Global Payments Integrated President Bob Cortopassi recently spoke with Thulium CEO Tamara McCleary about recent changes in the payments landscape, and what’s in store for the future of payments. Read on for the insights he shared.
So Bob, this has been such an incredible time and I think nothing, no industry, has not been touched by what we've all been going through in a global pandemic. And so payments is - is not excluded. And when I think about the future of payments, you know, I - I see the landscape scape changing, and I'm thinking you must too. And you know, one thing that I consider a lot that I've seen, even before COVID hit, was how personalization was such an important topic. And everybody talked about it, but I thought since I have you here, I could get the inside skinny and scoop on how you see the payments landscape changing in the future. And then also, let's - let's narrow it down five to ten years. How do you see it changing in five to ten years? And, you know, where's this personalization going?
Yeah. So, great call-out - personalization. I think for the younger generations, this is something they - they're growing up with and they're expecting. They're experiencing it on social media in the ways that they interact in some of the - the ecosystems and marketplaces where they're growing up and making virtual friends and having real-life interactions in a virtual world. For some of us, that's - it's a little bit of a foreign concept. And I think that the - the rise of artificial intelligence and machine learning that lets us know more about ourselves, or lets systems and the people that we interact with online know know more about us, creates the opportunity to engage with either the people we do business with, our customers, our partners, vendors, all the folks that we deal with in both our personal and our professional lives in new ways.
And that doesn't just stop at communication; that extends to commerce. Whenever people engage together, there's an exchange of value in the business world. And I think that opportunities to pay whether that's truly, you know, contactless in the sense of no card, no terminal, the Uber experience of getting a service and walking away and payments are transparent and invisible and seamless. You know, all the way up to things like experiences that we've had during the pandemic, where businesses that are traditionally face-to-face over a counter, taking your pet to get care at a veterinary hospital. You know, we've had to rethink how to engage with those people and walking out to the car and handing a credit card through the window and going back inside, that's not an efficient way to do business. And so I think that we'll continue to see the digitization of payments, but more than that, contactless in a new way or more of the extreme case, like Uber that we talked about, where it's not just tap-and-go at a gas pump or at the supermarket checkout, it really is, you know, a hands-off virtual, fully digital interaction experience.
You know, also I'm thinking with the commoditization of payment products, solutions, you know, how do you address the margin compression on the share of economics that's happening in the integrated world?
Well, I think that it's right to point to the contraction of margin, and that happens anytime a market matures and things become commoditized. And I think that something that happened twenty years ago that was cutting edge and breaking news about the ability to pay with credit, debit cards, or maybe in the last ten or fifteen years, the ability to pay with a mobile wallet, that's no longer unique or differentiated. There's a lot of work. There's a lot of - there's a lot of blocking and tackling that goes into making sure that when you show up at the optometrist and hand them your credit card for a new set of contacts, that that gets handled and everybody gets paid and all the right constituents are dealt with, but that's not differentiated anymore. And so I think the way that we've chosen to approach it is to become a commerce enablement partner to our partners - the software vendors that we work with - and ultimately to the customers of theirs that are small- and medium-sized businesses.
So we're not just looking at, how do we make sure you get paid for services, but how do you engage with your customers in this new world where it's not just across the counter or by phone or on a website; it might be via social and it might be via text message. And there might be text to pay and electronic invoicing and all those sorts of things. But embedding those experiences inside of the interactions they're already naturally having. So, taking a practice or a small business or a retailer or a restaurant or a vet who is used to doing business face-to-face and giving them the tools to do online appointment booking and scheduling and complete all those forms that everybody always wants you to fill out and do those online so that you're check-in experience is streamlined and then injecting commerce opportunities where they make sense. Where I want to pay you and you want to be paid, we want to provide the technology services that help them to do that.
