The Buy Now Pay Later (BNPL) space is probably the hottest vertical in all of fintech. Consumers like the flexibility of paying for their purchases over time and it was why some of the leading companies in the space attract such incredibly high valuations. Now, most of the BNPL players are focused on extending new credit to consumers but there is one company taking a different approach.
Our next guest on the Lend Academy Podcast is Brad Paterson, the CEO of Splitit. Calling themselves the “responsible buy now pay later option”, Splitit allows consumers to use their existing credit card and split their payments into a number of installments. They are not issuing new credit but rather allowing a consumer to use the available balance on an existing credit card as an installment payment tool.
In this podcast you will learn:
- What attracted Brad to the opportunity at Splitit.
- The origins of the company.
- How their product works.
- The geographies where they operate today.
- An explanation of the risk they are taking.
- How they on-board new merchants.
- Details of their partnership with Stripe.
- The average lift in conversions their merchants enjoy.
- How Brad views the other Buy Now Pay Later players.
- The sweet spot for purchase size using Splitit.
- Why they are primarily B-to-B but have a direct to consumer presence.
- Why they decided to go public in Australia (ASX: SPT).
- Why it was important to get a funding line from Goldman Sachs.
- What technologies Brad is paying close attention to.
- What is it about Buy Now Pay Later and Australia.
- What is on tap for Splitit this year.
This episode of the Lend Academy Podcast is sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking.
Click to Read Podcast Transcription (Full Text Version) Below
PODCAST TRANSCRIPTION SESSION NO. 287-BRAD PATERSON
Welcome to the Lend Academy Podcast, Episode No. 287, this is your host, Peter Renton, Founder of Lend Academy and Co-Founder of LendIt Fintech.
Now before we get started today, I just want to give everybody a heads up. We are rebranding the podcast, this is going to be the last episode of the Lend Academy Podcast and we’ll be re-launching the podcast as Fintech One-on-One which is really a better description of what we do here. So, I wanted to give you all a heads up that the next episode you’ll see, it will be a new…there will be graphics, there will be a new name. You should be able to get it just in your regular feed, like you always have before, but we’ll have a new name so I want to give everybody a heads up on that one.
Today’s episode is sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking. LendIt’s flagship event is happening online this year on April 27th to 29th with the possibility of an exclusive VIP in-person component. The verdict is in on LendIt’s 2020 event that was held online with many people saying it was the best virtual event they’d ever attended. LendIt is setting the bar even higher in 2021, so join the fintech community at LendIt Fintech USA where you will meet the people who matter, learn from the experts and get business done. Sign up today at lendit.com/usa
Peter Renton: Today on the show, I am delighted to welcome Brad Paterson, he is the CEO of Splitit. Now, Splitit is in the very heart Buy Now Pay Later space, but they have a different approach to the other players. They allow a consumer to use their existing credit on their credit card to make installment payments on a purchase.
We go into obviously that in some depth, exactly how it works, you know, we talk about what’s involved on the merchant side, we talk about the risks involved, how they’re able to do this technically and we talk about the fact why they’ve become a public company, the recent news that they have a $150 Million facility with Goldman Sachs. Brad gives us what he thinks…interesting technologies for the future of payments and much more. It was a fascinating episode, hope you enjoy the show.
Welcome to the podcast, Brad!
Brad Paterson: Thank you for having me, Peter, great to be here.
Peter: Great to have you. I know, you talk funny just like I do, so why don’t you give the listeners a little bit of background about how ended up coming to this country and just the highlights of your career to date because I know you’ve been at some of the biggest names in finance so tell us some highlights.
Brad: Sure, happy to. Yes, I’m from Australia, I grew up just north of Sydney on the beaches. I left actually Australia when I was 25, over 20 years ago, spent a lot of time living in Asia, out of Singapore, moving back, but during that time met my wife who is from the States. She grew up in California and about five years ago, she wanted to move home. I was lucky enough to be working with Intuit at that time. Most people know this as QuickBooks or TurboTax and they asked me to move over here to run part of the business over here.
So, combination of family and work brought me to the States five years ago, I love it here, it’s fantastic, a lot of Australians here, a lot of innovation in California. Before that, 20 plus years in financial services, fintech we call it now or in payments. Lucky enough to cut my teeth at Visa in payments and them moved across to PayPal, helped start PayPal in Australia and then across Asia Pacific, spent seven or eight years there after five or six years at Visa and then moved into Intuit where I lead the QuickBooks Business and, again, built that from scratch, you know, in Asia-Pacific starting with Australia then across Asia before moving to the States so a good…I mean, cutting my teeth at Visa was brilliant to learn the payment system and then a lot of building businesses after that.
Peter: Right, right, yeah. I mean, that’s sort of a great background for a Buy Now Pay Later CEO because you’ve hit certainly some of the innovative companies in the space, but maybe you could sort of…with that background, what made you decide to take a job at Splitit after working with some of these big names.
Brad: A couple of things, I love the product, I love it, it was different, we see ourselves as complimentary the space. It’s not a popular view, but Buy Now Pay Later product is essentially a new form of credit card, they’re financing the transactions at the point of sale. I think it’s incredibly innovative, it drives financial inclusion when done the right way and it’s expanding the people that can participate which is fantastic, it’s essentially a new credit card, though. What I love about this model is it’s the same mindset applied to a credit card because it lets you use your existing balance in a credit card to pay over time and it was different.
The benefit, as I inspected that a little and speaking to a number of merchants and consumers, the benefit was real and it reminded me of my early days at PayPal. This was like a really powerful benefit that people could articulate with the merchant. The product worked, it just needed to scale and I think given the business model running in partnership with credit cards just allowed it to scale. It was a playbook we knew well from previous payments landscapes which was really bad execution, building the foundations to allow us to grow, but executing with a really strong bet on micro plans. Those two things, strong benefits and a playbook, are new so it was like coaching the right team so that was something that excited me.
