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Leaders In Payments
Leaders In Payments
Pat Napoli, CEO and Partner at Appressa | Episode 350
Curious about how to build a fintech business that champions financial inclusivity? Join us for a captivating conversation with Pat Napoli from Appressa, where we explore his remarkable journey from New Jersey to making waves in the payments industry. Pat shares how Appressa supports consumers who’ve been declined by prime banks, helping them secure credit cards through near prime and subprime banks. Discover how Appressa's innovative technology, paired with their strategic partnership with Prove, works to rehabilitate credit scores for millions of Americans, making a significant impact on the issue of credit card declines.
Get inspired by Pat’s deep commitment to community service and his passion for inner-city education, exemplified by his involvement with St. Benedict's Prep in Newark, NJ. Together with his partner, Chris Mettler, Pat draws on experiences from MBNA and other renowned financial institutions to create a tech-driven solution for those with non-prime credit scores. As we wrap up, Pat offers invaluable advice for aspiring fintech professionals, underscoring the growing importance of data science in the rapidly evolving payments landscape. Don’t miss this insightful episode, packed with trends, strategies, and personal stories.
Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Greg Myers:Hello everyone and welcome to the Leaders in Payments podcast. I'm your host, greg Myers, and today's special guest is Pat Napoli at Oppressa. So, pat, thank you so much for being here and welcome to the show. It's a pleasure.
Pat Napoli:Thanks for having me.
Greg Myers:Absolutely. So let's dive right in, if you don't mind. Tell our audience a little bit about yourself, maybe where you're from, where you grew up, where you went to school, a few things like that.
Pat Napoli:Great. So I'm born and bred in New Jersey. I went to school in New England, was a high school teacher for a couple of years at my alma mater, st Benedict's Prep in North New Jersey Shout out to St Benedict's Prep. I taught history and algebra, coached a bunch of sports. Then I went back to school and I started my career at MB&A. So I moved a bunch with MB&A. My family and I moved. We were in Baltimore, madrid, spain, wilmington on a couple different occasions. So we've actually settled back in New Jersey. So I'm talking to you from the Jersey Shore today.
Greg Myers:Okay, great Well, let's talk about the company Oppressa, so tell the audience what Oppressa does. So Oppressa is simply put Oppressa is a network.
Pat Napoli:Our goal and my partner. Chris Mettler and I when we first started talking about this idea we really talked about inclusivity, and Oppressa takes the clients from prime banks we're focused on credit cards now, but this is good for all products Takes a credit card client from prime banks and routes them to. When we met with the CFPB, they called them adult, supervised, near prime and sub prime banks. So there's a handful in the States and we're really focused on helping people improve their credit.
Pat Napoli:It's about inclusivity and, if you look at the numbers, it's an important mission that we believe we're on, not just because you know, listen, when I finished school I was subprime, but really because there's almost 145 million Americans with a near prime or subprime credit score and last year there were 70 million credit card declines. So we think our network can help people, when they're declined by a prime bank, find a place to rehab their credit and get back into the credit cycle.
Greg Myers:Okay, so let's play the scenario I'm a consumer, I go to a bank website, I apply for a credit card and I'm declined. So today that might be the end of your journey. Right, it is, it is. And so you're saying you guys have now built rails where you can take that individual and give them other offers by routing their information to these other banks.
Pat Napoli:Correct. So either a proprietary or a co-brand credit card. So you're applying at Bank A and Bank A, which is a prime bank, probably located in Delaware, today probably you get an adverse action letter. Tomorrow, appressa is able to, with our strategic partnership with Prove we can talk about that later send your information to a near prime subprime bank there's only a handful and they can prequal you and get you a card that helps you rehab your credit. And look, in today's world, approval rates are not going up. They've dropped pretty significantly in the last 18 months. So we really feel like the time has come for Oppressa to help people get back and get something to help them rehab their credit score, because today, if you're a client for a credit card application, your FICO score goes down, which is a double whammy You're a client and your FICO goes down.
Greg Myers:Okay, so where's the company sort of on the development? Are the rails built or in development? Kind of give us an update there.
Pat Napoli:Yeah. So my partner, chris Mettler, who's I mean, he's a serial entrepreneur. He's had two successful exits so far. He owns five or six affiliates or aggregators, whatever language people kind of use. So CompareCredit RateQuote, businessloanscom. Chris and I have pretty much built the tech. It's 80% complete. We've spent a lot of time networking, socializing with the near prime subprime banks and with the prime banks and also with the co-brands and the network. So we're out there and a lot of people have really gotten their heads around. Hey, let's do this. We've actually we're pretty close. We think we're going to have at least two prime banks signed this year and we think we'll be in market probably first quarter with applications actually flowing down to subprime banks.
