Alex: Hi, Miranda. Welcome to the podcast. It's so nice to have you here.

Guest: Hi, Alex. Thank you so much for having me. Thank you, thank you. I can't thank you enough, actually, I'm really excited to be here with you today.

Alex: So today we're going to talk about the world of payments. Miranda has been in the payments world for a while, so I hope to get some insights into the industry, what's happening there, what kind of issues people tend to deal with in this industry, and we'll see how the conversation would go and take us somewhere else, maybe. So, Miranda, let's start with just you telling us a little bit about yourself, how long you've been, and the payments.

Guest: Yeah, for sure. So I am originally from a place called Winnipeg, Manitoba, which is kind of in the center of Canada. And in my early twenty s, I started working for a few banks. So I worked for the Royal bank of Canada, and then I also had an opportunity here in Canada through a subsidiary company of bank of America before the recession. So that was kind of the beginning of my career and my insight into the world of banking and fintech. And just to give you a fun little tidbit, when I was working at the Royal bank of Canada, that would have been probably 2007 or 2006, and that was when online banking was just getting its start here in Canada. So I'm aging myself. But, yeah, that was really kind of my first insight into the financial world, how everything works. And I found it really interesting, not only the cash flow and the flow of currency, but also the technical side of it. So I worked there for a while, and then I decided in 2011 to move to Montreal, Canada, Montreal, Quebec, where I'm located now. And I actually moved here for an opportunity in payments. And that's a funny story. I did the job interview over the phone in 2011 with a very small ISO, which stands for independent sales organization. And that was a sales role. So cold calling businesses, asking for their processing statements. And that was really when I started to get into payments. I stayed with that company for a short period of time, and then I moved over to a company called Secure Merchant Solutions, which is also an ISO. And with that company, I was with them for almost five years. And that's really when I started to get an insight into how the world of payments works. So us focused, that's always kind of been my focus and my target market, particularly because there are much more businesses within the US, but the landscape there is very competitive. It's a very interesting market.

Alex: All right.

Guest: Yeah. Just to kind of backtrack a little bit there. So I finished quite a few different roles at secure merchant solutions. Really got to understand the payments market and landscape in the US. And then I was very lucky to get an opportunity with a company called Paysafe, which had a headquarters here in Montreal, and I believe they still do. I think they might be moving it around to Florida. There's a new CEO there, but I started working there as a partner manager for their independent software vendor, channel. And that is really what kind of sparked my interest dealing with their APIs. I managed a book of business of around give or take 20 software providers who were using Paysafe solutions for an integrated payments offering. And a lot of what that taught me was, number one, relationship management, which I know when we think about payments, we're thinking about cost and the flow of funds and technology and all of that. But so much of it is really relationship based. And really the only way for there to be a successful partnership between merchant or company or whatever you want to call them, and a payment provider is the relationship in itself. So I got to develop some really grounded, solid relationships with not only partners, but with industry leaders in this space. And then I really got to work with the different departments, product developers, ux, trying different things within the. A lot of business acumen and knowledge as well came through that particular role. I had a very good mentor at the time, Carla Ehrlich, who is really well known in the payment space, and she taught me quite a bit about the business overall, which I'm forever grateful for. So when Covid hit, the landscape started to change a little bit. In 2020, certain verticals, it was becoming quite clear that they would be impacted more than others. And at that particular time, we were working quite a bit, and I had a conversation with my partner at the time, who's my life partner and business partner. And we started to kind of poke around the idea of going off on our own, and we didn't necessarily know what we wanted to do. We had thought about becoming an independent sales organization ourselves and going out and selling merchants and onboarding them with different providers, but that model wasn't really what we were looking for. So in 2020, I actually had an opportunity come through from a very good friend of mine, Betty, to film a documentary here in Montreal. And the documentary was focused on Quebec and people immigrating into Quebec and into Montreal from all over the world. And I was part of a segment of the 2010 and later, and I was representing Canada at the time. So I got to film this documentary, which was really cool. And I ran into someone by the name of Afrina, who is definitely someone who's a mentor, a really beautiful person. And I got to talking with her and she took one look at me and she said, everyone needs someone who understands payments. And she said, I highly recommend that when you go home tonight, you update your LinkedIn and you say you're on your own and you work in payments. And she said, just do it. Rip it off like a bandaid and just do it. So I took her advice, came home and I did that. And over the next week or so, I was part of a few women in entrepreneur groups, one in Montreal on Facebook Facebook groups, one in Montreal and one in Toronto. And I think I did like one or two posts in the Toronto group. Just saying, I'm offering a 30 minutes consultation if you're accepting payments or need any help with understanding payments. It was really short, it was really brief, and it was kind of just like a fishing rod out there to see if I could network. And through that, I had an opportunity to meet someone, Camille, who is also a consultant based out of Toronto. And she reached out to me and she said, hey, I have a software client who's looking to get into payments. And that was when I was like, wow, that's exactly what I do. It's exactly what I specialize in. And that was our first client from there on, that was May April 2021. And since then, my partner and I have been working straight, which is fantastic. So two years and eight months as independent consultants and we've really structured our business as a consultancy. So I'm the founder, my partner is the co founder. Coming into next year, we are looking at leveraging a few intern relationships through some universities here and bringing on a couple of folks to help us build our portfolio and also individuals that we can mentor. That's something that's really important to us.