So that's what we're doing on the kind of technology side. And then at the merchant level, at the individual small business owner level, we want to provide them tools to be successful. We want to give them the sort of analytics tools that they can only get from somebody who's got insight into their core business technology system, as well as the payments and the funds flow that they need to cashflow the business. But we want to take it a step further and, and add on things like social reputation management. You know, twenty years ago, or fifteen years ago, the only time you read a review of a business was in a magazine or in a newspaper, or, you know, maybe in the last ten years, you might've found it on a blog or something like that. But today the customers of the business are the number one reviewers of businesses.
And that's happening on all of these social and review platforms, and small businesses need tools to know what people are saying about them, but also use this as a forum to engage their customers and level up the experience that they're delivering. So, that was a lot, but kind of wrapping together all of the suite of technology, the communications and interaction, injecting commerce opportunities into those, and then sort of some of the tools that small businesses need to manage more effectively and grow in this new digital environment.
You know, one of the things that you said, I really want to highlight here, and I was trying to capture it as you were talking, going, “God, this is like a mic drop moment, Bob”. You really, you said, “embedded in their day-to-day experiences,” which I thought was pretty profound. Like, it's something to really unpack, because it's that embedded into the experience piece. And so, I'm wondering if I can dive down a little deeper and ask you, what do you actually see as the future of day-to-day payments? You know, the transactions, interactions. You know, will consumers still be carrying wallets in 2030?
Well, I'm not going to make any date-based predictions because everybody likes to come back to those later, right? But I’ll work in reverse, I guess. In terms of the wallet question, we were asking that question a decade ago. Are we still going to be carrying cards in our wallet in five years? And I think, prior to the move to contactless, very few people saw a benefit to digital wallets. It's a cool thing. And lots of people carry a phone anyway, and so they started to try it out and, certainly the usage of things like Apple Pay® and Google PayTM and Samsung Pay®, you know, the “Pays” sometimes we call them, the wallets, digital wallets, are getting more traction, but it still doesn't really provide a differentiated experience, in most cases. It's not particularly faster than pulling a card out and swiping it or tapping it.
But I think that COVID, and the experience we've all had in this pandemic where there's both a personal and a public health implication to some of the interactions we have, I think this could be a catalyst for people's adoption of this as a first step to really a truly contactless experience, which to me means, you know, an idea that the people I do business with regularly know how I want to be interacted with. And part of that interaction is payments. So if they've got a card on file or I've got a card on file with them, or through a third party or whatever, then transactions become about identifying me, not identifying my card anymore - back to the Uber experience.
Once you know who I am and how I want to pay, we can be done with the exchange of data and cards and phone taps and all the rest of that. I can consume whatever it is I'm trying to get from you, a service or a product or an experience. And I can walk away and you feel good that you're going to get paid. And I feel good that you've gotten paid, and it's been a good experience for everybody.
So I think in a generation and future generations that continue to value experiences over things, I believe that this is going to be a pivotal moment for all businesses, but I think small businesses in particular have the opportunity to really lead here and provide differentiated experiences that sometimes the big box guys aren't yet equipped to provide and differentiate themselves in a market full of noise and full of - a global economy, a global marketplace.
You know, it was interesting because exactly two times in the past week, I tried to use my Apple card on my phone. I didn't have the physical card on me at the time. And I was in a physical location. Of course I was wearing my mask, but they were unable to take it. They needed the actual physical card. And I thought to myself, “Wait, I thought we've come a lot farther than this, but, you know, it was interesting that I was unable to - they wanted the physical card.
And then, you know, you brought up something interesting that I'm interested in, you know, as a technology futurist, is looking at biometric authentication. And you got me thinking about it just when you said, just knowing who we are versus having, you know, verifying the physical card, knowing that I'm who I say I am, and I can have this transaction. So those kinds of things float around in my mind. I don't know if you have any commentary on that. You know, this is just, you know, the world that I'm swimming in. And so I wanted to ask you, what do you think are the top trends that we should be watching out for? You know, how will digital payments actually evolve?