Peter: And so, did Splitit actually start in Australia or did it start in the US?
Brad: It started in Israel funded by some Israelis.
Peter: Really, interesting.
Brad: We’re complicated, we are founded in Israel, listed on the Australian Stock Exchange and headquartered out of New York, it’s a complicated relationship. Actually, installment payments or Buy Now Pay Later is ground into everything you do in Israel. You can buy even groceries for $15 in the last few weeks, you have to split that.
Brad: You can put that in three installments or $5 or I’m exaggerating, but, generally, you are asked at the point of sale, would you like to split it, would you like to pay in installments? So, it was born there, the founders had a vision, how do we take that not only to the rest of the world, but to e-commerce and it only works as a bilateral payment relationship so taking that beyond that, making it agnostic and then taking that around the world.
So, the founders worked on this for five years to build the architecture of the product, get the payments in place and listing on the Australian Stock Exchange was natural given the success of some companies down there and building a Buy Now Pay Later company. The investment market understood this product a lot better back then.
Peter: Right, right. Yeah, Australia really leads the world, it seems, in this nascent industry, but fast-growing industry. So then, can you just delve into the product, I know you described it a little briefly there, but I’d like to delve into it a little bit, exactly what it is, what’s the tech behind it and how it works.
Brad: Absolutely. In the simplest form, we’re allowing people to pay over time in installments using the balance they have available in their credit card. So, let’s imagine you’re going to buy a bicycle for $800, you can purchase that bicycle now for $800 and you have to pay that off in 30 days time before you’re charged interest on your credit card to pay if you have the balance of $800.
Or, what we allow you to do is we say, let’s say you want to pay that over time, ten installments of $80, we’ll place a hold of $800 on your card so you don’t over extend yourself and builds back to the card $80 every month. So, you only have to repay the $80 before you pay interest or fees, we’re not extending credit to you, there’s a financial institution that’s behind that credit card which decides which credit you can have. We are placing a hold and we refresh that hold every month. So, it’s allowing people to purchase what they need, what they want it now, but without over extending themselves so there’s new debt or no new credit at the point of sale.
Peter: Right. But, they do have to have that space on their card to be able to put a hold on, otherwise, you decline them, right?
Brad: Well, we don’t decline them, the issuing bank declines them, but, yes and I think that’s what makes us very different. We’re not extending credit to people, we’re actually checking to make sure you have the credit and allowing you to use our technology to split that over time.
Peter: It’s interesting because all the other Buy Now Pay Later players, you know, have a different approach, it seems, they’re not using existing credit cards. So then, where are you operating, tell me what geographies you’re actually operating in today.
Brad: We are headquartered out of New York, the US is our headquarters, it’s where we’re focused on winning and where most of our team are based. Our technology is out of Israel and then we have offices in Australia, in the UK as well.
Peter: As far as the market, are you going….is it just primarily in the US right now?
Brad: Wherever a Visa or Mastercard is accepted or wherever a Visa or Mastercard is held, you can use Splitit. So, we have merchants in over 30 countries, we have shoppers in over 100 countries.
Pete: Visa and Mastercard are in every country in the world, right.
Brad: Exactly. That’s what makes us different is wherever there’s a credit card used or accepted, we’re relevant. I think we’re focused in terms of where we put most of our time and effort is into North America and the UK and Australia, but we can be used and we do serve people all around the world.
Peter: So, how does it work then if…..so you’re saying you can use it anywhere Visa or Mastercard are used, obviously, you have merchants. I’ve seen some of the merchants where it’s a sleek, it’s a nice interface where you can just…….. it gives you the option to pay in full or pay with Splitit, I imagine…what happens if you come to a merchant that …..they’re trying to buy something where the merchant isn’t with Splitit, how does that work?
Brad: The merchant needs to accept Splitit so what we’re doing is we’re building out again an acceptance business and then educating consumers of what we do so they choose us when they see the brand and they understand that. So, we’re building out an acceptance business, they need to accept that, there’s a number of different ways that can happen.
Payment gateways are working with us to distribute our product and install that into merchants, we’re selling directly into merchants, we have a lot of demand coming in as well. So, really what our job is to build that acceptance and educate consumers to understand that so when they see our brand, they understand what that does because we’re so different.
Peter: Right. So, do you do any underwriting at that time because, obviously, you’re not taking credit risk because the amount is on the card. I imagine, the merchant wants their money so you’re fronting the money, I take it, and then there is some risk obviously that that person is going to close down their credit card or just not pay. What is the risk here you’re actually taking?
Brad: It’s minimal and it’s one of the things that makes our model unique. We’re a technology layer, we’re not essentially issuing credit or collecting the credit, we’re a technology layer that it allows us to happen on an existing card system. What does that mean? So, yes, you’re right, retail or merchant businesses want cash now, not all of them though, We have two models, do you have the cash now or do you want it over time, there’s a fee if you want it over time versus wanting that now, we enable both models, we underwrite the merchants as they come in to make sure, just standard underwriting in terms of credit worthiness because we’re extending you the money now, making sure the products are delivered on time, etc., relatively light touch though given our model.
On consumers, we don’t underwrite at all because we are not actually issuing credit to consumers. The risk, we guarantee the funds to the retailer and to the merchant. So, if you are a retailer, you want to receive your funds, we guarantee you’ll get that over time, we’ll take care of collecting that from the consumer. The way we do that is we almost guarantee that money through the hold on the card. If the funds are available, we know that’s there and every month we’ll go and get it back to the card for a monthly installment.
