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Connect to the future of banking. Join us as we dive into the latest news and trends in banking and fintech, learn from leaders in the space, and make the complex simple. It’s common cents! Brought to you by Kinective, the leading provider of connectivity, workflow, and analytics software for the banking sector.
Welcome into the Common Sense podcast by Connected where we connect you to the future of banking. Join us as we dive into the latest news and trends in banking and Fintech. Learn from leaders in the space and make the complex simple. It's common sense. I'm your host Ben Hawbrooks and in this episode, you'll hear a recent conversation I had with Garrett Baird who is vice president of product for the banking and Fintech division at Paymentus.
Speaker 1:Paymentus is powering the next generation of electronic bill payments and this year, Paymentus celebrates its 20 year anniversary. And Garrett is gonna unpack a little bit for us the history behind their original vision from day 1 to simplify bill pay for consumers and how that has carried them up to today and a little bit about what's next. Garrett also shares Paymentus' vision to help FIs reclaim their place in bill pay, and finally, he discusses why real time integrations to the core are necessary for the future of real time payments. I think you're gonna really enjoy this. I certainly did.
Speaker 1:So without further ado, here's Garrett Baird. Alright. Well, I've got Garrett Baird here. He is vice president of product banking and fintech at PayMentus And, Garrett, thank you for for joining
Speaker 2:me. Great to be with you today.
Speaker 1:Absolutely. And I have seen that it is 20 years since the beginning of PayMentus, so we're gonna dive into a little bit of that today. And that's that's a huge accomplishment, so so much to celebrate there. But first, before we get into that, I want your elevator pitch for what does Paymentus do, and I know Paymentus says a lot, but what does Paymentus do for financial institutions specifically? And you have up to 2 minutes.
Speaker 1:Take it away.
Speaker 2:Excellent. So within Paymentus Banking and Fintech, which is the division, of our enterprise that works specifically with financial institutions, and Fintech firms. We we deliver modern money movement. So we empower financial institutions and Fintechs, to reclaim their position at the center of consumers' money movement payment needs. And how do we do that?
Speaker 2:Well, we have a flexible payment hub, that allows us to really transform the money movement landscape at scale. So for our clients, who are the financial institutions, and their consumers, they get the ultimate in choice and control and speed all in one location. And the products that we offer to do all of this are specifically, in bill payment, through our product called bill center. We also offer person to person, or p to p, products, so that you could our consumers can send money to individuals, very quickly and easily. We do account to account, or a to a transfers, as well.
Speaker 2:So, again, all three of those being a primary money movement that we embed into financial institutions' banking experiences. We also offer the ability for loan payments to be made quickly and easily with our financial institution clients. We also embed into this, lots of fraud management capabilities, and all of our products are powered by our unique instant payment network or IPN. We'll talk a little bit more about that. But at the end of the day, the value, that differentiates us really falls into the 3 c's, we call them.
Speaker 2:Choice, so, choice for consumers, to easily make payments the way that they want to. Convenience, where we're meeting customers anywhere they are. So in any channel, that exists, you can make, make payments, very con conveniently. And we offer control. So control for how our consumers view, information about what bills are due, how they pay those bills, and then, of course, how they move money, either between accounts they have within, different financial institutions or to friends, family, or or even the, you know, things like paying paying the landscaper.
Speaker 2:All of these happen through our platform.
Speaker 1:Excellent. I love the three c's, and I love how modern technology has really enabled those things in a massive way and payment is at the forefront of that. And I love talking about payments because there's lots of stuff happening in Fintech, but payments has got to be one of the more exciting categories. But you're pretty much right at time, which is perfect. And I already mentioned this, but 20 years of payment is that is quite an accomplishment.
Speaker 1:So congrats to you guys for that 1. And then 2, let's go back. Let's turn back the clock. How did payment is get its start versus where you guys are today? And then as a as a tag on question to that, where are you headed?
Speaker 2:A great question. So I'm I'm still a bit of a freshman here at Paymentus, having joined the, joined the organization just a short time ago. But, payment has been an organization that I've long admired. So I've been, you know, I've been in the payments business for a number of years myself. And when you look at the focus that our founder Dushyant Sharma had really from day 1 was just to simplify bill pay for consumers.
Speaker 2:So think, you know, go back to 2004, when this, when this journey started for Dushyant and the organization. Bill pay was just a very analog process. Paper everywhere. The bills, people writing paper checks, licking envelopes, putting stamps on, and, you know, taking that bill stack every month and working it through. Everything slow and disconnected.
