Payments On Fire

B2B Payments

Episode 169 – Catching Up on the State of Payments – Robin Gandhi, Nium

George and Yvette welcome back Robin Gandhi in this episode of Payments on Fire®. Formerly of TripActions (Episode 146), Robin is now the chief product officer of Nium, a firm specializing in bringing cross-border payments capabilities to banks, fintechs, and large and medium enterprises. 

Glenbrook has been taking a deep dive into Global Payments lately – check out recent recorded webinars. This conversation with Robin highlights the complexities and considerations involved in moving money across borders and the importance of in-country access to domestic payment systems. 

George Peabody:

Welcome to Payments on Fire, a podcast from Glenbrook Partners about the payments industry, how it works and trends in its evolution. I’m George Peabody, co-host, along with Yvette Bohanan of Payments on Fire. In this conversation, we’re talking about global B2B payments. And before we get there, Yvette, great to see you.

 

Yvette Bohanan:

Georges, it is always wonderful to see you. I love when we get together and talk payments. 

 

George Peabody:

Doesn’t happen enough.

 

Yvette Bohanan:

Doesn’t happen enough.

 

George Peabody:

So Yvette, among the many remits that you’ve got at Glenbrook, of course, you’re a pillar of the education team. We’ve got some great education programs coming up here. I wonder if you’d take a minute and tell us what’s ahead.

 

Yvette Bohanan:

I’d love to. So we have been focusing this quarter on fast payment systems, and we’re just getting ready to have a webinar on the rise of domestic fast payment systems, and that is a tee up to two things, a global insight workshop, which is a two-day workshop delivered virtually on how fast payment systems are evolving, modernization efforts that are occurring all over the world today, and how those modernization efforts are starting to connect together, like Kinex and Lego blocks-

 

George Peabody:

Oh my.

 

Yvette Bohanan:

… and really starting to show the promise and potential of this work that’s been done by central banks and regulators in their countries for golly, a decade. And now, we’re starting to see these regulators, the central banks, starting to talk about work related to how do we change and transform cross border payments with these systems? And it’s fascinating. And of course, our global practice has been focused on this for a good many years, over a decade, and they’re expanding their work now to help our commercial clients, financial institutions all over the world, businesses that want to take advantage of these changes because you’re reducing liquidity risk, you’re improving speed and efficiency in your operations. There’s a lot to do to make it happen, but the promise is really starting to expose itself. So we’re super excited about the topic and we’re looking forward to seeing folks and-

 

George Peabody:

And some of that topic we’ll be discussing today with our guests.

 

Yvette Bohanan:

I think it is the perfect tee-off to today’s guest and the work that he’s doing and leading.

 

George Peabody:

Well, great.

 

Yvette Bohanan:

So I’m not going to spoil it too much. I’m going to let you introduce him.

 

George Peabody:

Well, let’s get right to it. We’re really happy to bring back to Payments on Fire Robin Gandhi, who is the chief product officer of Nium, a firm specializing in well, cross border payments capabilities and bringing it to banks and FinTechs, and of course, large and medium enterprise. Robin, welcome. Well, I was going to say welcome home almost, but welcome back to Payments on Fired.

 

Robin Gandhi:

I’ll take it. Welcome home. I’m in. No, great to be here.

 

George Peabody:

This is your podcast home. I love it.

 

Yvette Bohanan:

Everyone needs a podcast home, Robin. 

 

George Peabody:

Don’t you think? Yeah.

 

Robin Gandhi:

Yeah. This is a place where you feel comfortable, safe. No, this is great. 

 

George Peabody:

Well, see how safe it truly is in this conversation.

 

Robin Gandhi:

Oh, hey, George, come on. Seriously.

 

George Peabody:

So about a year ago, we had Robin on and actually on episode 146 when he was with TripActions, a travel expense management firm. Robin, were you chief product officer at that outfit? Is that the right? 

 

Robin Gandhi:

Well, so within our liquid offering, I was running product ops engineering and design. So-

 

George Peabody:

Got it.

 

Robin Gandhi:

… I had a bit of everything, but it was a startup within a startup, right?

 

George Peabody:

So what I loved about that conversation was that we were talking, dawned on me out of that conversation, was that we were really truly talking about a phenomenon, which that I dubbed multiplayer FinTech, where here is TripAction relying on a number of horizontal FinTech players, like Modern Treasury and Stripe and others to bring financial services up into the vertical solution that TripAction is selling.

 

Robin Gandhi:

Yep.

 

George Peabody:

And it really got to that embedded FinTech phenomenon that we’ve seen where increasingly, financial services are being exposed at the point of need, which is really, really intriguing. So I was all into that model, and then next thing I turn around and Robin, you’ve left TripActions and you’ve gone to Nium, which really interesting company and you’re going to tell us a lot about it, but we know it’s based in Singapore. We know you’re focused on essentially cross border B2B payments.