Peter: So, what happens if the consumer tries to cancel their credit card during that payment period?
Brad: It’s no different to any pending authorization that you have on your card today, I mean, that it’s held there and that’s been approved, that’s something that you owe, but it’s not billed to the card immediately.
Peter: Right, okay, okay. So, you are fronting the money, but, I imagine…..so your losses, I mean, can you tell me like are the losses very close to zero?
Brad: Yeah. It’s very close to zero, we say it’s negligible, we don’t report it because….we actually didn’t report it because there is really nothing there. We now say it’s negligible because there are sometimes those authorizations fall over or different nuance things that happen that are very complicated and nuanced payment systems, but it’s close to zero, it’s in the single digit most of the time.
Peter: Right, right. So then, your big challenge is to bring in, you know, thousands, tens of thousands, hundreds of thousands of merchants, I guess.
Peter: Explain sort of the on-boarding process that you go through with the merchants.
Brad: Essentially, we’re connecting from merchants’ payment gateway. Where the merchant is sending us the transaction, we’re putting that trust system which allows that to be turned into an installment transaction versus a binary one and send that back to the gateway into the payment system. So, we sit between the merchant and the payment gateway, we’re integrated and over supported by over 90 payment gateways around the world, but every merchant that we integrate with, they need to set up a new merchant ID with that gateway account, etc. etc. that integrate our APIs.
So, we are improving the on-boarding process now through a partnership with Stripe which means this can be done now in hours. Before, it was taking merchants weeks or months to work with the other payment gateways to get the startup. So, there are a number of payment gateways that will do this in hours or days, there are others where it can take weeks or months because there are different systems that people operate in different ways.
We’re now bringing this down to be in a much quicker space, we have a lot of work to do, we’re not satisfied with how long it takes to on-board on to Splitit, we’re not satisfied with how simple it is. This is one of our big focuses which we continue to innovate to bring that down to ……I can be accepting installment payments in minutes.
Peter: Right. I’d love to see what kind of difference….obviously, you’re working with a number of merchants already, what’s the difference when someone starts adding this. I’m sure you do have stats on what the lift is for their revenue, do you have some sort of averages there you could share?
Brad: We do have a number of case studies on our website. It’s consistently suggesting that conversion rights with Splitit for retailers is nearly double. Some people will say it’s triple, some people will say maybe it’s one and a half, but on average, it’s about double the conversion rate. The reason is we’re allowing you to use the credit you have, we’re allowing you to one….. there’s only one step of friction in the checkout process which is choose the number of installments, that’s it.
There’s no application, there’s no entering personal details, there’s no fear of impacting the credit score because I already have the credit so it’s incredibly simple. You X, the approval rates are over 80%, the same as the credit card if you have the balances approved. So, we’re actually helping retailers sell more by converting existing browsers into buyers, that’s leading to conversion rates of 2 to 3X improvement over the standard. They’re translating that into 20 to 30 slight increase in sales, either though a much higher average order value or a much higher conversion rate.
Peter: And are you seeing…is this happening…are most people buying through a mobile or is it a desktop browser, I mean, what’s the sort of usage on the consumer side?
Brad: It’s predominantly mobile, as you would expect, a lot more browsing on mobile to maybe completion, but pandemic changed this, we actually saw sort of shift back to the desktop.
Brad: We actually spend a lot of time sitting in front of a desktop at home, maybe not always, and least in front of a laptop if not an iMac or something similar. But, I expect that would shift back to mobile in time, I think there will be an even bigger shift back to mobile as we start to see the convergence of contactless and cloud-based checkout in the future. But, at the moment, it’s still predominantly mobile, but it shifted back to desktop in the last twelve months.
Peter: Right, right, okay. When I was doing a little bit of research for this, I was browsing a number of different websites. I was surprised when I came across one that offered yours and one or the other Buy Now Pay Later type offerings which…..
Peter:….so, do you see yourself as complimentary or how do you view the other Buy Now Pay Later players?
Brad: We do, we absolutely are complimentary. We’re often asked, how do you compete against some other names in the industry? We don’t, we’re complimentary. We don’t offer exclusive terms in our contract because we don’t believe that we’re competing with those companies. And the reason is, our customers told us this, there are consumers and shoppers with a credit card that don’t want to go into more debt, they want to use that existing credit they have more effectively and there are people that need new credit or they need to confine that transaction for a neighbor or what they have at that moment in time. Those are complimentary needs, they are not mutually exclusive.
So, we position ourselves as complimentary, we can plan about our partners carefully, Purple Mattresses, great product, great brand. They accept Spliit and Defer Buy Now Pay Later type transactions, they position us prudently, next to each other, side by side to see the difference between the two systems incredibly well as well which is through your credit card application. If If you have the balance sheet, you can do it today and the other is financing, apply for financing, pay it over time and the need to start with no interest rate which is new credit to you.
Some of them said publicly that both of products are improving conversion rates and we’re doing it in different ways, but both are needed because these are two different types of consumers that they’re serving and two different types of needs. Serving just one is forcing people that want to pay over time into accepting or having to get new debt or if you’re only accepting Splitit, you’re only serving people that have the credit available. So, we see them both as complimentary needed at the checkout.
Peter: Right, right, interesting. So then, is it primarily big ticket items, I mean, are these $500 – $1,000 items because you don’t need to split a $20 item, I imagine, where are you targeting your offering?
Brad: Great question. Wherever a credit card that can be accepted we are used. We see transactions from $60 up to $60,000.
Brad: The benefit of our model is if you have big available balance in your credit card, you can split it. So, I’ve seen jewelry purchased for $50,000/$60,000 into three installments, these are people that don’t need to do that, but are choosing to do that. We’ve seen $60 shoes being split into six installments at $10, these people want to or need to do that. Now, where to focus, I’ll tell you one of the first things we did when I joined was look for product market fit and the product market fit was really any transaction over $300, we started to add a lot more value.
