Payments Dialog: The Hidden ROI of Payments Orchestration

On this episode of Payments Dialog, we speak with two members of our product team, Clay Hefner and Elijah Robertson, about some of the "hidden" returns organizations experience when deploying a Payments Orchestration platform.

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Want to learn more about how Spreedly can help you find the hidden ROI in your payments processes? Reach out to us here.

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Rough transcript of this Payments Dialog:

Peter Mollins:

Hi everybody and welcome to another edition of Payments Dialog. My name is Peter Mollins with Spreedly and today I'm joined by Clay Hefner and Elijah Robertson from Spreedly. We're going to be talking about return on investment and how you can increase your return on investment and get a great return on investment by deploying a payments orchestration platform. So, first off gentlemen, welcome. Like to give you an opportunity to make some introductions. So Elijah, would you like to kick it off?

Elijah Robertson:

Yeah. Sure. First, thanks Peter for having me on here and same to you, Clay. Yeah, so I'm Elijah Robertson. I am the senior product manager here at Spreedly. My focus here at Spreedly is really to understand the customer experience, really to dig into how we can make it as easy as possible for you to utilize the Spreedly application, so. But the introduction is about myself without rambling.

Peter Mollins:

That's great. Thanks Elijah. Clay, welcome back. Maybe you could recap your experience.

Clay Hefner:

Yeah, it's good to be back, Peter. Hi everybody. My name is Clay Hefner, senior product manager here at Spreedly. I'm aligned with our vaulting team. So what does that mean? Really, we're focused on making sure there's a centralized vault that can capture different payment methods, keep those payment methods up to date and let you transact with those payment methods where you want to. And yeah. So Peter, pass it back to you?

Peter Mollins:

Yeah, absolutely. So thanks very much to you both. And so today, like we mentioned, we're going to be talking about return on investment and how payment orchestration platform can help boost that. So it's funny when we were talking ahead of time, the three of us, there was really a whole bunch of ROI that was coming out, but there were things that were the obvious ROI is like the really big ticket items, but there was also a whole other segment that was more of the hidden ROI. So really excited to talk about some of those hidden ROI elements. But first let's talk about the classic or more traditional return on investment that you can get from payments orchestration. And maybe we can start with just an example to highlight what payments orchestration is. So I'm going to throw out an example here.

Peter Mollins:

So one of our customers is Rappi. So they're one of the largest delivery companies in Latin America. So if you want food delivered, restaurant food, grocery food, things from convenience items, even money, if you want cash delivered, Rappi can deliver it to you. It's really incredible. And Rappi has gone through an incredible surge of growth. They started in Columbia and Mexico and quickly started to expand into other countries and as they did, they wanted to make sure that they were able to accept payments quickly. And so for them a really quick return on investment was being able to add new countries, go into new markets as quickly as possible. So that kind of acceleration of their go to market was key. I don't know if you see that in some of your other dealings in the market at all Clay or Elijah, that kind of openness to enter new markets.

Clay Hefner:

Yeah. And it's interesting. Rappi is a great example. If people haven't checked out that I think there's a payment dialogue one where it kind of talks through those challenges. It's great. But to recap, as you're going into these other markets, like your existing mix and your payments ecosystem, it may need to change. You may realize that you go into a new market and perhaps the gateways and the acquires that you're working with right now, don't get the exact same results in that new region. And I think that was a challenge that Rappi saw. One of the recommendations [inaudible 00:03:41] they recommend having at least two partners in any [inaudible 00:03:45] So, Peter, I think your example was a great one.

Elijah Robertson:

And I think also to his point, I think those are great points, but someone like Rappi as well is trying to understand what does it take to actually go into new markets [inaudible 00:04:00] emerging those markets. Right. And do they have in-house the skill set to actually accomplish that in a scalable way? So I think it's very important to actually understand that what we do here at Spreedly is we have that skill set in house to allow companies like Rappi to go into new markets without actually impeding their current business plan. So they can focus on what Rappi wants to do on a daily basis. And let's Spreedly handle the other areas that they actually want to focus in, but not necessarily put in-house resources towards.

Peter Mollins:

Yeah, that's a great point, Elijah, I think that when we think about payments orchestration, one of the main things that always seems to come to mind is this idea of optimization. So you've got millions of dollars that are going through your system. And if you can optimize that by just like 2%, 3%, just the amount of extra revenue that can be driven by that is incredible. And to your point about people having the expertise, that's really another area where payments orchestration comes in, isn't it, where you're able to dynamically identify where to route transactions so that they have the highest likelihood of success.