 

Robin Gandhi:

Correct.

 

George Peabody:

Not exactly an empty space. There are plenty of PSPs out there. So we got to ask you, what’s so compelling about Nium and the thesis around the company that took someone with your experience because you’re from ad gen as well so you know the acquiring business really well.

 

Robin Gandhi:

Yep.

 

George Peabody:

Now you’re moving bulk money across border. What’s the deal?

 

Robin Gandhi:

What is the deal with that?

 

George Peabody:

Yeah.

 

Robin Gandhi:

No, look, I think we’ve probably talked about this in the past, but like when I was at Adyen, when we were accepting money for a lot of our merchants, it was pretty clear that the outbound side, so moving money, was extremely difficult. It didn’t matter which marketplace we talked to. Almost every single marketplace would say, “For me to get money all over the world, I have to use multiple different parties to do it.” And typically, they weren’t super happy with the provider that they were using, right? Because it really took putting together this amalgamation of different providers together.

 

Robin Gandhi:

And so when I was at TripActions, I really saw that B2B payments was becoming stronger because in the end, what we were doing at TripActions was we were generating virtual cards to pay travel suppliers. We were generating physical cards to essentially manage corporate spend. And so then you get to this place where you go, “Man.” During COVID, we innovated hard on B2C because you didn’t have a choice, right? If you were a business and you wanted to take money, you had to go digital and you had to go fast, right?

 

Robin Gandhi:

But I think the other thing that we realized as I was at TripActions, was that any CFO you would talk to, the first thing that they would say is, “I want to improve my B2B payment strategy.” And the thing I knew from my time at Adyen was that money movement side, the cross border money movement side for B2B wasn’t working super well. And so when I talked to the team at Nium and especially Prajit who’s the CEO founder, one of the things that I realized and what attracted me to it was that we had focus on building out licenses in multiple regions.

 

Robin Gandhi:

Anytime anyone would tell me in the past, “Hey, what would you do?” I’d say, “I think we need to solve this money movement problem, but don’t ask me because I don’t have the energy to go to every single region around the world and get licenses. What was really interesting for me was I said, “Okay. Look, they’ve already built all of these licenses in multiple regions to basically have direct connects.” And that was one of the things that we did really well at Adyen. We always talked about end to end connectivity so that you no longer have to blame the aggregator. You no longer have to blame somebody else. You can basically own it all the way through. And the nice thing for me was, okay, hey, they have the licenses, there’s already a lot of volume flowing through. Obviously, there’s stuff that we need to change. We need to think about the licenses in potentially a different way as we bring on different customers. But a lot of that groundwork had been done.

 

Robin Gandhi:

And so the more and more I talked to the team, I thought, “Wow. This is what I’ve been talking about.” For the last seven, eight years, we’ve known that this is a problem that needs to be solved. And it feels like this is a place where we can actually solve it. So there are a bunch of other providers and I would say some are doing it well and some are not doing it so well, but the reality is you and I know. How big is that B2B payments market? We’re talking about a 50 trillion ish market. Even if you say that startups can capture, worst case scenario, a trillion of that 50 trillion, that’s not a winner takes all game. It’s a big market, every CFO is talking about it. And so for me, the opportunity made a lot of sense.

 

Robin Gandhi:

And then on top of that, the more I met the team here, just such an amazing team. Very, very balanced. It’s hard to find great CEO founders that are balanced and humble in that way, where I got to come in on the first two weeks, talk to Prajit and say, “I don’t want to do that, that and that, and we’re going to do this, this and this.” And he said, “Sounds good. I trust you. Let’s just do it.” And so I said, “Yep. I made the right choice. Good move.” So yeah, no, I’m pretty happy.

 

George Peabody:

Well, you’ve got two homes now in 2022. Payments on Fire and Nium. That’s great.

 

Robin Gandhi:

Yeah.

 

George Peabody:

So thank you for that. Why don’t we just back up for a sec and just give us the, why don’t you give us the elevator pitch? What do you tell us, tell the world about Nium and this differentiators that you’re focusing on?

 

Robin Gandhi:

Yeah. Look, we are a global money movement platform that is modern API first, and we basically want to be able to cover as much ground and global coverage as we possibly can. We want to be able to move your money, whatever way you want, as fast as you want. So through the banking rails, through the card rails, through wallets, through cash, through crypto. Basically, that’s where we’re heading towards. We are already moving a lot of money on bank and card. We’re starting to add wallet, we’re starting to add cash, and crypto is getting there as well.