We’re gravitating close to higher than that, we will serve anywhere, but we have the most value over $300 up to $1,000 and a lot of our peer companies are complimentary. They start to max out at $1,000 in terms of the credit they will issue you for that transaction so that’s where it’s complimentary, but we drive a lot more benefit $300 and above.
Peter: It’s interesting because obviously the whole, you know, credit card game now, there are so many rewards that people are focused on and you’re not giving up your rewards even though you might not want to pay that off, you can still do ….really, I can see how this is…..so you’re paying the exact same amount, right, whether you put it over six….like you get to choose how many installments or how does it work there?
Brad: You do, there’s a different cost of funds, there are no different fees to the retailer, depending on how many installments they offer, so it’s up to the retailer. They can offer up to 12 and an exception of up to 24 or 36 months, there’s a different cost associated, it’s up to the retailer. So, that would go to a business case that says, I only need to offer three and I’m driving conversion or now I actually need to offer 12 installments to improve conversion which comes at this cost.
Most people would do this, we’ll run them a pretty simple ROI and so the improvement in conversion outweighs the higher cost of 12 installments versus three, but every individual business is different, it goes to their margins, what they need to achieve in terms of conversion improvements to justify that cost.
Peter: Right, right. So, you’re really more of a B2B player, right, I mean, obviously….do you have a consumer facing offering at all. I mean, I don’t think I saw an app, how do you interface with consumers as opposed to businesses?
Brad: Yeah, you’re right. We don’t have an app yet, we are predominantly B2B. What is consumer facing is our brand. Consumers need to understand who we are and what we do and payments is very much a trust business. If I trust you to process my payments and my money, you need to overcome that hurdle, otherwise, you won’t be successful so we’ve made great leaps and strides in that space in the last 12 months and part of us…. while we’re doing that it’s putting more of our efforts into educating consumers, building trust and helping them to be comfortable, but this is a way for you to shop with confidence and in a responsible way.
So, we’ll continue to do that, we will not be issuing credit to consumers, that’s not what we’re here for, that’s not in our founding principles, that’s not something that we will invest in to do that directly. But, we will invest more and more in terms of giving consumers greater utility and flexibility as to how they use Splitit, whether it’s in mobile or in other ways as to how they do that. You’re right, we are B2B, we need to be accepted; if we’re not accepted, we’re not relevant, it’s not issuing credit and pushing you to place this, to use this elsewhere, that’s a different model, again, which makes us different to others in the industry.
Peter: Yes. I imagine, people might be up to check out pay, huh, that’s cool, like six installments, 12 installments, I’ve never heard of this company so they probably will browse or type in Splitit and see what happens. I mean, you probably have that a lot where….you know, it seems reasonable, let me give it a try. The thing is, once someone’s done it once…I mean, do you allow…I imagine, consumers will then say, I want to do this at other places that I spend money on a lot. Do you have like a consumer evangelist to sort of help drive the B2B?
Brad: We are, we can say yes, but we’re building that out now. So, we’re building out a marketing team, anyone in marketing that’s interested in joining a great innovative company, give me a yell, but we’re going to get that team now, we’re doing a little bit of that now and more so this year. This is the new pillar in our strategy to really invest in 2021 and beyond.
Peter: Right, right, okay.
Brad: Maybe you’re right, the number one thing I hear, I used to hear this at PayPal, believe it or not back in 2005, who is PayPal? I mean, you couldn’t pass the barbecue test let alone have consumers to have confidence in purchasing unless they used you on e-Bay, fast forward 15 years, you can’t imagine that being the case, we’re in a similar journey. At Splitit, what do you do? We do a little research and we build confidence, but we are hearing it more and more often. We have an NPS greater than 65 and the people that know what we do and have used us love it. The question is, why can’t I do this everywhere?
Peter: It just makes a lot of sense that this should be available, I mean, what is the competitive moat you’re building, is it because…I’m just curious because it’s a simple idea, it’s amazing the idea wasn’t around ten years ago, but it wasn’t. So, what’s the competitive moat you’re building?
Brad: First and foremost which we don’t rely on, it is credit where we started, is our patents. We have patents that run through to 2032. It’s the IP that the founders protected early and makes it a scalable model that is low risk. Secondly, is tech, you need to connect to all these different payment gateways or build your own payment gateway and that’s not easy so you need to build that and have that.
We’ve spent five years doing this, seven years doing this. And then it’s acceptance and understanding, everything I just said about trust and acceptance, that takes time to boot out as well. So, we are on that last mile of this now or going at that moat and this is really where we’re investing and accelerating growth in terms of that acceptance and understanding.
Peter: Right. So, I’m curious about……you are a public company listed on the Australian Stock Exchange and I will share the symbol for everyone if they can go in the show notes, why did you decide to go public, one and why did you decide to go public in Australia?
Brad: I’ll tell you about the story that I heard and try to make sense and then we’ll talk about Australia. Reason to go public was we’re always looking to raise money to help grow the business and you get them in the private markets or the public markets and I think given the work of that some of peer companies formed, especially Afterpay building out a lot of products in Australia, it helps the investment market there understand the Buy Now Pay Later space well in advance of other parts of the world. So, it was just seen that the market understood that, investors understood that were more willing to invest in a company in this space. The fact that we were doing it differently, now we have to educate why we were different to other people. That’s why we went public, that comes with a number of opportunities and a number of challenges in doing so.
Why Australia? We can talk a bit more about why Buy Now Pay Later in Australia, but the ASX is where, I think, it was forged that industry and the innovation out of Australia in the space is second to none.