Clay Hefner:

Yeah. So that's a really interesting point. And I think it starts to touch on actually maybe some of the hidden value that merchants can get when they work with a partner like Spreedly. So when you think about the expertise and that data, that data is something that's really hard to build over time. You can do it in-house, right. But when you partner with somebody like Spreedly that sits in the middle of the ecosystem, not only... You really start to get this partner that has all this data already pre-built. It's not just your data. I think that's what I was going to say is, it's not just your data. You're seeing the entire ecosystem. And so think about that. Like, if you want that data either one, you're going to have to build it, two, you're going to have to hire somebody that has that knowledge either directly or through a consultant.

Clay Hefner:

Or, and this is where I say this is like that hidden piece of value that you're getting through a partner like Spreedly is, it's just inherently baked in there. So now by partnering with Spreedly, not only do you get to leverage that data through tools like smart routing, but you also... People like Elijah and myself exists, we have great account managers that you can talk to. So you're almost getting this like consultant relationship to where you can start to ask these deeper questions and say like, "Hey, how can I get that revenue optimization higher? Not only because we can see your data, but we can see the data of everybody that's like you as well and almost in a consultative manner, give you some recommendations.

Elijah Robertson:

Yeah. I think expanding and digging a bit deeper there too I think specifically when you're talking about teams, right? You have these teams and there's a lot of integrations that happen across the board, right, if you're really scaling. Specifically, if you're a larger platform, right. You may have 30 plus, I'm just going to throw a number out there, but you may have 30 or more merchants that you're trying to onboard, or you're trying to integrate with multiple gateways. I'll just say it in a past life, I've experienced having to integrate with one gateway can cost you up to $10,000 per gateway. So, you start multiplying that across a number of gateway integrations, you're starting to get into the six figures very quickly and that isn't actually including any maintenance or changes that happen on the gateway side as well.

Elijah Robertson:

So internally you start to have a business on your own that it's not really a core business or a foundation of your own of your business itself. Right. This is what's Spreedly does. This is our business. So it's beneficial to utilize someone like Spreedly to help you understand exactly what you're trying to accomplish. And like Clay said, we do have Elijahs' and Clays', and Peter's right. It can help you understand what the market's actually doing so that you don't have to actually focus there and you can actually focus on your core values within your business.

Peter Mollins:

That's great. So let's just jump into that a little bit more detail though, because helping people to understand what you're talking about integrations. What does that really mean? So we've got integrations into gateways, but maybe just set some context for folks. Clay, maybe you can give a bit of context on what actually that means about those connections to multiple gateways.

Clay Hefner:

Yeah. So I'll jump back to the Rappi example, but this could apply to anybody that wants a multiple gateway strategy. So let's say inherently, like you see those benefits, right? Multiple gateway strategies offer increased revenue optimization, higher success rates, things of that nature. That's all easy to put on the paper, but what's more difficult to put on the paper is to start to look at each individual integration. So for every gateway partner you want to work with, they have some form of a programmatically of communicating with the API. And it takes time and energy for somebody to look at that API, interpret how that partner is going to work and then how that's going to fit into your system. So also, Elijah, from a previous life, when you look at it, you're like constantly bolting things on.

Clay Hefner:

And when you bolt things on something else might break on the other side. So not only do you have to look at the new thing that you're adding, it's like, how does it work with the ecosystem as a whole? So what's interesting when you work with somebody likes Spreedly, it's like we look at that holistically and make it very simple. For you as a merchant, you only have to handle one API, one strategy, and then you can route off into different directions. What I find also interesting from a hidden perspective and Elijah, I think you started to touch on this, is like the opportunity costs. So I mentioned every time you bolt something on, right, you could have been turning the wrench elsewhere. And I think Elijah, you had a really good point, which is like, is your value that you're creating for your customer payments?

Clay Hefner:

Maybe. Maybe that's part of your value proposition. But I would argue for a lot of our customers, like payments is something that they have to do to run a business. And it's a very important thing because when payments fail, your customer doesn't blame Visa or the gateway. They blame you for a bad experience. So it's a very important piece, but usually not the piece most of our customers are trying to build. They have a grander vision. So instead of turning that wrench and bolting on another gateway to get that percent off increase, what could their engineer's be doing to create that competitive, inherent value that's unique to them instead? And I think that's one of the hidden opportunity costs is like you have to consider, or the hidden return on investment, which is you have to consider that opportunity costs. What could your engineers be doing that would make you competitively better?