Speaker 2:The, you know, the Internet, which had, you know, emerged. There were certainly digital banking that was happening. But those early digital banking and bank bill pay experiences, while, you know, while providing the convenience of, electronic bill pay for the first time, still didn't really solve, for some of the pain. In fact, it introduced some new pain. So things were completely dependent on the customer, kind of going in, getting everything set up, managing the whole process every single month.
Speaker 2:So you'd still kind of be working through that stack of bills and things like, well, when is this actually due? How much do I actually owe? Getting that in the banking channel was, near impossible. And then forget about the concept of actually getting a confirmation number back from that biller, that you can use when you call in, to your, let's say, your electric company or your water, water provider or, your cable provider. With the bank bill bill pay experience, the tradition was, well, here's a confirmation number.
Speaker 2:That's our confirmation number, that, the biller just completely wouldn't understand. And by the way, these payments would move very slowly too. So, and many times consumers would see, yep, you've submitted your payment, not knowing that behind the scenes, there would be a paper check that was going to be printed and mailed on their behalf, drawing on their account to be, sent in the mail, into that biller's just old school lockbox and process that way. And they thought, oh, I'm doing this digital thing, but, actually, you're relying on the US mail to get your payment there ultimately. And so, of course, that led to challenges with late payments, and just the lack of assuredness that a payment was arriving.
Speaker 2:And so the focus really was how can Paymentus, through modern technology, digitize the experience and give billers an opportunity to create an amazing experience on behalf of the customers, and bring the convenience, and choice, and control, into their interactions with the customers. So Paymentus began working very closely with billers, and the strategy was to start with, some smaller billers, apply the learnings, and continue to expand on the platform. So more capabilities, more channels, that we could deliver through our single platform on behalf of the billers, more types of payment methods over time. So, the platform moved from initial just ACH to then accepting card payments, credit cards, debit cards, digital wallets, solutions like PayPal and Venmo, can all be used to make payments and through multiple channels via the web, through mobile device, text to pay is a very popular option, and then, of course, by phone, on the, on the IVR. So Paymentus worked very closely with billers, to help them get paid faster, to lower their, costs of processing these payments.
Speaker 2:And the the result that that occurred was bill the biller direct experience, really eroded the volume, that bank bill pay had. Well, not not the volume necessarily, but the share that bank bill pay had. Because fortunately, these electronic experiences, you know, everything was going digital at the time. And, the the question was really, alright, if you're gonna go digital, you're gonna go and work with your billers directly as a consumer, or you're going to, pay through your bank. And Biller Direct, the experience of, working with, each of your billers, and using these convenient payment channels and experiences really leapfrog Bank Bill Pay.
Speaker 2:So that's where things become very interesting for the products, that I work on every day. Because we, as I said at the outset here, our goal is to allow our FI clients to really reclaim their place in bill pay and deliver a better experience that overcomes a lot of the challenges that gave the biller direct experience its leg up in the first place. So when we think about things, like, the ability to offer payment choice, to offer more information from the billers directly into the bank bill pay experience. That's where our business at PayMantis becomes so interesting because what we've introduced is the Instant Payment network that bridges the 2 sets of organizations that we work with, our billers and our banks. So by creating this network between the two, we can provide an amazing experience for bank bill pay, clients and their customers and members that includes things, like being able to quickly and easily see how much is due and when, to offer some added choice in the types of payments.
Speaker 2:So, for example, being able to offer card payments to some billers in our experience is something that is practically unheard of. And then to also offer capabilities like a real confirmation number served up to the consumer that's generated by the biller, and it's something they would actually understand, if you would call in, and speak with them on the phone if you had a question about, did did you get, this payment? Because ultimately, you know, consumers, when you look at them overall, that's 16 bills or so that, that on average we need to pay every month. And that is a massive, you know, $5,000,000,000,000 in annual spending that that represents. You would think those 16 bills, you know, so many people say, oh, well, I'm just, you know, set it and forget it on autopay.
Speaker 2:But the reality is, you don't have you have lots of lots of consumers that are living paycheck to paycheck, and that's even amongst some higher earners. So while the experience has really become very digital, it's still not automated. And so that's another one of our goals is to get the 60%, 60% of bill payments that are made as one time, to make those, more automated. And, again, that's whether they're working, with our biller direct experiences, from Paymentus or from our bank based experiences. We want that set it and forget it capability.