Peter: Yeah, it’s really interesting. You know, like you’ve got, Afterpay’s worth more than US$30 Billion, you’ve got Affirm that’s close to that, you’ve got Klarna, I just read this morning that it’s going to raise money at a round close to $30 BIllion so you’ve got these monster evaluations……is that helping Splitit or because you’re obviously…..you say you’re complimentary, but you still do it at the point of sale so it feels like the Buy Now Pay Later space, it’s the hottest space in all of fintech. So, is it helping you guys, do you think?
Brad: It doesn’t hurt, I think it doesn’t hurt at all, I think we need to be clear. We have some work to do so everybody understands that we’re a complimentary option in the space, number one. So, both known and understood and we continue to do that for the investment community here in the States, Australia and abroad. Number one, yeah, it definitely helps. I think longer term, will all of those parties…..there’s a battleground for consumer financing to issue consumers new credit.
Brad: We are not in that battleground, we’re not there. There is battleground there and I think people are backing different horses as to who’s going to win that race. We feel that we’re running a race alongside them that creates great momentum for us to capitalize on, but we’re not going to sit on our laurels and just wait for that to happen. We’re going to grow with a different model.
Peter: Speaking of which, I was just reading recently you signed a $150 Million facility with Goldman Sachs, I presume that’s to help fund the business as far as paying off merchants, that sort of thing, but maybe explain what that money is actually used for and was it important to get like a blue chip name like Goldman Sachs. I don’t think there’s any bigger name in finance than Goldman Sachs. Was that important to get them on board?
Brad: Yeah. So, the $150 Million facility is solely used for advancing funds to their merchants so they can have the cash now and we’ll collect it over time. So, the more we grow, the more that we need to do. That turns into essentially $600 Million plus per annum because the book turns over about four times a year and that’s a three-year agreement so you’re simply looking at $1.82 Billion worth of funds we can advance to merchants over three years.
That’s a very important stage about growth, as we’re growing we want to make sure that’s there so that’s not slowing us down. Earlier in the year, we had exploded on the growth and we didn’t have that there. We fixed that with bridge facilities, now we’ve really moved to partner with a blue chip company such as Goldman Sachs that can provide that.
It was important for a couple of reasons, one, I think that the partnership with the company like Goldman enables us to grow in many different levels beyond the credit facility not just there, I think they’re bringing a level of expertise into the space which will help us become enterprise-grade versus where we’re at today and evolve that quickly over time.
And, finally, they’re investing heavily in the space, I’m saying that they will provide and will fund a number of facilities, they’re investing in the space and I think that’s a vote of confidence in our business that they see us fund the suppliers in the space that will be here for sometime and will grow and they can benefit from as well.
Peter: Right, right, okay. We’re almost out of time, but I want to get to a couple of more things before I let you go. I’m interested in getting your thoughts…I mean, you’ve been around the payment space for a long time and we’ve seen this huge growth of Buy Now Pay Later, you’ve seen the pandemic has caused a switch to debit. Credit cards are down, you know, the total transactions down for the first time in a long time. What technologies are you paying close attention to? What do you think is going to, you know, rule the future of payments?
Brad: There’s two different views. One is not new and one is quite hot, one that’s certain is mobile, we’re really looking at how will…the way you use your device to pay, how will that change and I think what we’re seeing is just going to be a convergence dramatically now (as shops reopen people will re-enter the economy outside of e-commerce, cloud-based checkout, cloud-based payments driven by your mobile and consumers initiating those transactions more than a retailer initiating those I think has changed forever, we’re going to see a lot of evolution there.
That’s exciting for us because that allows us to become an e-commerce brand in-store quickly and much more easily without investing in infrastructure to do so. So, we’re watching that closely, we’re doing a number of tests with different partners in the space.
The other area on the complete other end of the scale is blockchain, how do we use blockchain technology, not necessarily crypto, blockchain technology to help us expand forms of payment. We are operating on credit cards, but can you use that to operate with debit cards, with other local payment options around the world, how can you scale crypto quickly globally with blockchain technology and what you couldn’t by using traditional payment means.
So, does that mean that we’re looking at the early stages and we’re looking at very closely and then, of course, we’re looking at machine learning as to how you really turn your data into an asset that you can use to build better product for your customers.
Peter: Yeah, interesting, interesting. So, what is it about Australia and Buy Now Pay Later? Is it just because Afterpay started there or is there something else going on in Australia?
Brad: Nick and Anthony have built a brilliant product but innovation in Australia, in fintech has been around…it predates me and I have been around for a long time, but…you would know this, Peter, but some of your listeners may not. There’s a great point of sale debit network in Australia called EFTPOS and most transactions in Australia will happen on that network. It’s a PIN-based debit transaction not a point of sale and then they were one of the first countries to move to chip and then to contactless. I think it’s 20 million people versus 300, there’s four banks versus 400 and it’s a relatively small ecosystem, but it’s vibrant.
The economy is vibrant and it promotes innovation where you have a vibrant economy, you have small number of people or a small number of players, they can do that. It makes it all so hard, it makes it hard because a small number of players can sometimes control it, but there is an Australian mentality of I think to battle against the odds and to find a way to challenge the establishment. I think that serves as an innovation so I think all those things come together in the fintech space which drive a lot of innovation. I think there’s a lot of great company stories out of Australia, but I think it all stems back to some of those points.
Peter: Right, right, fair enough. So, last question then, what’s on tap for Splitit this year, what are you focusing on right now?
Brad: Serving our customers, we’re really focused on acceptance, more people accepting the product, I think really leaning into more product innovation now, leaning into our consumers into other areas which we will release later in the year or as time goes on. I think being clear that there’s another way to pay, I think we have a lot of work to educate, we’re not well known and we’re starting to hit the inflection point where that is changing.