Alex: Quite an impressive path. Congratulations.

Guest: Yeah, thank you.

Alex: Let's talk a bit about the landscape of payments in general. Is it too much difference between the US and Canada? How would you describe, is it more or less the same or is dramatically different?

Guest: Yeah, I would describe the landscape as very different between the US and Canada. Canada is very small. I think our overall population right now is 38 million. So we're just shy of the population of California and the US. So that's r1 difference. The other real significant difference is the structure of interchange rates. The market itself, who holds the market? A lot of small businesses here in Canada, if they need payments, a lot of them are going to go to their bank, actually, and sit down with their financial advisor at the bank and sign up with a manaris, which I believe is owned by RBC and BMO. One of the changes that has happened over the last decade, I would say, or maybe even the last five years more. So are the stripes and the squares of the world. A lot of small businesses are going that route. So it's similar in that route compared to the US. But the interchange rates are very different, a little bit more regulated. In the US, there's a list of like three to 400 different types of interchange rates that a card can fall into. And here in Canada, the list is much smaller. It's very stagnant and controlled, more so, I would say. And also in the US, you've got not only the entire landscape itself at the federal level with federal regulations, but you also have some of the nuances that you can find between the different states. Some states allow search, some don't. So once you get into the US, it's a static market. It's very segmented, based on business type vertical. You've got banks, you've got payment providers, you've got iso levels, you've got resellers. It's very stagnant. It's a very complex market in the US compared to Canada. We have a couple of partners that we worked with here in Canada, one in Quebec and one in mean, we work with them to the extent of assisting them with kind of tightening up their processes, their software company. So that's a big thing that we do with them. But in the US, because there's so many complexities, that's our target market, and that's really where our kind of bread and butter clients live.

Alex: Makes sense. Are there any key players on the market, specifically in the US, that stand out from the crowd?

Guest: Yeah, absolutely. It depends on vertical again, right? Like if you look at a segmented market, so you've got the SMBs, as we would call them, or SMEs, that's just kind of a b to b model. Just maybe a small mum and pop or even some franchises you could fit into that model if they are accepting card present payments. So they've got, let's say a terminal, maybe they do have an integrated solution, or they don't have an integrated solution. There are absolutely some of the key players who have been around for a really long time. The FIS, the Worldpay chase, JPMorgan Chase still holds a good part of that market. Global payments. That list kind of goes on, I think, where we're seeing a lot of the change and competitiveness in the market is through the integrated payment solutions. So ecommerce, independent software vendors and SaaS companies, which is one of our businesses niche offerings, is our knowledge specific to teaching SaaS companies how to turn a profit and earn revenue off of embedded and integrated payments. And that's where the market is less competitive. And there are really only a few good players in that space right now. It's very niche, it requires a lot of overhead and management. And that's why I think even just over the past few years, we've even seen some of the providers leave this space and not necessarily cater to this space because of that overhead management.