 

Robin Gandhi:

So I think for us, this is where the big piece of the puzzle is and that’s what we’re helping companies do. And I think that if you think about what it really means is that somebody can be anywhere in the world, they can have virtual bank accounts with us, and they can use it to service their underlying enterprise needs in whatever way they need. And I think that, for us, is pretty compelling.

 

Yvette Bohanan:

Let’s talk a little bit about that.

 

Robin Gandhi:

Yeah.

 

Yvette Bohanan:

Because that is compelling. You said that Nium went out and got licenses, and presumably bank accounts, in all of these regions. And when you talk about your customer, and your customer just to be clear here would be the treasury, person, the CFO of a company trying to make payments out or receive funds in in a particular country. Is that right?

 

Robin Gandhi:

Correct. Exactly.

 

Yvette Bohanan:

Okay. So if we’re talking about that, what does the company, your client, the customer have to do to have one of those virtual bank accounts? Presumably, they don’t need to have a legal entity in the country, or do they? Let’s go really basic here.

 

Robin Gandhi:

We operate in multiple regions. So we operate in Europe, the US as well as a lot of countries in Asia. And then obviously, we’re based in Singapore, so Singapore is probably the strongest. As long as you have an entity in one of those regions, then you basically can get one of these virtual accounts and those virtual accounts can work anywhere in the world globally. You can also be based anywhere in the world, if you are, depending on what type of organization you are, we can also give you an account in Singapore and be able to allow you to transact where you want.

 

Robin Gandhi:

So there’s nuances within some of the things that we can do, but essentially, who are we going after? We’re going after big global enterprises. Most global enterprises are headquartered in US, Europe, UK, Singapore, Australia, and one of the things that I’m focused on is expanding. So how can we continue to expand it so that we can take in more and more customers, but that’s how we look at it.

 

Yvette Bohanan:

So most global enterprises historically, when they’ve wanted to move money one way or another, have turned to their banks first and the treasury services area of the bank. They’ve had the point of view in the product, in that space, that was a very bank-centric view. What is the point of view of Nium? Is it a tech centric view? Is it a treasury centric view? How do you approach this differently than [inaudible 00:12:28]?

 

Robin Gandhi:

I think it’s a good question. I think for us there’s two pieces of it. It is tech centric. So if you go to anyone and say, “Hey. Do you want to connect into a bank?” If we go back to the conversation that we had when I was at TripActions, why were we using companies like Modern Treasury? It’s just a lot easier to connect into a modern API infrastructure. So the tech side of it is absolutely one big piece of it. And the other piece is that once the funds are sitting within our system, we can move it with more ease, faster and lower costs. Versus if you do it through your bank account, you basically are paying for every single transfer, and you’re paying usually large sums and it may take you a while for you to get the money there.

 

Robin Gandhi:

So I think that if you think about, yeah, what we’re providing, it’s first a tech infrastructure, and secondarily, all of these benefits, speed, efficiency, cost, and of course security. So I think you add those in, then it becomes pretty compelling. And that’s why you see others similar to us that are in the market because there’s clearly a need from companies to say, “Hey. We need a better way to do this.”

 

Yvette Bohanan:

So you’re sitting in Singapore. You’re headquartered in Singapore, which is a hub of innovation right now, whether it’s distributed ledger technologies going on, we’ll talk about that in a second, or fast payment systems. And they’re doing all kinds of work as a hub to facilitate better, faster payments, more certainty, speed, all the things you’re highlighting, security, harmonization of regs to some degree, in that region, and you’re talking about APIs that are modern. So you’re in this hub. You’re in this universe of innovation, but when you look out across the world, and we’re just going to focus for second on account to account type payments, a lot of this stuff is still under the hood batch. And then you have the new fast payment systems and they’re actually API based real time. When you’re going into a country, how are you thinking about your services and what you’re connecting into and what you’re building into? Are you seeing the need to keep both going?

 

Yvette Bohanan:

We always get this question in our workshops. When are cheques going to go away? When are [inaudible 00:14:39] going to go away? And we actually have a hard time convincing a lot of people out there who are new to the industry that, yeah, even if you have an API that’s facilitating an ACH payment, that payment’s still operating in batch under the hood most of the time. So there’s a little bit of slight of hand going on in some of the tech stacks out there. How are you approaching that? Or how are you starting to think about this and balancing all that?

 

Robin Gandhi:

Yeah. Well, first of all, just on your question about being in Singapore, I am in San Francisco. We’re co headquartered now between San Francisco and Singapore with a lot of our senior leadership in San Francisco because we think that there’s a pretty big opportunity within this region as well. But to answer your question on Singapore, and just thinking about the innovation that’s coming out of those markets, this is why we think it’s really interesting to be in Asia. You can move money in a much faster way. You don’t have to go into those antiquated systems. And so for us, if we think about where we want to place our bets and where we want to essentially integrate, I think it makes a lot of sense for us to double down in areas like Singapore, which with the fast system, there’s more that you can do. And so that’s what we’re essentially doubling down on.