Elijah Robertson:

Yep. And I think too Clay, if we just kind of take a step back and just adding on to what you're saying, if we really look at where we are today in 2021, I think we could all admit that payments is becoming table stakes, right? I think anytime you come to the table, when trying to increase your customer base, a lot of times they're going to ask like, "Can you handle these payments?" And they also want to bring their own gateway, right? They don't want to make a lot of changes in their operations as of today. So how do you do that? And if you're a business like Clay's saying, you could be turning wrenches in another area. It would literally take you time to spin up a new department to learn what we know here at Spreedly to understand that.

Elijah Robertson:

So from opportunity costs, also in engineering, and then also having the ability to onboard in a efficient way as well, all of those resources are resources inside of your company that could be doing something else, right, and focusing on another area and that's what Spreedly comes in to help and just alleviate those, I guess we would call those pain points. Right. A pain point of you just don't have that expertise in house to handle that in order to scale. So that's where we come in and I like to use the words of, save the day.

Peter Mollins:

Got it. Great. So let's explore that onboarding that you mentioned, Elijah, in a little bit more detail. So, correct me if I'm wrong here, but I'm thinking about an example of a customer that we interviewed recently, Piano, where they're a platform for media companies, so a lot of newspapers, for instance. And because their customers are these media companies, those media companies already have a relationship with a gateway and when you say onboarding, tell me if I'm wrong here, that's the same idea where Piano, the Spreedly customer is trying to onboard these media companies to come onto their platform, but they've already got a gateway relationship. Is that right?

Elijah Robertson:

Yeah. That's correct. That's exactly right, Peter. So, you take someone like Piano, when you talk about onboarding, there's two pieces of onboarding, right? There's Piano, the business that they have to onboard their customers to utilize the application in their area of focus. And then you have the payments aspect of it where you need to onboard as well. So you don't want to have an onboarding process that's completely separate, right? One feels a little clunky and one feels very smooth. So you want to merge those together and you want to allow Pianos customers to bring their own gateway. You don't want to have them to say, "Hey, go and sign up with someone else in order to utilize our application." So, Hey, bring your own gateway. Let us help you understand what credentials you need to pull in to actually start taking payments on day one, right?

Elijah Robertson:

You want to make that onboarding experience as seamless as possible and not drag it out for multiple days, so. And how do we do that? And that's where Spreedly comes into play to help you and offload that, right? You don't have to worry about the onboarding aspect of it. Allow Spreedly to help you onboard 30, 40, or 50, even more customers that you're bringing onto your platform. So from a platforms perspective, their focus isn't going to be onboarding gateways, right? They don't even want to have to worry about that in terms of the application. Ideally, the way it would work is Piano onboards a customer. While they're onboarding that customer with Piano's application, they're also onboarding their gateways at the same time. So it becomes a seamless and integrated onboarding process that's not actually segregated and it doesn't feel any different than onboarding from their normal operations.

Clay Hefner:

The other thing I find about shortening that onboarding tool is it means that your sales cycle can be smaller as well. You're not going to have to factor in that gateway integration as well, which means you're really going to shorten that sales cycle, which can make or break it also for making a decision. If you have two equal options, but one you can implement faster, trust and believe the merchant's going to pick the faster option. They want those. They're going to you for results. So those results can be acquired quicker and that's the easier pick.

Peter Mollins:

Got it. So just to recap on this part, essentially a payments orchestration platform then allows platforms themselves to sell to merchants faster because they're able to show value and show that they can connect to that merchants preferred gateway. They're able to onboard them faster because now instead of it being three months or whatever, to build a connection, they were able to get them on almost instantly. And so then they're transacting faster. So for the platform, that means more money, more sooner, and just a greater, better customer experience for those new customers that they're onboarding. So it sounds like a great win and at the same time the underlying thing is this point about where the wrench is right now. It's not a fire drill every time there's a new merchant being sold. They can just focus on improving their platform in general.

Peter Mollins:

So let's move on. One of the things that sort of seems like it's undergirding all of the discussion here is this notion of flexibility. The ability of a merchant or a platform to adapt quickly and adapt what they're doing quickly, their mix, their payments mix. Is that something important that either of you see?