Speaker 2:Of course, for those, that are watching their cash flow and they want to review, each of their payments, that's gonna be there too. But we see an opportunity specifically in the bank, Bill Pay side of things to bring these unique capabilities that we have to the forefront on behalf of our clients, and their customers to really revolutionize bank bill pay. And, again, what we call is, look, the the the home base, for most, for most consumers to direct deposit from their payroll is still going into banks. And so that, you know, being the home base, we think many people appreciate and want to use that consolidated experience, but the bank bill pay capabilities just haven't kept up, over time to leverage that advantage that the banks have. We're turning that on its head because we know how to provide a great experience in bill pay.
Speaker 2:We learn, in the banking and Fintech division and our products at Paymentus from our colleagues that have had Biller Direct experience and created these amazing solutions that have really made us a leader in the space, over this 20 years. And we'll continue to build on this and really get to that point where we, PayMantis, are wherever consumers are and wanna pay their bills. Going back to that original vision from our founder, which was to, literally from day 1, simplify bill pay for consumers. So we are excited to be celebrating 20 years, and seeing, and and leading, leading into the future to make an amazing payment experience for everybody no matter where they are.
Speaker 1:Clearly spoken from a wealth of experience. I mean, 2 decades worth of of good work in that space, and I love the way that you put that, letting FIs reclaim their place in bill pay and revolutionizing that. That's that's that's pretty cool. That sounds like some fun some fun marching orders and and a cause to get behind. So I appreciate you outlining that for us and, can't wait to see what what what is next because that's that's such a great cause and clearly driven by consumer expectations and just, like you said, continuing to simplify and to think through every piece of that puzzle.
Speaker 1:Well, I know that this is this is kind of, a big a big beat for you guys, so I wanna kinda ask you this final question about real time integrations. And you you did touch on this a little bit earlier, so we're coming coming back around on this. So final question for you is, why are real time integrations to the core necessary for the future of real time payments?
Speaker 2:It's a great question. Honestly, I don't know how we could live without that. We we at the speed of modern money movement, the speed and the scale and the security that our financial institutions, you know, want and frankly need, organizations like Paymentus to deliver, having access to the data that is resonant on these systems of record that are the banking cores in the case of our financial institution clients, absolutely essential. So let's talk specifically about real time payments. So you know, in the, in the US, you've got the 2 emerging real time payments networks, from the clearing house, and then FedNow from the Federal Reserve.
Speaker 2:As we've begun to make our investments in those two networks and connecting up to those rails on behalf of on behalf of our clients, it's critical for a variety of reasons that we have access to the core data as, we're working through those real time transaction, requests, that are coming from consumers as they seek to move money. As we're moving the money, we need to check on a few things. We need to know about funds availability. We need to know about account status. We need to know about potentially existing fraud indicators.
Speaker 2:All these things in real time as we're seeking to make these transactions happen, because we need to ultimately balance the consumers' desire for the speed, that we're promising, and the financial institutions need to manage risk that can be associated with these transactions. So you think about the things like the potential for, for fraud. So, real time payments and, you know, you've heard and probably read the headlines about fraud, and, some of the challenges that Zelle has had, for example. So when we think about the real time ability to move money, we we need to also be able to, score and evaluate transactions, in real time. And connecting and getting the data, from the core helps us make much, much more informed decisions when it comes to potential fraud implications, of making a particular money movement, then, ultimately, we wanna improve the customer experience, because we see a lot of, lot of value in the the instant movement of the money.
Speaker 2:So whether it's, somebody, being able to very quickly, do a p to p transaction, somebody being able to very quickly fund, another bank account that they may have at another financial institutions. We see the need, to connect into, those core environment details in order to, make the right decisions very quickly and to allow us to assess the risk of transactions at the same speed as the money's going to move. So, again, we think it's absolutely essential to have that real time access in line, with the transactions that we're making by connecting to the course.
Speaker 1:Well said. And, I like the way you put it. It's this this is not an optional thing. This is necessary. To do what you need to do, you gotta have all the horses going at the same speed.
Speaker 2:So absolutely.
Speaker 1:Garrett, I really appreciate your time. You've you've given a lot of of great answers and, good overview of 20 years of excellent work at PayMentis, and I can't wait to see what's what's next.
Speaker 2:Thanks so much.
Speaker 1:Thanks so much, Garrett. Huge thanks to Garrett for that interview. And if you want to know more about PayMentis, you can visit them at paymentis.com. And as always, common sense is brought to you by Connective, the leading provider of connectivity, workflow, and analytics software for the banking sector. Check us out at connective.
Speaker 1:That's kinective.io and connect to the future of banking. Until then, we'll catch you on the next episode. It's common sense.