 

Robin Gandhi:

Now, to your point, in the end, we want to be global in reach. And so there will be some systems that you connect into that are not real time, that are a little bit clunkier, and I think you just have to do it that way. If you go back to why I said, “Hey, I personally don’t want to build it completely from scratch,” is that essentially, you do have different types of systems that don’t work exactly the same and then you have to connect into it. But I think that’s what we’ve done well. We’ve essentially said, “Okay. We understand which ones are real time, which ones are not.” Today, we connect into, I think, 85 different countries from a real time perspective. And a lot of it probably is a factor of the fact that we have started in Asia and Asia tends to be a little bit more cutting edge. If we think about what’s the next few countries that are going to have their own centralized digital currency from a government perspective, you know that it’s mainly going to come out of Asia.

 

Robin Gandhi:

And so I think that market is just thinking a little faster. You could obviously look at it from the flip side and say, “Hey. Maybe they should be thinking about the regulations and the risk and the compliance,” but I do think that there is this aspect of the region where it’s moving a lot faster than a lot of the other regions. And so I think it’s a benefit to us, whether it was intentional or not, it is a benefit to us that we are based out of Singapore in a lot of the stuff that we do, and we can provide a better experience to our end customers in that way.

 

Yvette Bohanan:

Yeah. That makes perfect sense, and I completely agree. No pun intended, they’re moving faster. So yeah. It’s an exciting place to be anchored. You’re anchored in two really exciting cities.

 

Robin Gandhi:

Oh man. Yeah, no, I know. It can’t be any better. And I get to go to Singapore, which is a good added perk. I can’t complain about that either.

 

Yvette Bohanan:

Absolutely. Absolutely.

 

George Peabody:

You both have spoken to the benefit of increased speed.

 

Yvette Bohanan:

Yeah.

 

George Peabody:

And when I’ve thought of B2B payments very generally, the need for speed is actually … Well, when I ran a small business, my big customers, they were never in a hurry to pay me, and I did good work. It was just their policies. How are they using speed today? What is it about speed that is giving them some advantage?

 

Robin Gandhi:

Yeah. I think you’re right. Look. In the end, a lot of it comes down more to cost and efficiency than it does to speed because in a way, you’re right. B2B generally doesn’t need necessarily the fastest speed. But I think when we talk about speed, some of these systems take a long time to clear. If we’re talking about speed, the difference between minutes and hours, nobody cares, or most people don’t care. I’m not saying nobody cares, but most people don’t care. But when we’re talking about 24 hours versus three days or four days, that’s where it becomes problematic because we live in a different world. Things move fast. To your point, they don’t move that fast that you need the money in a minute, especially from a B2B perspective. But yes, I think most will come to us first for the efficiency of having this global network, having great costs and being able to do this through modern infrastructure. But in the end, everyone’s saying, “Well, do you have real time? How can you make that happen?”

 

Robin Gandhi:

And I think it’s an add-on. I think if you were to really dig down and ask a CFO, “What matters to you most?” I’m pretty sure it’s probably closer to the bottom of the list if we talk about cost efficiency, modern, things like that.

 

George Peabody:

That’s great. So one of the features by design built into a lot of these fast payment systems is actually the ability to represent the business documents that the payment is for, for example. And I just blew my mind when I started understanding ISO 20022, for example, and that being a native messaging platform for a lot of these systems. And yeah, as I keep asking about it year after year, is how much usage is taking place. And it’s still, I think if you look at your list of, you ask the CFO their hierarchy of need, ISO 20022 and sharing this metadata is somewhere down around their shoelaces.

 

Robin Gandhi:

Yeah. Yeah. No. Maybe even below that.

 

George Peabody:

Oh man.

 

Robin Gandhi:

No, because you’re right. Not many are using it and to be honest, I also think that when we talk to a lot of our larger customers, they don’t even want to throw it in there. They just want to give us a flat file and say, “Hey. This is where we want you to send it to.” Or, “Let’s just use the API and let’s just knock it through.” I don’t think that they’re asking for that level of detail, or at least we haven’t. We haven’t seen it being used.

 

George Peabody:

I think that’s really interesting, just to draw a line under the fact that there is such a thing in payments as good enough.

 

Robin Gandhi:

Correct. I think you’re right. In the end, what do you do? You want to move money from point A to point B. Now, a lot of these other factors that we’re talking about, like speed, adding additional details, it can be helpful, but where does it really make a difference? Because even if you think about my world, at TripActions and now, I don’t think we mentioned it at the top, but we bought [inaudible 00:20:56], which is the third, I guess now the second largest VCC, like virtual card provider for travel agencies. So similar stuff that I was doing at TripActions, but doing at a much larger scale.