Yeah, so on the biometrics question, I'm interested in that too. And I think anybody who's got a recent mobile phone, whether it's a, you know, an Android or an iPhone or whatever, the experience of using the pay app within a website. So to me, that's, you know, dramatically better than any other commerce experience I can think of minus the, I walk away and, you know, the payments already happened, but you know, I'm on a website or I'm on an eCommerce site or I'm on a booking site and it gets to the payment thing. And literally I just, you know, double-click the button and, and look at my face or my face looks at the phone, or I touch it with a thumbprint and I'm done and I don't have to go, “Where did I leave my wallet, it’s in my office, go find my card.”
So I think that, yeah, there's definitely something to that outside the privacy of your home or your car or your office like we experience it today. In my personal opinion, the barrier to entry here is just the scale and the cost of the solutions. I mean, I think to deploy this in a wide scale, we’re already doing some of this. You go to an airport and you go through a CLEAR kiosk and that's, you know, all biometrics, and we've just talked about the payments on your phone. But I think to deploy that in every point of sale and every kiosk and every drive-through window, you know, all across the world, that there's a, there's a scale and a cost problem, and a little bit of a speed and performance problem too when you're dealing with a bunch of folks.
But in terms of the trends and where we're going, I think that a lot of what we're going to see is a lot of what we've already seen. I think we're going to see more - less of a paradigm shift than an acceleration of some shifts that we've already seen happen. And that's around the experience-driven commerce engagements, really the frictionless types of payment experiences that we've talked about, the acceleration of contactless and not just contactless like tap-and-go, but true contactless - a disconnected experience where maybe I get a text that says, “Do you want to pay with a card on file?” And I just say, “Yes,” and we're done. Or I - it uses, you know, proximity sensors. I don't have to go and tap a thing; it knows I'm in range and it knows who I am, and I can do these sort of things. I think we're going to see a continued proliferation of that kind of experience so that whether we carried a wallet or not, at some point, the contents of the wallet become less important and we have more kind of persistent control over who we are, how we want to be interacted with, and how we want to pay for the things that we pay for.
Wow. I'm going to want a transcript of this interview. That's so good. You know, in the future, when we look back on 2020, what do you think will have - you know, what's going to have been noted as the biggest distraction for ISVs?
You know, I think the temptation in any business is to think about, as you mature, to think about vertical integration. Apple's a great example of this; Rolex is a great example of this - companies that have expanded to a level that they control every part of their business experience, their supply chain, everything else. And the fact that I can only come up with two off the top of my head, Apple and Rolex, tells you that that's not always a very successful strategy, and yet I think we're seeing a lot of ISVs get lured into that same sort of a temptation around the payment facilitator concept. The idea is, “Hey, payments are gonna happen with your customers. You're in the software business. You can get a greater share of the economics if you just become a payment facilitator.”
And that's almost, it's going to be a broken analogy, but, you know, that's almost like saying “You're a car manufacturer - if you just built a bunch of roads, you'd have more places for people to drive,” as if the, you know, public works and infrastructure planning and civil engineering and road construction was the same thing as being a car dealership, right? And that's what some people are encouraging and asking ISVs to do. Hey, go figure out how to build the technology, to handle payments and build a distribution engine that can do that and build the subject matter expertise to handle risk and underwriting and credit policy and ongoing monitoring and security and privacy and pricing and negotiate and all the rest of that stuff with players that they don't even know.
We’re seeing a lot of ISVs who've wasted a lot of time and money trying to build a strategy like that, really turning back and saying, “Hey, this isn't our core competency. It's not our area of expertise. This is an area in the kind of build by partner evaluation, where we really need to partner.” And, certainly, you know, we're in the business of helping both; we enable payment facilitators, and sometimes that makes sense, but we also, you know, the vast majority of ISVs are better served through partner relationships in our experience. And I think they're going to look back at this as a time that a lot of money and time was wasted chasing, you know, a pot of gold at the end of the rainbow that didn't exist.
