when you talk about, like, what does it mean to them as a brand, just like anybody’s brand, the exposure, the depth, the perception that they can bring to their customers, is really what leads them into a strong position.
Ian Hillis
So, Brad, you spend a good chunk of your day demystifying the payments buying process for software companies, and that’s for software companies that might be doing this for the first time, or maybe for the fourth time. So, you’ve probably seen a wide range. But if you think about the types of pain points you hear most from software companies, or even the types of questions that you’re getting asked. What are they trying to understand over the course of this process?
Brad Pinneke
I think what they’re trying to understand is different than from where they’re probably trying to get to. So, I’ll tackle that. And really curious about your perspective. But what I see is what they’re trying to do is figure out who is going to be the best partner with myself, and what are my goals look like, and do they align kind of where I want to be. And so, I think that’s what they’re trying to get to. Now, the second part of that is, you know, what are they misstepping, right? I see lots of positive steps, and where somebody comes in with a really deep understanding of where they want to go, they’ve literally laid out a road map and said, okay, here’s step one, and how do we how do we look at that? And here’s step two, and how do we look at that? And so on. And then there’s the, hey, I just want to make more money, or, hey, I want to extend my brand and take on the payments role. And I think what I see a lot of what happens is just getting maybe lost in, in the must haves, and really breaking down like it’s I must have X, and X could translate into something, but really going deeper into what does X mean? I think they need to. Tie that back to a couple things. One is, culturally, does that align with their culture and their environment? Example might be: how do I payments in and expand on that, from revenue perspectives to can we accomplish it? Do we have the resources to do that? So, I think they create a map, and then they externally, go and try and find somebody that says, yes, I do these things that follow your map, but then they don’t necessarily go back and evaluate, okay, great. Now that we found somebody that says they do that, does that align to our own resources? And do they tie that back into internally, or do they just hear we’re going to make more money if we do this?
Ian Hillis
I’d imagine that viewpoints on some of these pieces change as new information enters the conversation and the payments very, very complex across all of this. If we start with kind of what are the various phases of the quote, unquote sales process that a software partner could expect here, and then it’d be interesting to deep dive into a couple days and see where new information typically gets presented, where you’ve seen software partners shift strategy or adapt strategy or evolve strategy across those various phases.
Brad Pinneke
I think a lot of times it starts from a commercial conversation back to what’s this going to cost us, what are we going to make? I think a lot of them start that way. And what I would say is I probably reverse that a little bit and say, let’s talk about, what am I going to do, and what are you going to do? And when I say, I’m the software person, right? And you’re the, you’re the platforms he’s going to or you’re that, you’re the MC is going to provide a platform to them. And so, I think they should really look at that and say, what are my roles and responsibilities? Because I think that’s ultimately where you start to go to the second part of your question, which is, where does it shift for them? And I think when they start to understand, hey, I’m going to have to price out my customers, and they think, oh, that’s great. I’m used to pricing on my customers. Well, they might be used to that from the software side, and they might think they know that from a payment side, but they haven’t really dug into the details. Again, it’s like, I’m going to go out with a one flat rate structure well, that that may not apply across their entire brand. And back to my point about culturally, like, sometimes you have to present payments in a different way that makes sense. So, you’re starting to see some companies not charge for the software, but build it in their payments. And, you know, does that align culturally again? And so, I think they, you know, they start with commercials, but what they should really do is go back to the point of, what can I do? Well, what do I think I can bring in and then, what does that align to my responsibility in this relationship?
Ian Hillis
I love, where you’re going at the end. What are the types of questions I need to ask myself as a software partner coming into this type of a conversation? So, who do I want to be? What do I want to accomplish? What are some of those other ones? I can imagine, there’s some around technical capability and integrations across all of that, or what is the maturity of my sales team and go to market motion? What other questions should a software partner start thinking through before they start to engage in a conversation with you?
Brad Pinneke
Yeah, I love that. And I think, what you know, you mentioned the two big ones, obviously. So, what I would say is, I think they need to really look at, you know, I think they need to think customer backwards, right, like, what am I going to bring to my customer? And I say it that way, because then I need to understand, if I can’t explain to what I’m going to bring to my customer, the value of what my services might do for them. This can be pretty hard for me to sell them. So, they need to sit down and go, okay what am I bringing to that customer? And maybe some examples are that like I hear, this is one most common thing I hear Ian is, wow, I have to go to this portal to get my transactions. I have to go to this portal to see what my balances are. I have to go to this portal to understand where my chargebacks sit today. And then, by the way, I then go into the software to run kind of my revenue type reports. And wouldn’t it be why do I leave the software, you know? And then, so I think that’s one of the most important things that often gets overlooked, is what is Embedded Payments going to do? And then, do I have the capabilities to do that? Do I have the capabilities to bring reporting into my platform, because ultimately, that’s a big driver to me. Like when you offer Embedded Payments, why wouldn’t I build reporting and metrics around merchant data that should be exposed and available to them within their software application? So that’s number one for me.
Ian Hillis
If you’re a software partner starting to contemplate these questions to ask yourself, and I guess, importantly, your teams, who are the other team members at a software company that a CEO or a CPO should be engaging to ask these types of questions, or who are you typically interacting with over the course of the sales process?