 

Robin Gandhi:

In the end, virtual cards, you’re just sending the card. The beauty of it is that on your side, you can reconcile better, but you’re not sending those details through on the virtual card. And I think that’s the same way that I think about any of these payments. When you use your payments infrastructure, all you want to do is move that money from here to there. All the other stuff you will obviously take care of on the back end, whether it’s yourself or a third party provider, and I do think that it makes it easier. And that’s why the travel industry got so used to using virtual cards because from a reconciliation perspective, it just makes it so much cleaner, but you’re not sending that data through and it might be because you don’t want to give your provider that data. It might be because you don’t want to put that data in there, but you’re still making use of the fact that you have that granularity, but you’re just not sending it through. I don’t know if that’s helpful, but that’s what I’ve noticed.

 

George Peabody:

I think I better learn to not ask that question for a time until SAP and Salesforce are saying, “We’ve integrated it in,” so it’s on the generation and consumption side. And so it’s straight through processing.

 

Robin Gandhi:

True. Yeah.

Yvette Bohanan:

It’s a slippery slope too, especially when you’re operating at a global scale. Data, data privacy, data transaction details and all the regulatory scrutiny that that’s getting makes it really hard to decide, “Oh yeah, I’m going to do this.” But on the operation side, in that back office, there’s probably thousands of people out there in the world that are like, “Please give us more data so we can reconcile this stuff faster. This is so painful. I don’t know who supplies …” We talk to a lot of people and feed on the ground, if you will, that have the problem, but it’s a really complicated problem. How long do you store that? Who’s storing it? It’s not as simple.

 

Robin Gandhi:

No, you’re right. Data is so precious. Think about even on the acquiring side, when we talk about level two, level three data. You can get a break on interchange by sending it, yet most people don’t want to send it because your data is your data. You don’t want to give it up. Doesn’t matter who’s getting access to it. I get to keep mine. I’ll figure it out on my side. Don’t worry about it. But to your point, that there is this place where there is someone in the back office that’s saying who would send it? But from a business perspective, you say, “No. We’re not going to send it to them.”

 

Robin Gandhi:

So I do think that it’s when will it be worth it to send it? And maybe to your point, George, it’s like, okay. Well, once these ERP systems just make it straight through processing and it just becomes super easy, but I don’t know. Then you still run into the same data problem that we’re talking about. Do you want to deal with GDPR and all these other things in terms of where that data lives? So it’s interesting. I don’t know, we’ll see.

 

George Peabody:

Sure is.

 

Yvette Bohanan:

You just don’t know what’s going to pop up tomorrow that, “Oh. I have all this data and now it’s almost toxic in my system and I don’t know what to do with this because this regulator’s saying something.”

 

Robin Gandhi:

Exactly.

 

George Peabody:

Our former Glenbrook partner, Allen Weinberg, I love that he always talked about card data needed to be treated as essentially radioactive material.

 

Yvette Bohanan:

Yeah. It has a half life.

 

George Peabody:

Yeah, with a half life. Exactly. But you don’t want to touch this stuff.

 

Yvette Bohanan:

Yeah. It’s radioactive. And you think you’ve gotten rid of something and then it’s got this half life and it just keeps going and going. Well, can we talk about money, George, for a minute?

 

George Peabody:

I think that’s a topic that really interests a lot of people.

 

Robin Gandhi:

Wait. Are we not talking about money right now?

 

Yvette Bohanan:

Well, we’re about payments. People just never associate the two, so I try to do that on this podcast every once in a while. This is about money and economies. So you were talking about innovation in this region of APAC and what’s going on. And central bank digital currencies and stablecoins are a big deal right now, and fiat, of course. How are you all thinking about this because we are hearing, and it’s a very, if we think data’s complicated, going to digital currencies and how those are treated on the balance sheet and your treasurer brain starts to explode, because not only do you have regulation of how this stuff is regulated, who’s supporting it, a whole new language to decipher around the systems and distributed ledgers and crypto. But you have accounting principles going on where stuff that was considered cash if you’re receiving in fiat is now considered an asset. Lot of stuff to think about.

 

Yvette Bohanan:

But at the end of the day, there are people, there are stakeholders in the industry with a lot interest around, particularly stable coins. And we have close to as many stable coins out there defined as we do fiat currencies at this stage. What kind of demand are you seeing and what kind of use cases are you seeing stable coins relating to? And how are you thinking about this space? And it is pretty nascent. We get it.