Elijah Robertson:

Yeah, I think absolutely. I think, I think there's multiple areas, I can say Peter. There's an area of changing in terms of compliance. You have localization in specific areas, but then you also have issues that come up, right. So if you have a gateway that has an engineering issue, how flexible can you be? Does your engineering team have to stop what they're doing in order to focus on this specific issue with one of 30 gateways you've integrated with, or does your engineering team need to stop to readjust compliance? Right. Do they need to learn what a specific area is doing from looking at localization standpoint, or do you have the ability to be flexible and maybe pass that information along to someone like Spreedly to handle that for you? I think there's a time savings cost there, in terms of passing the information along, in terms of needing something fixed, versus you actually have to identify and fixing it yourself.

Elijah Robertson:

So I think that's the real flexibility there is that the conversations become more of an information gathering versus actual a fix. So your teams aren't spending 20 or 30 hours per week addressing those issues. They may spend 30 minutes or so sending an email or submitting a support ticket in order to pass that information along.

Peter Mollins:

Great. Yeah. And flexibility sounds also from the perspective, I guess, going back to the smart rounding discussion earlier too, where flexibility and being able to choose a different payment provider, or maybe even experiment, I imagine that's interesting too, being able to experiment with a different payment service provider.

Clay Hefner:

Yeah. The experimentation piece is interesting. So there's this concept of like AB testing champion challenger. Like once again, like when you have that flexibility to work with different partners, if you have the right tooling in place, it's really easy to test this out. Once again, bring a hypothesis to your table. But if you have the hypothesis and this goes back to my earlier point. If you have that hypothesis, but it's really expensive to test it, you're not going to do it. You're going to look at where you can get the most value from turning that wrench. So once again, like you want to do all this experimentation. You can't and you shouldn't take things for granted, but when experimentation is costly, it tends to fall to the wayside of the needful. The other piece too, Peter, talking about just being nimble is I think also being opportunistic. The thing that we talked about, we often talk about gateways, gateway integrations, but there's also all these other partnerships that exist in the payments ecospace, like fraud, tooling. I've been doing a lot of like research about fraud and chargebacks.

Clay Hefner:

Sure, you could get locked into a single partner and that partner might be good. But what if a newer partner comes along with better technology? If you're integrated deeply, and this goes back to like, turning that wrench, if you're integrated deeply with one partner and then opportunistically you see another partner over here that's much better, well, it's not just bolting on that new partner. You also have to turn the wrench in the opposite direction to pull all that information out, very similar to what Elijah was talking about too, with bridging that gap. So once again, like what if you didn't have to do that? And that's where something like orchestration with a single vault comes in really handy is like, if you have this single vault that can work with multiple partners via gateways, via other tools that still need that payments method data, you don't have to make that decision about turning that wrench. You can be opportunistic. I'm using fraud tooling, but I could apply it to a lot of other different payments partners as well.

Peter Mollins:

Both, I really enjoyed the conversation and chance to walk through ROI, both hidden and visible. So great to have had this chance to talk with you. Any closing remarks, Elijah or Clay?

Elijah Robertson:

I think I have a couple. I think one of the important aspects is, like I said, flexibility. I think that's really key is having the ability to focus on your areas of foundational focus, I would say, and having the ability to not worry about having to spin up a whole new company. I think that's really, really important because at the end of the day, Spreedly is a company, right. We do a lot of things in the payment industry and we do a lot of things very well. So if you really want it to be extremely efficient in the areas of payments, we almost need a small company on your own, on the side, which is not a part of your core. And I think one of the keys right now with changes, as Clay was just talking about, if you saw a company that you were integrated with initially and wanted to change that, having that flexibility, I think the concept also of rapid prototyping, right?

Elijah Robertson:

I think that's what Spreedly allows you to do right. It allows you to not be so deeply integrated in one specific area. But you can make changes very quickly and make sure that, like you said, the wrenches are turning and turning in the areas that you want them to turn in.

Peter Mollins:

Terrific. Well, again, both. Thank you so much. This has been a great conversation. I'm sure we'll do it again real soon. So Clay, Elijah, appreciate you being on Payments Dialog.

Clay Hefner:

Thanks for having us.

Elijah Robertson:

Thanks for having us.

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