You know, I think what you're bringing up is just true for business today. It's really building a powerful ecosystem of partners because it's absolutely impossible to be all things to all people. There isn't even any enterprise that can be all things to all people. You see - I mean, nowadays you see all these partnerships between what we used to think were competing, you know, companies, and it's because, you know, if you do something really well, someone else does something really well. You have more power in, you know, harnessing each other's expertise to be able to be better than you are on your own. And I think when you talk about that, that's where I see - you're removing barriers to entry for these ISVs to, you know, really harness more money, but also grow and do the things they do best. You know, with what you do at Global Payments Integrated, you know, how do you see the company itself; you know, as CEO, you're setting the vision, you're setting the pace for your organization, where are you going to take your org in the next five to ten years?
Yeah, you know, I think it was really important, you talked about bringing together partners who can help a business focus on their core competency and grow and scale in ways that are profitable and successful. And that's really where we're focused, is on being a true partner. A lot of times we throw that word around and partnerships aren't very partnering a lot of times. The relationship is very vendor/consumer, and sometimes even antagonistic.
And you know, one of the things that's really important to us inside of Global Payments Integrated is what we call the servant mentality. And what that really means is that everybody inside our organization comes to work every day and says, “I'm the least important person today at work. Who am I going to serve and how am I going to serve them and make their day better?” Whether that's their coworker, whether that's an ISV partner they're working with, or whether that's a merchant or ultimately an end consumer of the services.
And so when we think about the sorts of services that we provide to ISV partners, not just the technology and the speed of integration, which is certainly a focus or, you know, working collaboratively to build compelling go-to-market strategies and solutions together. But it's also all of the other things that happen after they say yes to us, and before money starts flowing in the relationship. How are we going to target customers and give them a differentiated experience that they find valuable and they're happy to pay for, that increases their satisfaction with the software relationship they already have with one of our partners, and helps them ultimately to be more successful, small business people, whether that's with marketing support, with some of these customer engagement strategies we've been talking about.
We have a product called Callpop that we've rolled out not very long ago, that fully integrates the telephony experience, the text messaging experience back into business systems, CRM, ERP, that these businesses are already using and lets them provide a differentiated consumer experience and also transact with them in the ways and the times that are appropriate and feel good to the consumer.
So I think that's the way we're positioning ourselves as less about an infrastructure provider and financial services and moving money around. Because like I mentioned, at the beginning, that's really already a commodity. What we want to do is come alongside our technology partners and our small business merchants and help them to fill in the gaps where we think we do have a subject matter expertise and is in our wheelhouse and help them to be better at what they do.
You just made me feel a whole lot better because, you know, honestly, when you think about payments and such, a lot of times, the human is left out of that equation, and, you know, employee advocacy, really treating your internal stakeholders well. And by the way, I do know a few folks that work at Global Payments Integrated. So I can say for sure, your story is corroborated because I've heard great things in your org, so I'm sure you have no problem whatsoever with recruitment.
I'm glad to hear that. Glad, glad to hear that the message is getting out there and people are catching our vision.
Word on the street - word on the street is, but no, I mean, so many times you hear companies, you know, give their, you know, their line and you're like, “yeah, okay,” but really where the rubber meets the road is, how do the employees actually feel? And, you know, I think that, you know, I always think you know them by their fruits, and when you're treating your internal customers, your employees, really well and they're actually sharing that, I think it definitely does affect all your customers, whether those be your partners or those be your partners’ customers, but it does make a difference.
And one of the things I think, as we talk about more and more technology, we start talking about biometric authentication, all of these things that can be rather mysterious to a lot of people is, we're getting down to the issue of trust. And certainly with, when we're talking money, we're talking trust. And so having that deeply rooted human component, that care and consideration, I’m just so relieved to hear you say that. So, and for anyone watching this, I had no idea what he was going to say. So, Bob, thank you. I really appreciate that. And I hope lots of people get to see this interview because I just really appreciate the humanistic side of technology business and financial transactions.
Well, thanks Tamara. You've made a - you’ve made a topic that's not always exciting and fun to a lot of people an enjoyable experience. So, thanks for the opportunity to talk to you, and I hope we get to do it again soon.
Oh, I do too. Thank you.
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