People are increasingly knowing us and I think the repeat use and the NPS is showing that there’s……we need to accepted in more places because the demand is there. So, our job is not just to accelerate that, but to really educate the industry, whether it’s retailers or consumers, there’s another way, you don’t just need to go into new credit to make these purchases over time.
Peter: Okay, we’ll have to leave it there, Brad, it’s really fascinating. It’s a great product, you certainly got a huge opportunity ahead of you, so best of luck.
Brad: Thanks for having us on, Peter.
Peter: No worries, see you.
Peter: It’s amazing, this is a pretty simple idea, amazing it hasn’t been done before, but Splitit has taken the reins of this and really the timing is great. Brad and I were talking after we stopped recording and we were saying, oftentimes, it’s a timing issue. Someone might have had this idea 20 years ago, but it would have been really hard to implement.
Today, we have the technology, we have the ease of use of checkout, people are used to now having multiple options to checkout. You know, there’s Amazon Pay, there’re PayPal, there’s other Buy Now Pay Later so they’re more open I think to doing something like this. This is an idea that is going to have traction, whether Splitit wins this race, someone is going to be able to dominate the sort of paying installments with your credit card space. Splitit, obviously, have a head start and have a great shot at really becoming the default here.
Anyway on that note, I will sign off. I very much appreciate you listening and I’ll catch you next time. Bye.
Today’s episode was sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking. LendIt’s flagship event is happening online this year on April 27th to 29th with the possibility of an exclusive VIP in-person component. The verdict is in on LendIt’s 2020 event that was held online with many people saying it was the best virtual event they’d ever attended. LendIt is setting the bar even higher in 2021, so join the fintech community at LendIt Fintech USA where you will meet the people who matter, learn from the experts and get business done. Sign up today at lendit.com/usa.
KeyBank & Laurel Road Unveils Digital Bank Specifically for Doctors
Laurel Road, a brand of KeyBank, announced earlier this week the launch of Laurel Road for Doctors, a digital bank specifically for physicians and dentists. According to Laurel, the goal of the new digital bank is to help ease the burden for doctors of paying down student debt, finding more balance between work and life, and planning for the future—many of whom have worked tirelessly through the COVID-19 pandemic.
“With Laurel Road for Doctors, Laurel Road and KeyBank expand on its existing suite of tailored digital banking and lending products and extensive experience working directly with doctors to create a platform that meets the distinct challenges of this community.”
. The online experience, from originations to servicing tools, will include new offerings such as:
- Student Loan Cashback Credit Card: The only credit card that offers 2% cashback to pay down student loans with most loan servicers.
- Student Loan Refi & Linked Savings: Link new savings accounts when refinancing student loans to build savings while obtaining an even lower interest rate.
- High Yield Savings Account: Qualified borrowers can open an account and earn 10x the national average Annual Percentage Yield (APY), with $0 to open, no minimum balance, and no monthly maintenance fees to fast-track savings goals.
- Financial Insights: Personalized data and guidance that allows doctors to compare against those in similar specialties on salary, debt and more, utilize educational content to build financial literacy, and access custom insights for budgeting.
- Laurel Road Perks!: Exclusive offers, discounts and benefits through a newly established and growing partner network of premium brand partners such as P.volve, Sakara, Rent the Runway, Brooklinen, KidPass, Talkspace and The White Coat Investor.
- Premium Care Team: Financial healthcare support specialists to provide personalized care seven days a week.
While speaking about the launch, Chris Gorman, Chairman and CEO of KeyCorp, added:
“We acquired Laurel Road in 2019 with the intention of scaling this digital born business. Through this new digital bank offering we are able to provide a secure online experience and customized banking solutions to meet the special needs of physicians and dentists.”
Celsius Network Update: Offers Yield on Gold-Backed wDGLD Token
Celsius Network, a cryptocurrency lending and borrowing platform, announced on Thursday it will add support for CoinShares wDGLD token. According to Celsius, customers will be able to hold wDGLD tokens in their Celsius wallets to earn weekly compounding yield or use their coins as collateral to get cash loans against their crypto.
“CoinShares and Blockchain.com launched the wDGLD token in November 2020 as a solution to bring digital gold onto the Ethereum network and extend its usability within the digital asset ecosystem. wDGLD is pegged 1:1 with DGLD, a gold-backed token built on the Bitcoin blockchain and is currently available in the Blockchain.com wallet, home to over 69 million created wallets.”
Alex Mashinsky, CEO of Celsius, spoke about the support by stating:
“It’s a win-win-win when we’re able to form mutually beneficial partnerships that also generate more value for our customers. At a time when dollars and other inflationary currencies are losing value at an exponential rate, adding wDGLD provides our users with yet another option to diversify their assets in a way that acts in their best interest.”
Founded in 2017, Celsius addresses the financial needs of today’s consumers worldwide through a democratized interest income and lending platform accessible through a mobile app.
“Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions.”
Celsius recently announced it now holds more than $5.3 billion worth of cryptocurrency assets.
A Day in the Life of Madysson Bouchard, Indie Film Producer and Co-Founder of Sunday Breakfast Studio
Whether you’re raising funds for a creative project or a new business idea, running your own crowdfunding campaign is no easy feat. It takes a healthy dose of passion, discipline, and commitment to bring your ideas and concepts to life, and get your backer community excited about them. Ever wondered what a day in the life of a creative entrepreneur on Indiegogo is like? We’re here to give you an exclusive glimpse into 24 hours of their day.
Juggling creative projects, a film production company, and a crowdfunding campaign can be challenging, so we’re always inspired when we encounter a woman can do it all. Meet Montreal-based indie film producer and graphic designer Madysson Bouchard who co-founded Sunday Breakfast Studio.
