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Leaders In Payments
Leaders In Payments
Sal Rehmetullah, Co-Founder of Worth | Episode 355
What if you could revolutionize the onboarding process for business financial services? Join us in an inspiring conversation with Sal Rehmetullah, co-founder of Worth, as he shares his incredible journey from a Pakistani immigrant in Dallas to a trailblazer in the payments industry. Growing up in a family of serial entrepreneurs, Sal's entrepreneurial spirit was nurtured from a young age. He walks us through his academic pursuits and early career in equity research and consulting, before highlighting the impressive growth of Stacks Payments, which he co-founded with his sister. Discover the inspiration behind Worth and how it’s set to transform the onboarding experience for SMBs by integrating services like bank verification, KYB, and identity verification into a seamless solution.
In this episode, we also explore the future of payments and fintech, predicting a shift towards consumer-like experiences for SMBs fueled by digitization and AI. Sal shares his vision for building a legacy in payments, emphasizing diversity and inclusion in lending practices and aiming to create a business credit score system as impactful as FICO. Get a glimpse into Sal’s personal aspirations, from fostering talent to possibly owning an NBA team, underscoring his belief in the unifying power of sports. Don’t miss out on this episode packed with forward-thinking insights and inspirational stories from one of the industry's most dynamic figures.
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 on today's show we have a very special guest, Sal Rematula. Make sure I said that right, Sal, Is that okay? You nailed it, it's 11 characters.
Sal Rehmetullah:Most kids were trying to still stay in the lines. In kindergarten I was still writing my name, so I totally get it.
Greg Myers:Okay, great. Well, Sal is the co-founder of Worth. So, Sal, thank you so much for being here and welcome to the show.
Sal Rehmetullah:Pleasure to be here and I know Sanera's been on a few episodes with you before, Greg, and obviously big fans of the output and work and obviously love payments.
Greg Myers:Yeah, appreciate that. Well, let's go ahead and dive right in, If you don't mind. Tell us a little bit about yourself, maybe where you're from, where you grew up, where you currently live, a few things like that.
Sal Rehmetullah:Sure. So yeah, I'm a Pakistani immigrant. I was born in Dallas, texas. Go Cowboys for any of those fans that are out there. But I was born and raised in Dallas, texas, and bounced around a lot. We were serial entrepreneurs from our parents, went to 10 schools in 12 years and it was really you know. People always ask oh well, you're an army kid and honestly, it was just chasing a new business. And so we grew up in the SMB ecosystem and world here, which is America, and so landed in Florida for the last years of high school, went to the University of Florida and graduated there and ended up in the corporate world working for Morgan Stanley.
Sal Rehmetullah:So I did equity research, private banking, got fairly bored fairly quickly. It was right around that 2010 timeframe, so it didn't really matter what I did, it was right. It was like, after all of the math of the real estate bubble, so it was sort of where the market was just bouncing back. So it felt very much like you just didn't have a ton to learn, but you were doing great. And I got into consulting. So I worked for Deloitte Consulting doing global transformation work. So think when the cloud was the new wave and everybody was sort of transitioning, and so I worked with Fortune 50 companies I think HP, vmware, Symantec but on a global level. So I lived in 34 countries across three plus years bouncing around and doing a bunch of this work. I ended up at a company called Anaplan out in San Francisco. I was one of the first hires there, led their global customer success team. We went from 10 people to over 2,000 people, got to raise half a billion dollars in capital and I was there throughout the journey and got to ring the New York Stock Exchange bell there. So it was a really, really fun part of my career.
Sal Rehmetullah:Got to learn so much about scale growth and then decided to move back to Orlando, florida, where Suneer and I Suneer is my sister, also co-founder at Worth, also co-founder at Stacks, which was our prior venture. We started a company called Stacks Payments and we did integrated payments. Many of you may know about it, but we basically obviously we're an acquirer, but we did everything under the sun of payments. So not only do we have front-end platforms, we worked with ISVs, but we owned all the risk, all the management, the settlement, direct card brands, relationships across the board. We're owner-bin, and so it was a fun journey of frankly, managing $40 billion in payments, over 100,000 small businesses that we empowered.
Sal Rehmetullah:We're the first people to drop subscription and payments first people to combine card present, card not present when the buzzword of Omni wasn't existent at the time. So we were sort of the first people to do a lot of that and yeah so we had a phenomenal exit. We're still large shareholders in the company, continue to want it to be successful, but transition away last February after we recapped the business for a little over a billion dollars. So we were the first unicorns out of Florida one of the rare ones to do it in payments, and yeah, so we sat on the beach for a few months, got bored and really wanted to figure out what was next and landed on starting our newest company.
Greg Myers:Worth. Great Well, that's a great segue into the next question Tell us about Worth. I'm excited to hear what you guys are up to.