Speaker 1:So there's only a few right.
Pat Napoli:You have Concora, atlanticus, mercury, avant and, where I used to work, credit Long, which is by far the biggest near-prime subprime bank in the US. They're definitely the largest and they've been at it the longest and you know. All these banks, as I said before, are well-run, highly regulated.
Greg Myers:And it's really a great place for people to rehab their credit. Okay, and you mentioned Proof, so maybe talk about that partnership.
Pat Napoli:Yeah, so it really is. Proof's an amazing, amazing company. They are the leaders in identity verification for the credit card industry.
Speaker 1:I'll just talk about their US business, although they are international.
Pat Napoli:What they're able to do is improve the onboarding for a customer by almost 80%. So they really speed that up and they have a large group of data sources where they're able to verify information for a customer, make it easier to onboard the customer as well as reduce fraud on the back end. So we have a strategic partnership with Prove. Where they're able to, because they're connected to nine of the top 10 US banks. Where they're able to, because they're connected to nine of the top 10 US banks, they're able to help us kind of improve and increase and speed up our connection to these prime banks. Where the prime bank is like, oh gosh, I have to develop this whole new system. We work with Proof to do that and it really is a win-win for all parties.
Pat Napoli:So the tech lift, which used to be a big challenge, has almost gone away for the prime banks and that really has been a large hurdle we've kind of really kind of jumped over with Proof. The regulatory environment has changed in the US and the CFPB published Rule 1033, which doesn't necessarily say second look, but it really incents people to drive inclusivity in the US and that's what really kind of our connection to Proof is helping us do, where you say, hey, we're really helping people be banks, be more inclusive, and the tech lift isn't hard, so it really is a win-win. Now it's funny we've kind of built a better mousetrap with Proof to do this, but really, second Look was around in the late 90s. I mean, hsbc did this with a bunch of Wilmington banks back in the late 90s, so this is not a new concept.
Pat Napoli:It's definitely a precedent for Second Look. We've just really kind of make it a little bit more slick in the execution of it.
Greg Myers:Okay, and so is it all digital, or can it be done in a branch or kind of talk through that Great question.
Pat Napoli:So when you're applying, you're going to enter in a similar piece of information, depending on the bank. So first name, last name, you can enter in social cell phone a bunch of different kind of things you would enter in, and as long as it's entered into the application system of a prime bank, we're good to go. So any channel works.
Pat Napoli:You know, if you think about co-brand, they have purchase path onboard in-store we're able to take all those applications and route them to a subprime bank for consideration, and we really think we'll be able to get a lot more people approved, because in today's regulatory and kind of credit environment, prime banks can't go that well. They're just not able to do it and the near prime subprime banks really, because of focus this is what they do and that's why they're successful they're able to go down into the fives of a FICO score, which is pretty significant and allows more people to kind of get credit and help them kind of move the ball forward on their personal journey.
Greg Myers:Okay, and you mentioned international, but today you're just focused on the US, I assume.
Pat Napoli:We are so. In a prior life I was chief operating officer of MBNA Spain, so this really works in a deep credit bureau environment which is the US and some Western European countries. Now Proove is very, very big in Brazil, which makes a lot of sense. That could be someplace we could go kind of moving forward. But really we're only focused on the US today. Fingers crossed, we'll be in other places sometime soon, okay, okay.
Greg Myers:So I always ask a question about competition, but it doesn't seem like you have a big competitor. Maybe the competition is there isn't another path right? So I mean, how do you view competition and what you're?
Pat Napoli:doing. Yeah, you know it's funny, we really view so there's some experience in the BNPL space that do this today. But it's a little bit different order. Some people have said, hey, you know, some of the synthetic lenders would be competitors. We don't view it as such. We view the market as so big that we will work with synthetic lenders. We'll work with whomever. We don't pick winners. We're a network. We route applications. We want to do the best for the customer and it's funny.
Speaker 1:Somebody asked me hey, you're making the pie bigger.
Pat Napoli:We're actually not making the pie bigger, we're making a different pie. So this really allows for a whole different way for co-brands, businesses, retail airlines to look at the market and allow more customers to be included in their loyalty platform.