 

Robin Gandhi:

No, exactly. For us, we think that crypto and stable coins and in the future, CBDC, those will all play a big part in what we’re talking about, modern money movement. So we’ve essentially said we want to play in this game and we really pushed hard on creating nodes ourselves. And then also just starting to create liquidity pools in stable coin as a first step. And that, essentially, will allow us to work with mainly just crypto companies, crypto exchanges, I would say, that are saying, “Hey, look. I need to off ramp in fiat. How can I do that?” And we say, “Hey, look. Instead of you having to send fiat to us, you can send stable coin to us and we can off ramp in fiat.” And I think a lot of others are starting to think about that. We’ve been doing it for a little bit, and we’re relatively advanced in some of the conversations, as well as some of the stuff that we’re doing with some of these exchanges.

 

Robin Gandhi:

So yeah, for us, we think it’s really interesting. I think obviously everyone’s been looking … God, I think we’ve been talking about the best application for ledger technology for now 15, 20 years. But I think we’re now there, because now as you see, to your point, stable coins, and there are so many stable coins, and then you also see CBDC starting to become a real thing. You know that this is no longer a hobby. This is something that’s real. So the way that we’re attacking it is we’re saying, “Okay. Let’s make sure we understand this really well. Let’s start helping some of these exchanges.”

 

Robin Gandhi:

And I think what we benefit from is the fact that because we’re already moving all this fiat currency anyway, and because we’re already under some regulatory, from a regulatory and compliance perspective, we’re already thinking about what’s required, it’s more manageable for us, and it’s also more acceptable from a regulator perspective to say, “Okay. Well, you guys know what you’re doing.” You also know what the rules are in order to ensure that you’re thinking about your fiat business and then this new nascent crypto side of the business, what it really takes. And so yeah. It’s always tough on the treasurer. It’s always tough on the finance team, regardless of where you are, but at least, this is where we’re heading. And because we’re thinking about ourselves from a modern money movement perspective, it fits in really well with our ambitions, our vision, and I think what our customers will want as well.

 

Yvette Bohanan:

You must feel like the ground is shifting underneath everyone. Like a tectonic shift between faster money movement, distributed ledger and all the things you’re working on. Do you think people actually, when you talk to potential customers and you’re talking with treasurers and CFOs and people out there, they want this, but do they feel the shift? Do they feel what you feel is heading up development?

 

Robin Gandhi:

I think most of them probably do not. I don’t think they see it in that way just yet, and I think that’s understandable. We’re still early days on a lot of this stuff, so it’s not like any of the CFOs, or not any of the, most of the CFOs that we talk to, they’re not necessarily thinking, “Oh, wow.” There’s been this massive shift from distributor ledger technology or from some of the things that we talked about related to Singapore in terms of what’s happening around real time.

 

Robin Gandhi:

I think the real time they probably know better than, or they can feel it a little bit more, but they probably don’t see it as a massive shift. And I think that CFOs being CFOs, they’re going to be more conservative on this. And so unless they’re working at a crypto exchange that we’re talking to, most of them are going to say, “Okay, great. It’s a good side hobby to have, but we’ll talk about it when it becomes real.” So I don’t think that they necessarily see it, but I could be wrong. There’s probably some CFOs that are excited about what’s coming and what that could mean for their businesses.

 

George Peabody:

Those are the ones you want to find, Robin.

 

Robin Gandhi:

Exactly. Can you go send them to me?

 

George Peabody:

Yeah. Okay. Well, when we trip over some, we’ll let you know. So we could carry on the conversation forever, but I actually wanted to time to us to start to wrap. So I wanted to cast back to this question around embedded payments, embedded financial services. I had an encounter with it the other day. I was able to buy a car and yeah, the dealer was happy to loan me some money. That’s been around since forever. But what surprised me was that here in the real world, they also had expanded to pitching me an insurance for my car. I hadn’t run into that one before at a dealer. And of course, so here we have financial services at the point of need. What you were doing with at TripActions and what we’re all seeing as consumers, more and more financial service offerings at the point of need.

 

George Peabody:

How do you see this evolving? Is this just going to be commonplace, or are there going to be some barriers that make it hard? What’s the evolution that you expect?

 

Robin Gandhi:

I think it is going to look. The reason that we were talking about what we’re doing at TripActions, the why was interesting for what’s happening in the industry as a whole, is that you do have more companies like us that are basically creating this infrastructure that allows anyone to basically tap into the financial services industry and basically provide those services themselves. So I think embedded FinTech is something that is not only going to stay, but it’s going to continue to grow because there’s a lot of innovation happening in the space. But outside of the innovation happening in the space, I think that everyone that’s not a FinTech is recognizing just like the guy that sold you the insurance at the car dealership, that, “Hey-“

 

George Peabody:

I didn’t buy, but nevermind. He pitched it.

 

Robin Gandhi:

You’re not supposed to buy insurance. It’s a trick.

 

George Peabody:

Oh yeah. Right.