Sal Rehmetullah:So just give us the overview and what you're doing and where you're headed some accolades of oh, we sold it for over a billion and we had all these great things. But if I really reflect on it, the thing that probably could have made us significantly bigger was, frankly, the customer experience and onboarding of these merchants. And when you think about this process, it's so cumbersome, it doesn't matter who anybody's listening to. In payments, financial services, onboarding is, frankly at least on the business side very antiquated, right. So any of us can probably grab our phone today and sign up for a Apple credit card and take payments, probably within like 30 seconds to a minute from like the end to end flow. But if you try to do that for any single business application doesn't matter if you're opening a business checking account, a business credit card, a merchant account, it requires way more information and it's like three months of bank statements, two years of tax returns, p&l forecast, largest ticket. There's just like way more information. We were like why is that the process? Like? Why does it not mimic what you see on the consumer side? And so we went off on this journey to figure that out and the first thing we landed on was all of us.
Sal Rehmetullah:When you look at consumer peace, we look at W-2 income and FICO credit score, and that's sort of the two major principles that drive consumer credit. When you think about the business credit score, however, nothing really exists. You've had people like Dun Bradstreet that have portions of it, equifax has portions of it, but nobody can integrate financial information, and the reality of why that exists is the fact that financial information is so tough to come across right. So when you think of a small to medium-sized business, all of us operate so differently. Some people have a QuickBooks account, some people fill it in an Excel spreadsheet, some people have, you know, backend things that they utilize, and even if they have all the sophisticated processes, they're so variably different. So when you look at a business P&L for Sally's Shoe Store and you look at Joe's Pizza Shop, they're just going to be very different. $10,000 of inventory on hand mean two different things to both of them, even if they're in the balance sheet. One may be worthless if the electricity goes out for two to three days and the dough goes bad, and the other one might be, as you can see behind me, crazy, rare Jordans that are going to continuously rise in value over time. So how do you depict this?
Sal Rehmetullah:And so we went on this journey to say, hey, can we grab all this information? And so one of the things we learned is post-COVID, you had this huge digitization that happened in small to medium-sized businesses. People were applying for PPP loans. The governments themselves had to adapt a lot of the digitization, specifically in the small and medium-sized business sectors, and so you had secretary of states go online. You had all banking applications, payroll companies doesn't matter what you are figured out a way to get their digital footprint. Then you have this huge new concept of generative AI, large language models. I'm sure none of us can escape hearing about them. Really, think about processing tons and tons and tons of information in very, very, very ridiculously quick speeds. And so we sort of found ourselves in this center point of saying, well, hey, can we go out and get all this information and drive it to a central point, use generative AI to frankly, create a business credit score and find a way to underwrite businesses quicker. And so that's the mission we went on.
Sal Rehmetullah:And so, at Worth, we're the first people to bring together a financial business credit score for businesses. We focus and sell to large enterprises to be able to do all the things that they do as part of their compliance processes. So think KYC know your customer, kyb know your business Identity verification. We combine all of those tool sets that so many payment companies use. Everybody probably is familiar with the names like Plaid, lexisnexis, skyact, experian. All of us purchase these tools and sort of stitch them together with some docusigns to try to create a user experience. We combine that entire process for a small to medium-sized business to insert only two fields. So imagine you, greg, filling out a business application with only giving your EIN number and your address and being able to populate all that information that most people would have and being able to provide a full P&L for you.
Sal Rehmetullah:And so that's what we launched with the enterprises. It's been very well received. We're in some of the largest banking associations, some of the largest banks, some of the largest payment providers, and really removing that onboarding flow that they have by giving them something that the consumers really like, very similar to that Apple process that I talked about in the beginning. And then also for the SME themselves, giving them the visibility of their business credit score what we call the WORD score and showing them how to manage this business credit score. So think, very similar, like Credit Karma or a lot of the other things that came into the space to help us manage our FICO credit scores in the same way, to really empower the small to medium-sized businesses to look at their business holistically in a single point. And so that's a mission we've been on. We've been at it for about a year now and we are just thrilled with all of our early adopters, early customers. We've had great traction so far and continuously excited to scale.
Greg Myers:Okay, so is your typical customer, a bank, or maybe walk through kind of who those target audiences are?
Sal Rehmetullah:Yeah, so today, on our enterprise solution, it's anybody that owns credit risk and underwriting. So think about that as large banks all the way from credit unions to the top 10 banks in the world. And the process can be used for anybody that's doing some sort of business validation and onboarding of those customers. So it could be opening a business checking account, it could be opening up a merchant account, it could be providing a loan, so any one of those people have to go through the processes of KYC, kyb, identity verification. So we're simplifying that process for all those enterprises.