Greg Myers:Okay, Is there an opportunity or a play here for maybe smaller banks, community banks, credit unions even? They're always looking for new, innovative ways to get more customers and keep the customers they have. Is there any opportunity there, do you think?
Pat Napoli:Yeah, greg, that's a great question. The answer is absolutely yes. We truly believe. If you're a smaller bank, it's hard to lend to these customers, right? If you're somebody with a 570 credit score, you're kind of like, wow, this is a tough one to do. Our position is give it to the experts. And if you're working at Credit One, you are solely focused on near prime subprime credit card coverage. They don't have 57 products, right, they're not doing auto loans and all this kind of stuff. And they win because they're focused and that's where it really helps the customer.
Pat Napoli:And today, if you're a smaller issuer and you're putting that customer's application in the garbage. That's not good for anybody. Our position is give it to the experts, let that person rehab their credit and in 18 months, two years, guess what?
Speaker 1:Their FICO will be back over 700 and you'll be able to issue them their own credit card.
Pat Napoli:So it really is a matter of and I believe this it's focus and allowing people to do what they do best, and that's kind of how we believe we see the market.
Greg Myers:Okay. So I always ask about sort of the future of the industry. So maybe with the lens of what you're doing, what is the future? Where do you see this in? Maybe two to three years?
Pat Napoli:We're hoping to be integrated with a significant number of the prime banks in the US and routing applications to near prime and subprime lenders and taking a good chunk of those 70 million declines last year and giving them something to help them rebuild their credit. We started this business.
Speaker 1:I used to work at MB&A and over every door was think of yourself as a customer.
Pat Napoli:So Chris and I started with that premise and we're saying how do we help people and how do we ensure that people are on the right path and staying away from predatory lenders?
Speaker 1:So our goal is to get as many people back into the credit cycle rehabbing their credit and allow them to rehab their credit to a point where they can get a credit card.
Pat Napoli:They can get a car loan and really drive a much more inclusive environment. The numbers are huge. When you talk about almost 150 million Americans have a non-prime credit score. There's a need there and the market is significant.
Greg Myers:Right? Well, let's switch gears a little bit and talk about you. So maybe tell us about your journey You've mentioned a few times different companies you've worked at but maybe kind of lead us through your career and how you got to where you are today. So again as a high school teacher.
Pat Napoli:So it's easy transition right as an assistant wrestling coach. You go right into MB&A. So I started at MB&A and it was a fantastic experience. I had a bunch of different marketing jobs and my last stint at MB&A happened right when Bank of America purchased MB&A. So I was an expat. I ran marketing. Then I was chief operating officer of MB&A Spain. We lived in Madrid my wife and I actually still have an apartment in Madrid so we spent a good chunk of time there. And then I went to Barclays for a bit. I had a consulting firm and I ran into Sherman Financial Group and Credit One Bank and I worked there for almost a decade. So it was a great place to work. I really enjoyed it. Mb&a and Credit One were very, very similar in terms of their corporate culture, the focus they had.
Pat Napoli:I'm still very close to a lot of people at Credit One. It was a fantastic place to work and a couple of years ago I retired and took some time off. That commute from Madrid to Las Vegas would have been really tough, so my wife, and I are empty nesters and I took some time off and I met Chris Mettler and we really just hit it off and we're kind of kicking around a bunch of different ideas.
Pat Napoli:And Chris had this idea for building a network to take a lot of the clients from his existing business you know, compare credit. He was really struggling with the proofreads. He said, hey, I'm spending all this money and I'm not getting approvals. Hey, how do we do this? So I had worked on the American Express Credit One deal where Amex the clients are routed to Credit One, and today it's in the market.
Pat Napoli:You know we kind of kicked it around and said, hey, maybe this is something we'd figure out. So we've been and building the tech, building the team. We have a bunch of engineers working on it and this is a really tech-heavy business. So I'm Mr Outside and Chris is Mr Inside. My career has taken a bunch of turns. I've been in marketing, been in operations, did a bunch of business, devs things. So it feels like this is the right time for the business and it feels like it's the right time for the market and we're super excited about the business and hopefully we can help people along the way, Okay okay, so what are some things you're passionate about?
Greg Myers:Maybe one work-related passion and one personal passion.