 

Robin Gandhi:

No, but I think that the reality is it’s a better experience. In general, if you, and maybe that’s a good example of maybe if they never managed to sell any insurance because almost everyone else has it somewhere else, there will be some pieces of embedded FinTech that just won’t work. But I think ultimately, you are going to be in a place where if you want to make the experience more robust, if you want to make it more sticky, a lot of the stuff that we do in areas that are not finance related do have aspects of finance that are intermingled. And if you had to go to a third party to do it, or you had to go and take a secondary step, it’s just more painful. And also, if we talk about the car dealership, there’s an opportunity to take advantage of that revenue.

 

Robin Gandhi:

So it’s a win-win for almost everyone. The consumer gets it at the point of the … They get it at the place where they actually need those financial services. The person providing you the other service now gets a piece of the revenue that’s attached to that financial service. And then you have companies like us that are making it insanely easy to be able to provide those services. So don’t do something crazy, and maybe insurance is one of those crazy things. But as long as you don’t do something that sits outside of the realm of what the buyer actually wants or whoever you’re servicing actually wants, I think it, overall, it is a positive thing in general, for me, you and everybody else that’s out there because look, we want things right away. We want things to be relevant and contextual. This is how you do it, I think.

 

Yvette Bohanan:

I think contextual’s the key word. I’ve been honing in on data and context a lot lately. I’m trying to get some people on Payments on Fire actually to talk about data in context.

 

George Peabody:

Yeah.

 

Yvette Bohanan:

But George, if you were in your twenties and you were buying your first car and you were just getting off of your parents policy, they should definitely be offering them to you at the dealership.

 

Robin Gandhi:

Yeah. That’s a great point.

 

Yvette Bohanan:

You don’t want to drive off the lot without this, right?

 

George Peabody:

Right.

 

Yvette Bohanan:

But it’s context. It’s context, and having the opportunity to understand the context of the moment is really, really important.

 

Robin Gandhi:

Correct. That’s a really good point. The first time buyer for the insurance thing makes a lot of sense because I remember when I got my wife’s wedding ring and the fact that they had insurance right there, of course I was like, “There’s no way that I’m not going to get insurance, and I’m glad that it’s right here and I can buy it immediately.” Now somebody else that might have been way past that might say, “Of course I don’t need the insurance,” but having that context there when you make those decisions and being able to service them and make money for yourself, as well as be able to provide a great service, it’s pretty compelling, and everyone gets something out of it.

 

Yvette Bohanan:

This is where the monetization of payments as an industry is shifting to. These new systems, fast payment systems, distributed ledger technologies. In the industry, we have always thought about making money as moving money around. And the regulations and the technology are saying, “Okay. You move the money around,” but the value, the monetization strategy and the value you’re driving through the end parties has to come from context, embedding, showing up with everything they need, the total package. And the people that can do it really, really well, those are going to be people that succeed over time.

 

Robin Gandhi:

Agreed.

 

George Peabody:

Great. Well, look Robin, thank you so much for joining us. We’re going to have to leave it there. Yvette, as always, great to do this dance with you once again.

 

Yvette Bohanan:

This was so fun.

 

Robin Gandhi:

It’s great to be home. Thank you.

 

Yvette Bohanan:

Welcome.

 

George Peabody:

It’s a long flight from Singapore, I understand.

 

Yvette Bohanan:

Yeah, don’t stay away too long. Come back soon.

 

Robin Gandhi:

I’m just here at my house in San Francisco. It’s all good.

 

George Peabody:

I understand, I understand. Thank you, though. I appreciate it. Thanks for having me.

 

Yvette Bohanan:

Thanks for being with us.

 

George Peabody:

Good to have you back.

 

Robin Gandhi:

All right. Thanks guys.

 

George Peabody:

So Yvette, what did you hear that caught your attention the most?

 

Yvette Bohanan:

Well, first of all, I just have to say I love the fact that a guest feels at home on Payments on Fire.

 

George Peabody:

So do I.

 

Yvette Bohanan:

We might be doing something right here, right George? But that’s the whole idea here, is to have this exchange of ideas with folks.

 

Yvette Bohanan:

So what did I hear? I think one of the things that was really interesting, and the reason I find it interesting, is this notion that it is a tremendous of change happening. And people outside of the industry, and sometimes, inside the industry, don’t realize that there is this tectonic shift, and it’s not that it’s happening overnight. It’s that we’re at a point of inflection where modernization work in different countries is starting to be stood up in a way that it’s getting adoption. You look at Pix in Brazil, right?

 

George Peabody:

Right.

 

Yvette Bohanan:

And how fast that’s taking off.

 

George Peabody:

So this is all about new fast payment systems.

 

Yvette Bohanan:

Right.