Sal Rehmetullah:And so we work with a lot of large payment companies that you would know of. We work with a lot of large banks that you would know of. So that's the primary customer on the enterprise side and on the SMB solution, it's the SMBs themselves. So the word score really think of it as your credit score. We want to empower you by showing you the way that large enterprises look at your business. Right. There's no real visibility into that. All of us know that the underwriting process is basically a black box, like we don't know why we were approved, we don't know why we got this credit limit. It's a lot of back and forth and really trying to unravel that aspect for the SMBs to be better prepared to be able to leverage their business credit.
Greg Myers:Okay, so have you seen the value to be more the consolidation of the information or the credit score, or is it really both, that whole ecosystem that you're creating?
Sal Rehmetullah:Yeah, I think the first real value for folks is when you look at the enterprises they look at like two major metrics right, they look at reducing their abandonment rate. So one, when you think about the onboarding flows, the amount of us that are like, oh, we got to go upload this statement, or now I got to go download this aspect, or I got to go grab this. So if you get rid of this seven page application with 56 fields down to two, that's just like mind boggling for people to be like, wow, I can get 1100 data points by just giving you two pieces of information, that's amazing. So every bank, every credit card company, any payments company that looks at that product is just astonished with the fact that we have so much information, not only in our database but we can gather from public, private and our direct integrations with the Secretary of State, our direct integration with the IRS. We can bring this information. So that's the first and foremost value add that they look at. The second thing is auto approvals right, like they don't want to sit here and go through the manual processes that it takes for the underwriting aspect. They want to be able to onboard business the way all of us make money in payments is to allow people to take payments, and if that process is their biggest part of our funnel, that's being held up, how can we help reduce that?
Sal Rehmetullah:And then the last thing that I'd say people see value in is because we're directly integrated in these systems. It's no longer static pieces of information. So, like Greg, you and I can go and apply for a merchant account at somewhere. It'll be September 17th and we're going to provide August's bank statement, july's bank statement, june's statement. Well, what happens nine months from now? There's no way for you to see what happened to my business or growth. But because we're directly integrated into those financial systems, we can actually continuously re-risk, monitor and underwrite them every single day. So that information that was a one-time underwriting process is now a dynamic process that's going to alert you if things drastically change in Sal's business. And so that's sort of the big value propositions.
Greg Myers:Okay, and obviously there aren't a lot of companies out there doing exactly what you guys are doing, but what you're doing has been done and is being done today. So how would you answer the question? How do you differentiate from sort of your competitors out there?
Sal Rehmetullah:Yeah. So when you think about the competitive space, I think you see a lot of point solutions. Right, like, platinum does a great job of bank verification. I'm not trying to be the biggest bank verification person. It's a part of the core offering that we need to do, but I'm not going to go and deal that. We partner with folks like Plaid that can bring that solution set in here.
Sal Rehmetullah:When you start to look, though, as most folks whether you're payments banking you have to solve this process yourself. So you go out there and you buy all of these tool sets. Right, you're going to go buy Plaid, you're going to pick a MidDesk or a LexisNexis for KYB, you're going to pick a Persona or a Clear or something for identity verification, and you do all of this. Then you bring in a few data scientists and an engineering team to wrap all this stuff around into your onboarding flow, and then you manage that onboarding flow with the small to medium-sized business and create a decision engine for yourself. You have tools that have come into the ecosystem that have helped stitch this together, like Alloy, that do a great job of an orchestration engine, but you still have to buy every single point solution and then build it based on your parameters. Well, what we're trying to do is say why do you have 12 vendors? Why are you spending all of this resourcing on this area?
Sal Rehmetullah:And the reality is, is most people they look at their customer as that risk team or that underwriting team. Because of our experience with 100,000 SMBs, we look at the customer as that SMB having a consumer-like product, and if we can empower them to be able to fill out this information and provide that same risk and underwriter with 1,100 data points without having all of this stuff, they're enthralled. They're so excited to be able to see this amount of information. And so that's where we see the biggest value proposition in what people do. And so when we look at the competitive space, you're right, there isn't the soul that's doing what we do. But we do see a lot of point solutions where people are like well, we're looking at this KYB solution, how do you fit? And on a head-to-head we can almost beat any single person there. I mean, we're a global platform, we're directly integrated in the Secretary of State, so we have real-time information. But on a holistic approach is, I think, where we really dominate.
Greg Myers:Okay, where do you see and obviously you can answer this in the context of what you're doing but where do you see the payments and fintech industry headed in, say, the next three to five years?
Sal Rehmetullah:Yeah, I think the big thing that I see and you know, money 2020 is coming up in a month from now and we're starting to get all the areas. I think that the amount of stuff that's happening in payments is just so amazing, right? So if you think, like just digital technology, share some random stats like 10 years ago, 46% of payroll checks were handwritten Like how crazy is that? That's 10 years ago, it's not even that long ago. Today, that number is 9%, right? So you just look at and I'm talking about payroll Now you can apply that same principle to every single division, whether it's credit cards, point of sale systems, et cetera. You've just seen this huge digitization.