Alex: So what are the, in your opinion, main challenges, main problems in the industry other than the overhead management?

Guest: Yeah, I would say one of the number one challenges is the lack of understanding of the payments landscape, the payments language, the pricing structure at the consumer level. And again, a consumer can be small, medium sized business, medium sized business, corporate account corporation, EcOm, all consumers. So that's where we're seeing a lot of gaps, is they're getting statements, they don't know how to read them. The card brands have been very sneaky in a sense, whereas they're extremely complicated and complex. If you're not on a flat rate like PayPal for example, PayPal does a really good job at simplifying their pricing structure. If you're a small business, it's a straight 2.9 and I think thirty cents a transaction. So you know what, you're kind of getting into the stripes and the squares are now blocked. If they're going that route, do a good job there. It's straightforward, but all the other payment providers don't. You've got tiered rates, you've got also known as blended rates here in Canada. So there's some language differences there, flat rates or interchange. Plus know and people are worried about managing their business. That's their number one. They want to make sure that the money that they're processing for the day is going into their account as fast as possible. And they're not so much concerned about doing the recon. Some of them are unable to do the reconciliation or they're outsourcing it, or they have limited resources with their accounting teams. So that's definitely the biggest problem, I would say, in the industry. And we definitely help fill that gap through our services.

Alex: Let's talk about what kind of services you offer. So you mentioned that your niche is in SaaS, right? Is it like the main profile of your clients or you also work with other businesses.

Guest: Yeah. So right now we can do a lot of things. One of the things that we are working on specifically for 2024 is really zoning in on what we want our offer to be, not necessarily what the clients are looking for from us. Combined, we have over 20 years experience in payments. But what I would say our two client bases are right now. Today we work in an advisory role with a lot of investors. So there are, as you can imagine, a number of investors who are looking to invest in the space and not only in payments, but in fintech in general. So investing in m a mergers and acquisitions, billing softwares, the whole plethora of investments happening there. And we work with investors just providing advisory. So advisory as to all public information, of course, as to how the landscape actually works in the US. Who are the main players? What does that competitive landscape look like? And that's been a really strong, solid client base for us because as you can imagine, with 20 years combined experience, knowledge, an investor trying to research, it's going to cost them a lot more time and money. Yeah. So that's been a really good one for us. And then. Yeah, the second is our niche, and that is working with SAS clients who offer embedded and integrated payment solutions to their. You know, we can do a number of different things there. Our most recent project that we are wrapping up at the end of this month is with a client called Vetsource. And with them we worked in an advisory level where they developed their own payment software for the veterinarian space in the US. And it's an integrated payment solution for in clinic, in veterinarian clinic and in hospital payment acceptance. So we worked with developers product UX to develop this software and it's live and processing and working really well. We helped with the RFP, so we helped negotiate some really good buy rates and we really taught them how to model the entire payment infrastructure and build it within their organization as a payment facilitator, actually. So this project really had multiple, multiple layers and it's going to be a really good story for our business to tell. In 2024, we helped them become a payment facilitator.

Alex: You mentioned some modeling of infrastructure.

Guest: So a lot of that was, I guess you could consider IT management consulting. So kind of building. Well, there's two parts to it. There's the operational part to becoming a payment facilitator for a software company, and that is risk underwriting anything that has to do with onboarding the actual submerchants. There's the operational piece of that. How are you doing that? Do you have the technology to do that? We partnered with a third party for both the technology and also for the personnel and building a merchant support team in house to be able to support those payments as a payment facilitator, software companies are required to really manage the whole end to end process from onboarding to support, et cetera, and they're taking the liability through that relationship. So just building the entire around that, and then also the infrastructure in terms of the technology. So what APIs are they using? Are they using the right APIs? What webhooks are they using in terms of notifications? So really building payments within the, and then ensuring that it is running like a well oiled machine, which can take years, and it is a very significant investment. But once it's up and running, it's a machine in itself. And we've been able to do that with vetsource and they are in a really good place right now to now just go out and sell their solutions and have things kind of operate and run in a really structured manner.