Pat Napoli:Yeah, it's funny, work-related. I think I'm pretty good at solving problems. I like kind of taking something that was broke and fixing it. I thoroughly enjoyed, you know, when I was chief operating officer of MB&A Spain, because you know you have a bunch of different areas and there was always something, there was always a fire to put out, so I really liked kind of juggling a bunch of different balls in the office and figuring out, hey, customer service is doing great today, but collections, we got some issues and how to figure that out. So I really enjoy kind of having multiple things going on at once. You know a bunch of spinning plates.
Pat Napoli:And personally I mentioned before I was a high school teacher. I'm actually on the board of trustees of my high school. So it's an inner city boys Catholic school in the middle of Newark, new Jersey. It's a wonderful place. We actually just started two years ago with a girls division and inner city education is something that I think we really got to figure out in the US and I like to think that St Benedict's is a model for that and we figured out how to really educate young people of Newark and drive them towards success. And it's a crazy place. It's a really fun place. We got to raise 60 cents at every dollar to open the doors, but it's a really exciting place and it gets kind of my creative juices and we put a lot of energy. My family and I put a lot of energy behind helping the young people of Newark in that setting. So it's exciting. We really we thoroughly enjoy it and it's something that I don't play golf anymore, but we put a lot of time and energy behind St Benedict's Prep.
Greg Myers:Yeah, that's awesome, that's a great passion. So if someone came to you obviously you've had a long career in financial services, now you're kind of at the intersection of that and what we might call fintech and payments and just curious, if someone came to you and said, pat, hey, I'm interested in building a career in this space that you're in, and they're maybe right out of school and they're like, hey, this looks like a great opportunity, a great business, to be in a great market, to stay in the whole payments and fintech space, what would you tell them they need to do to be successful?
Pat Napoli:It's a great question. I really think, with AI and with speed and the velocity of change in lending, I would lean towards data science. I think it's incredibly important. Numbers are numbers. If you can do the math, you're going to be valuable in any organization and I think we're going to be more and more interested in that and it's more and more important. So, taking any classes, they can make you more analytical and successful. And you know it's funny, early in my career I kind of went wide with my experiences. That helped me down the road. But you know, I see more and more people kind of leaning in and going deep in one area versus wide, and I kind of think that's where the market's moving. Having a jack of all trades, I feel like, is becoming a little bit less important. You've got to understand the business from soup to nuts. I get that and understanding, hey, the implications of customer service versus collections, versus an entire cycle.
Pat Napoli:But you know, I would say leaning in towards taking as many courses and being analytical and coding and understanding the implications of AI is critically important for any young person. I mean frankly, that's what I tell my kids. I have kids who are in their young 20s. So that's advice I've readily given out recently All right makes total sense.
Greg Myers:Well, we're going to wrap up here in a second, but before we do, I want to make sure you let the audience know where they can learn more about Oppressa and more about you. So where would they be able to do that? So?
Pat Napoli:our website is oppressaco. There's no M in there A-P-P-R-S-S-S-A. My email is pretty simple. It's patmapley at oppressaco. We are open for business. We're super excited and we've been networking pretty well in the market, but we'd love to see if we can help people. Chris Mettler and I are super open to figuring out creative ways to use technology to be more efficient and with his breadth of businesses he's in insurance, he's in business lending we really feel like we can help folks find a creative, healthy, helpful solution for their business or their personal needs. And it's an exciting time. Greg, I want to thank you for this opportunity, Chris and I talked about it last night.
Pat Napoli:You know we're super excited about your business and being the 351st podcast was super exciting for us. I just really wanted to say thank you to you.
Greg Myers:Yeah, absolutely no. I appreciate you being on. Well, before we hit, stop here. Is there anything else you'd like to add? Before we go ahead and wrap up, I just want to say thank you very much.
Pat Napoli:We're excited. We think we're going to have some really positive news over the next quarter of business in terms of signing prime banks, and really that's where the volume is and we think kind of hopefully that first prime bank will push the dominoes over for this business and we can get rolling. And a lot of co-brands rely a lot on their loyalty programs and we really feel like that's where the market's going to be made first and we're just hopeful and really excited about this opportunity moving forward. Great, great.
Greg Myers:Well, Pat, thank you so much for being on the show today. I know your time's very valuable, so I really appreciate you being here.
Pat Napoli:Thanks, ray, have a great day.
Greg Myers:You too, and to all you listeners out there. I thank you for your time as well, and until the next story.
Speaker 1:Thank you for joining us this week on the Leaders in Payments podcast. Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes. If you enjoyed listening, please share on your social channels as well.