 

George Peabody:

New switches with programmatic access, and they are reaching levels of maturity where they’re actually being used. But I love what you’re pointing at is that indeed it’s the tech and it’s the plumbing that’s got modernized. And it’s the users who haven’t quite figured out how to take advantage of it yet.

 

Yvette Bohanan:

I think that they just don’t even know the questions to ask. So the question come up in interesting ways. How do I get rid of cheques? Is the question, not necessarily, how do I plug into the faster payment system? Like in the US, how do I plug into RTP? Probably isn’t the first question out of the treasurer’s mouth, but I went through COVID and I have to get rid of cheques. It’s crazy to be doing this anymore. That’s the first question out of their mouth.

 

Yvette Bohanan:

And so if they’re not talking with someone that can translate that question to the new technology, they’re not going to understand what’s happening, and they’re not going to understand if they can take advantage of it. And it’s still pretty new in some respects. We don’t have 100% ubiquity of these systems. The cross border nature is just starting to take off. But I think we’re entering a space where the movement is happening and it’s going to get faster and faster and faster. And then it’s going to feel like overnight, all of this stuff is available. And in reality, it’s been a buildup of 15 years to make it available.

 

George Peabody:

Classic definition of an overnight success.

 

Yvette Bohanan:

Exactly. Precisely.

 

George Peabody:

So caught my attention, couple things. One is the use of stable points really for commercial cross border movement of money. As Robin said, it’s early days, but it’s still taking place. So really points to legitimacy and utility of, well, you called it money. That was the distinction.

 

Yvette Bohanan:

It’s just money in general.

 

George Peabody:

I love that. And then the other piece, of course, is that I’ve been so interested in, and it’s not so much about Robin’s prior work, is this notion of embedded finance and how we’re going to continue to see at night. That was a really great insight that boy, for the person who’s buying their first car, they never had to deal about insurance then. So it’s a perfect idea to have it available right away. Yeah.

 

Yvette Bohanan:

It’s probably more compelling than trying to upsell you on new floor mats or something so that the carpet doesn’t get damage, which also equally important, but maybe not as compelling or valuable at the moment.

 

George Peabody:

It’s good to be able to jump in a car and know that it’s all legal.

 

Yvette Bohanan:

It’s all taken care of, right?

 

George Peabody:

Yeah. Yeah.

 

Yvette Bohanan:

And there’s probably 10 more services like that that they could be offering you in that moment that it’ll get to that point. It’s just early.

 

George Peabody:

And just to point at the economics of these offers, I financed a portion of the sale as much do the dealer a favor because they … And they begged me, “Oh, please, if you’re going to pay it off,” which is my plan, “If you’re going to pay it off, could you wait three and a half months? Because that’s when the bank that’s funding this thing completes its disbursement of funds to us, the dealership. They pay us for originating the loan completely.”

 

Yvette Bohanan:

Three and a half months later.

 

George Peabody:

Three and a half months is what they said.

 

Yvette Bohanan:

So we still have a little ways to go. Is that what you’re telling me?

 

George Peabody:

Yeah. Sometime this summer, I’ll write the cheque. Yeah.

 

Yvette Bohanan:

And I think that highlights what you were talking about. There’s different perspectives on speed and fast and who wants to move funds fast. Of course, we always want to get paid quickly, but when the payoff is happening, no matter who you are, and we were joking a little bit around our friends at the financial institutions, but the reality is any kind of a payoff, you want to hold onto the money till the last moment. And I think that’s part of what these systems allow for in a way, because they put you in control, they’re available 24/7, 365. So this is an environment where the cycle’s changing and the ability to control payments up to the minute is different. It’s a different type of world. It’s a different environment that everyone has to get used to.

 

George Peabody:

And the speed’s going to be interesting as interest rates go up. The value of holding money increases.

 

Yvette Bohanan:

Exactly.

 

George Peabody:

So releasing it the last possible moment will have a revenue impact.

 

Yvette Bohanan:

It will. For a treasurer, that’s a big deal. Working capital is a big deal for any business, like you were pointing out when you had your business. In large, large organizations, liquidity and working capital is a job for teams who are focused on this. And all of these things coming together, how fast can I get funds? How fast can I exit funds and disperse them? How can I move from one currency to another in a safe way, in a really fast way with stable coin exchange capability in there, once we start to figure out how these pieces fit together for our needs, you’re going to see there’s just a different world in the next 10 years. It’s going to be really something.

 

George Peabody:

Well, Yvette, we need to leave it there.

 

Yvette Bohanan:

Okay.

 

George Peabody:

Great talking with you, and thank you all for listening to Payments on Fire. Really appreciate your time and attention. If you’ve got ideas for the show, please send an email to paymentsonfire@glenbrook.com. Until the next time then, I hope all is well. Do good work, and we’ll see you the next time.

 

Yvette Bohanan:

Thank you.

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