Together with indie filmmaker Gregory Thomas David, she is running a campaign to fund Portraits of A Family — a film that adapts the true story of a Filipino-Canadian family, spanning over two decades, as they struggle to put the pieces back together after divorce and drug addiction has torn them apart:
“Portraits of a Family is the story of a family of four, including two first generation Filipino-Canadian boys, and the hardships they face within the span of two decades. We see this family at their lowest of lows, struggling through the complexities of divorce and the pain and frustration of drug addiction, but through it all they find a way, as individuals and as a unit, to remain strong, intact and full of love. Although this is a family drama that may sound familiar, and that many people can probably relate to, we are driven to create this film in order to show an authentic Filipino-Canadian experience that the film industry is sorely lacking.”
Your contribution will allow their production to start filming, and get this story out to screens everywhere, in a world where AAPI voices and images are missing some real representation.
Read on to see how Madysson spends 24 hours in her day, working as a creative professional in Montreal. Then scroll down for a brief Q&A to get to know her better, learn more about Portraits of A Family, and get inspired!
6 A.M. As a mom to a two-year-old boy, this is usually where my day begins. I’d love to say that I get up early to do yoga and get a fresh start to my day, but it’s more along the lines of watching cartoons while sharing cereal with my son. Although I could use some extra sleep on most days, this is the hour in my day where I get to spend time alone with him and get a good fix of his tiny cuddles before the day fully begins.
7 A.M. The action begins. It’s time for our little family to get dressed, have breakfast, get ready for the day and leave the house for daycare. As simple as it looks, this takes a full hour for us, because best believe that a pregnant lady and a toddler are not the fastest when it comes to getting ready!
8 A.M. Once I drop off my son at daycare, I switch hats to become both a graphic designer and a producer. Making an independent film is a lot of work, but so is taking care of a family. So, at the same time as being a full-time producer for Portraits of a Family, I also have a full-time job as a graphic designer, which helps us stay afloat and develop my creativity.
9 A.M. The time in my workday where no one is yet active and I get to catch up with the many emails I’ve received since the last time I checked. It’s usually the same: new design projects that need to be finished within the week, or questions from actors, volunteers and sponsors. Answering all of these takes no less than an hour, and it helps set the tone for the day, too.
10 A.M. It’s time to get down to business. As opposed to a producer on a regular production, I have to wear many hats to be able to get things done. That means PR, graphic design, set design, castings, finances, and many, many more! Our team is made of the director, who is also my fiancé, and a handful of volunteers who give a few days a week to the project. When something needs to be done, I usually take care of it! This is the time of the day where I map out the needs of the production for that day and decide what to do and what to delegate.
11 A.M. By that time, I usually have most of our PR needs answered for the day. Emails have been answered and sent, our Inbox is clear, and our volunteers have been reached to know what to work on that day. On busy days, the director and I spend some time watching new auditions and writing notes for potential call-backs. When I have more time, I focus on creating visuals to update the website, our social media platforms, or our Indiegogo campaign.
12 P.M. Did I mention an Indiegogo campaign? That’s right! All of us spend a lot of time sending the campaign to friends and family, as well as posting it on different groups and to communities who can offer support. We also have a newsletter thanking personally all donors which I send from the Sunday Breakfast Studio email at this point of the day, every day.
1 P.M. Time for a well-deserved break. Although working from home allows us to spend time together, my fiancé and I like to put everything aside during lunch time, including work-talk. We fix ourselves a quick meal, share a few thoughts and stories, and go right back to work.
2 P.M. After lunch, I usually have a few meetings scheduled. Some people like to get the day started with meetings, but I’d rather have time to prepare first. As a graphic designer working remotely, zoom meetings are the best way for me to fully understand the client’s needs and get a complete brief. And as a do-it-all producer, I often have to answer questions regarding auditions, funding, pre-production and logistics.
3 P.M. Only one hour left before we have to go get our son. It’s a short 15 minutes from our house, but once he’s home, we put our computers, and the workload that comes with it, aside. So, it’s crunch time to send the last few emails before I go MIA for a few hours. I send draft projects for approval, requests for the next day, update our Excel tables and make sure all the data, information and visuals made during the day are available to everyone on our drive.
4 P.M. Picking up my son has to be one of my favourite moments in a day. Even at his young age, he has loads to tell us; including what he did with his friends, what games he played and where he went. It’s a good reminder that he has his own world, too, filled with just as many adventures as us. We usually play some more once we get home and I get things ready for dinner.
5 P.M. Now that I’m pregnant again, dinner can be tricky. It happens that I can’t stand being in the kitchen, and that’s where my fiancé takes over. The rest of the time, though, I make dinner and the boys (yes, even my son) get involved by mixing, cutting or washing the dishes. Now, just like the morning, this is kind of a hectic time in our house because we also try to fit in a bath and a small story time for our son.
6 P.M. Usually means we’re really close to my son’s bedtime. We tidy up the last few things he might’ve left around, make sure he has everything he needs, and then up in bed. For us this also means we have time to wind down and rest a little bit until he’s 100% asleep.
7 P.M. You’d think that my workday would be done by the time I first put away my laptop, right? Well, it’s not the case! The dishes are down, the little one’s asleep, and we go right back to work. As I said, being a producer is a full-time job, and with another full-time job keeping me busy during the day, I have to find time to work on the film, and that happens to be at night. As exhausting as it sounds, there’s nothing better than working on your own projects.
8 P.M. At night, most of my focus goes towards visuals and logistics. Since everyone is pretty much off the grid, it’s the perfect time to work on the social media calendar, on our budget sheet, our prop list or design the costumes. In this production, I act as pretty much every department’s head, and make sure we’re respecting our tight schedule and budget.