Brad Pinneke
I think there’s a couple. I mean. One, you know, first call-out is, of course, not just your head of product. But I think when people bring their actual developers in to ask questions, I think that shows a commitment level. It’s one thing to talk to the head of product, you know, the chief product officer. I think they need to go deeper. So yes, developers is a big one. And then I think most companies that are successful have some kind of director of payments, somebody that’s leading the charge, that’s owns the revenue for that and is driving the success of that program forward. And then I think you start to, you know, people from finance, you get a lot of reconciliation, you know, questions about how am I going to reconcile my credit cards, and where does that occur at. Then lastly, I think your sales team, you know, bring your sales team in to make sure that they’re accepting ownership of this process, because they’re the ones that are going to go out and sell it and that’s the other question, am I using existing sales teams, or am I bringing in payment specialists that are going to be an arm of my sales team, or an extension of them, and they’re going to lead the payment charge. So, I think that’s a big part of it. I think that’s most of it, but, but the probably the person that’s left out the most is just operations. What is the operation zone on this? Is there going to be changes? Is a customer going to call me for support, and what happens if a transaction doesn’t appear today when I thought it should have? So, I think operations. I mentioned, what I would probably consider the obvious operations is the one that probably doesn’t show up very often in the sales process that I think would be valuable for most companies.
Ian Hillis
That’s a really good call out, and standing this up and making it effective truly involves the operations team. We’ve seen that over and over again. So we framed it as, what are questions that software companies should ask themselves? What are questions they should come prepared to ask you, what are some of the best questions you’ve been asked over the course of the sales process?
Brad Pinneke
Wow, that’s a good one. I think, I think some of the best questions are, I love this one, like, what should I expect once I say yes? I think that’s a great question, because there’s, again, two sides of it. There’s the implementation side, like, tell me what the process is. Like, walk me through. And that’s a question too, right? Like, when somebody says, tell me what the process is. Okay, great. They’re talking about from day one, they sign the ink, the paper, and they’re all excited. And now we, you know, we assign resources, or somebody signs resources to it, you know. But I love the what should I expect? Because that invokes the entire, entire process, right? Not just the implementation, but, okay, I’ve signed on. What does go to market look like? One thing I don’t get often asked, but I’ve been asked for a few smart people, is tell me, should I have a beta program, and what should that look like? Who should I include in my beta? Should I go to new customers first? Should I go to existing customers first? And, and I think, you know, that’s one that’s I’ve not been asked that a lot, but when I have again, it shows kind of a deeper commitment to success and strategy around that and, and then I think also, some of the ones are like, hey, I don’t, you know, here’s my customer base. I don’t know exactly how to price. Do I do statement analysis? Do I go out with the price? Do I include, you know, when they just ask, generally, like, how do I build this in for value, right? What’s my value prop to my customer, and how do I sell that value in terms of payments? Those, those are the best ones I’ve heard. And then obviously the one that really is seldom asked, but is a great one, is, what resources do I need? Brad, tell me who’s not on my staff today that should be on my staff? I’m going to go ahead and answer that even since I get asked it is, I think retention. Most people don’t think about retention. When I say that, like, what do you mean retention? And the reality is, us as payments company, and we, we do a lot of analysis around retention. Software companies don’t. And so that’s the most surprising answer I give them. You know, they’re thinking director of payments, whatever it might be, but retention is the one that when somebody really looks at the full cycle of it, that’s the that’s probably one that I’ve rarely been asked but, but I love the question, what resources don’t I have today?
Ian Hillis
Well, those are fantastic questions as they think about what you wish you were asked across I think what it also highlights, Brad, for me, is just the deep expertise as you started to answer many of these questions, we’re just scratching the surface here, and it shows the importance of selecting the right payments provider throughout the course of this. It should be a two-way assessment throughout all of that. What advice do you have for software companies who are actively vetting payments providers today?
Brad Pinneke
I get asked that a lot in casual conversations and I think if I put myself in their shoes. The advice I give is, set aside price, right? Set aside cost. I mean, it’s a component of everything we do, but make that further down the chain. And what I would say is, really, really. Think about what’s going to have the most impact to your customers? Because if you make it so easy for them to adopt, and you give them all the value reasons to adopt, then the rest of it really becomes much easier. And so, I would say back to start with your customers. Think about what’s important to them, poll your customers, ask your customers, like, hey, if we did this, what would you think about that? You know, I know it’s a big topic, but Embedded Finance, what if we offered this to you? You know, how would you feel about that? I think you know, the ability to go back to your customers and ask a question is a strategy that you should start with when you start thinking about picking a platform and then laying out a strategy based on what would be successful in their eyes, and building backwards from that, I think is a great, is a step I would take if it were me.
Ian Hillis
I think that’s fantastic advice. And coming from an industry legend. Brad, I can’t thank you enough for taking the time to be in the show. I know you have a very busy schedule, but this is amazing.
Brad Pinneke
Always time for this. For you, especially.
Ian Hillis
Excellent. Well, thank you everyone for joining. 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 will thank them for thank you to everyone for joining us today, and I look forward to continuing the conversation in our next episode.