Alex: Yes, it sounds complex. I'm just wondering, how would I put it? Is there any sort of minimum size of the organization that will be interested in complexity like that? So because I'm coming from the background of startups where you would just put your product together, link it to stripe, here we go. We're looking for quick cash, while here it sounds to me more like a more fundamental, robust solution that would be there for years. And it does require expertise like you have.

Guest: Yeah, absolutely. So becoming a payment facilitator is not something that a startup would want to do right off of the bat, for sure, or even a small scale SaaS company. The minimum size or scale, I would say you at least have to have the bandwidth to be able to hire and build out a payments team in house that could be anywhere from six to eight personnel. And then of course you have to have the budget to be able to invest, and the budget can range depending on whether or not they're doing any development at the time. I have worked with SaaS companies who already have payment softwares, and really all they're looking to do is integrate with a payment provider. So there's definitely complexity there. This is not something that a startup or a small scale business would want to do. For that, we would recommend what is called a managed payback, which is essentially they're doing the development, they're getting decent rates, and they can still monetize the solution, but they're not handling the onboarding, they're not taking the risk. All of that is done at the payment provider. They're not doing any of the support. So this is absolutely a niche. And we've found that with 16,000 plus software companies in the US, none of them are doing it perfectly. None of them have fantastic support or someone in particular who knows the landscape as well as we do. And those are the clients who are coming to us and saying, hey, I need some help navigating this. Here are some of our problems. We have high returns, we have high chargebacks. We need to know, how do we manage these? How do we mitigate risk? And there are a lot of third party technology companies too, that we're partnering up with, infinicept being one of them. Infinicept is kind of a payment facilitator in a box, but what we're trying to do is really just marry both technology and operational support and bring that to our clients. And it's really, at the end of the day, it's service. And what we want and what we do offer is a white glove approach to all of our clients. Whereas if you need something, we're going to be the ones to help and go out and get it and find it for you.

Alex: You already mentioned some typical problems that clients are coming with to you, like if they want to decrease the returns, can you name more on this list? What are the main pain points that clients you work with come to you with?

Guest: Yeah, absolutely. There's the common problem a lot of smaller businesses have, which is they want to be able to reduce their payment processing rates. If they're not on a static 2.75, 2.9, they're on tiered rate structures or IC plus structures, whether they're processing card present or card not present payments, they want to see if there's any way to save money there. So that's one offering that we do for SMBs, and really what that looks like is just doing a complete overview of how their business is operating, payment provider that they're using. We'll take a look at the last three months processing statements, see what their average interchange rate is, whether or not they're getting the lowest interchange rate based on how they're processing credit cards. So that's one of the biggest things I would say that a lot of the smaller businesses are looking at. And then when you start to go into the medium corporate sized businesses or the SaaS companies or the big Ecom marketplaces, a lot of the challenges that they have is they just don't understand the landscape, they don't know how to navigate it, and they may be working with a provider that's really quite large and the larger providers are struggling a little bit with support and I think that has a lot to do with just the common turnover. But most level one, tier one support systems that are in place with the payment providers, the knowledge is not necessarily there. So that's probably one of the biggest challenges that I see is clients not being able to get the support that they need from their providers.

Alex: Makes sense. That explains that this kind of services will be needed for larger organizations because you wouldn't feel it much at the small level, at the level of startups, where the bigger you grow, the more simply cash income you have, the more expensive this transaction fees become and the more risks you deal with. Sounds interesting. Anything else you want to add to wrap it up on your site? Miranda?

Guest: Yeah, I was just going to say that the landscape is changing. Every know who the competitor is today may not be the competitor tomorrow. And I think that's one of the greatest challenges for anyone who's working in the payments space is to really understand some of the key changes, who's acquiring who. There's a ton of m and a in the space, and then what are the regulations that are changing as well, especially for some of the large scale businesses. And keeping an eye on all of that is a part time job itself. But yeah, for anyone who's ever interested in payments or looking for some payments, advice can always feel free to reach out to me for sure.

Alex: Awesome. Thank you very much for your time. Thank you very much for coming. That was an interesting conversation.

Guest: Awesome. Thank you so much. Alex.