9 P.M. And still going! With the TV on in the background, I write a list of the things that need to be done the next day. It can be hard to balance two full-time jobs as well as being a mom, and keeping a house clean, but this is where my fiancé comes in. As the director of Portraits of a Family, he wears just as many hats as I do and shares the full load.
10 P.M. On most days, this marks the end of our workday. We work until we have to, but seeing how early our son wakes up, it’s safe to say that bedtime shouldn’t be too late. I usually take a few minutes to relax and leave the day behind before going to bed.
11 P.M. And it’s lights out! Although this schedule is pretty packed and often asks us to juggle many things at once, it’s one that I chose and that I’m happy to have. I wouldn’t change one hour of my day, nor would I change any of the many hats I put on.
Now that you’ve gotten a glimpse of what their day is like, get more inspiration in our exclusive Q&A with Madysson below!
INDIEGOGO: How and why did you become a film producer? Was it something you always intended for yourself?
MADYSSON: I studied in fashion marketing and business finances for 3 years. I had many jobs in the fashion industry, including visual merchandising, designer, stylist, etc. When I met Gregory and learnt about his passion and ambitions when it comes to making films, I wanted nothing more than to support him. Throughout the process of helping here and there, I realized that producing a film regroups a lot of the things I am good at and love doing. It was never in my plans, but it all makes sense now.
INDIEGOGO: What makes your Indiegogo film project unique?
MADYSSON: Portraits of a Family is one of the rare Filipino-Canadian stories out there. There are very little films being made in Canada that are made by and showcasing Filipinos and their culture. And because of that, it makes it an important project to a lot of people as it would be a chance for the Filipino community to hold leading roles amongst the cast and the crew. This is definitely something to be a part of.
INDIEGOGO: What’s your biggest piece of advice for women who want to make movies?
MADYSSON: There’s never too much planning. They say you can never make a movie in a cheap, fast and good way. You always have to choose two; it’s either cheap and good, but a slow process, or expensive but you get to do it faster. You will know which one is right for you. We knew that money would be our biggest challenge, and so we’ve scheduled every month for over a year, from development until production and beyond. Make sure you know the schedule by heart, because it’s easy to forget deadlines or important steps when there is so much to do.
INDIEGOGO: What are the film influences behind your movie?
MADYSSON: A lot of the inspiration for Portraits of a Family comes from these films: The Squid and the Whale, Moonlight, After the Storm, A Separation, and Boyhood. From the look to the thematic feel of these five movies, we can find similarities in what we’re trying to create. None of them are Filipino movies, hence why our film is an important one to make.
INDIEGOGO: What tools would you recommend to anyone starting their own business, crowdfunding campaign or project?
MADYSSON: I wouldn’t have been able to learn everything that I know without the book Producer to Producer by Maureen A. Ryan. She’s a genius when it comes to explaining everything a producer has to do in the most efficient way. Every step is described along with the resources to get further help. I would also say to always keep two copies of everything. If you register your IP for a film, make sure to also scan the official paper and keep it on a Drive. Same goes for schedules, contracts, and so on. Anything can happen and some papers are too valuable to lose, such as permits and official documents. Our team shares everything through the same Drive, and communicates using apps like Teams, or Slack.
INDIEGOGO: What’s your favorite Indiegogo campaign?
MADYSSON: I really liked the East West Eats Cookbook campaign by Ellen Lee. It featured many chefs from The Bay Area and helped a student project at the same time, plus the recipes looked great. We have a Filipino recipe book ourselves as a perk and we can never have too many!
To support Madysson and Gregory in making Portraits of A Family happen, check out their Indiegogo campaign page or follow them on Instagram, Facebook, or Twitter. To learn more about her other creative projects, you can follow her on Instagram.
Pine Labs Reports that CIMB Bank, HSBC Bank, Others are Using its Buy Now Pay Later Solution, Now Also Available in Malaysia
Pine Labs, an Asian merchant commerce solution provider that’s backed by payments giant Mastercard, has introduced a Buy Now, Pay Later (BNPL) solution in Malaysia.
Pine Labs aims to offer a technology-focused offline payments platform where several different credit card issuers can use a common terminal to provide BNPL offers to clients.
AFFIN BANK, AmBank, CIMB Bank, HSBC Bank, RHB Bank are now using Pine Labs’ BNPL solution.
Pine Labs reports that it has managed to achieve success with its offline BNPL platform in India where it claims a 95% market share. During late 2020, Pine Labs had revealed that it was planning to introduce its BNPL platform through a partnership with Mastercard. The company said it would launch the service in Singapore, Thailand, Philippines, Indonesia, and Vietnam.
Kush Mehra, Chief Business Officer, Pine Labs, stated:
“It is an excellent product and a win-win proposition for everyone involved including consumers who get affordable buying options, merchants who are getting an enticing proposition to woo customers back to the stores and boost their sales, and banks and brands who get to build their brand loyalty. This integrated solution that we launched with Mastercard will now be further expanded to newer markets in the region.”
As covered, Pine Labs is an India-headquartered merchant commerce platform that’s focused on expanding its services to Southeast Asia, thanks to key organizational changes.
As previously reported, Pine Labs offers a merchant platform that includes technology and financial solutions for merchants to help them in increasing their revenue, reducing the cost and complexity of running a business, and managing the risks involved. The company connects financial institutions and consumer brands to empower merchants to deliver value to their retail customers.
Pine Labs and its tech platform power both offline and online “last-mile retail transactions, provide customer insights to merchants for targeted sales and offer risk-managed financial solutions for merchants’ business growth.” Today, more than 1 million merchants in India and several other Asian countries, use Pine Labs’ solutions to “run accessible, affordable, speedy and risk-managed last-mile retail operations.”
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