Sal Rehmetullah:The thing that you haven't seen, however, yet is when you think about the credit risk, the underwriting, the back office functions. We have not done anything to consolidate, speed up or create a business process that is consumer, like All of us are. So, on an on-demand economy aspect, right? Could you imagine signing up for Netflix and then waiting four days for somebody to come install Netflix for you? You think about that, but that used to be the old way that we installed DirecTV or whatever you came from, and that's how it feels like when you talk about business or credit score underwriting or any businesses.
Sal Rehmetullah:When it comes to it, it's like we go back to this antiquated process, and so I just think that the whole space it doesn't matter what it is specifically in SMB is going to really get a consumer-like feel. It doesn't matter the product, it doesn't matter where it's going to come from. You're going to see that and you're going to leverage a ton of the new generative AI aspects that are there, but I think the SMB area is going to really get a great customer experience uplift, and I think that's where sort of the next three to five years is going to be focused is who can create value for these businesses, and we all sort of did the race to the bottom when it came to payments, and you constantly see new pricing models and stuff, and that's great, but now consumers are actually willing to pay way more, or businesses are willing to pay more for value, and so that value is simply saving me time one without this cumbersome processes that exist, and then that's really where I see a ton of the ecosystem going.
Greg Myers:So if AI didn't exist, would you be able to do what you're doing? Or is AI just part of the secret sauce and wouldn't be able to do it without it?
Sal Rehmetullah:Yeah, it's funny because I was actually on a panel the other day and somebody asked me a similar question. I look at AI. Do you see a lot of people talking about I'm in the cloud anymore? 12 years ago, you couldn't see an ad without being like, oh, but we're cloud-based. We're cloud-based. That's how I feel about AI.
Sal Rehmetullah:Five years from now, you're never going to have anybody talk about it.
Sal Rehmetullah:It's just going to be a part of the way that we run the general tech stack, the general way that you utilize information. So I don't look at this as is it a competitive advantage to start, absolutely, and it is great technology, just like cloud-based technology was to be able to scale an organization, and so that's where I believe that the AI piece is there. The thing I will say is, processing this amount of information would not be possible without AI in any way, shape or form, and I think that that level of processing information is something that it is a competitive advantage in the AI space, and I think people need to start to adopt these principles to be able to do that in real time, and I think that's what you're going to start to see, but I do believe that it's going to be a standard. I don't look at this as like everyone's not going to adopt it. I think there'll be slow adopters. And yes, we're going to talk about security risks. Yes, we're going to talk about fraud and all the other things that a little bit and talk about you.
Greg Myers:And this first question is typically about your professional journey and you kind of walked us through that. So what I'd like to do is maybe you said you're sitting on the beach, got bored what was really the motivation? I mean, is it just like you love to build and scale businesses and payments? Was an itch you still had and wanted to be involved in the industry. Still Kind of maybe walk us through mentally what you were thinking and why you guys started what you started.
Sal Rehmetullah:Yeah, Well, look, sunir and I are very blessed. Obviously, we got to have an amazing outcome. We're still very large shareholders and financially we're very set. We're still very large shareholders and financially we're very set. We're blessed to have built the opportunities that we've had, and so it was no longer a financial motivator to say like, hey, this is what we need to do. And so we both went on our own individual journeys, and she'll think it was super short. I felt like it was so long.
Sal Rehmetullah:All of us are in different places of our lives and I think the thing that was tough is when you're a part of something for 10 years, like we were at Stacks. It became a part of me as my personality. It's almost like mourning a loss of a parent or anybody that sort of goes through your life. That's still there just because I had 14-hour scheduled days, I had all this stuff, that all of a sudden you have this immense amount of free time, and so it's like I did everything under the sun. I played golf, I played pickleball, I worked out twice a day, even though I may not look at the moment, but we did everything that you could do and I think the thing that at some point. I was like I got to do something and I tried all sorts of things. I went back and I was like, well, we could do Stacks 2.0 and do it in a different region and or should we look at some other different ideas of learning platforms or LMS platforms? And so we kicked around the can in a lot of ways, but the thing that I think it came down to is we wanted to do something that was very big and we wanted to build something that was more legacy-driven. And we got into my house and I remember we were trying to debate all these different platforms and in no way shape or form am I saying this comment of an egotistical way, but the comment was just around Michael Jordan shouldn't play baseball. He was built to build championships and build championships in basketball. That's where he was.
Sal Rehmetullah:And I felt like the successes that we had historically had, that knowledge that we had in payments, we would be probably wasting a version of our talent if we did another thing. And not saying we wouldn't be successful at it, it was just we really, really knew the space and there was just so much opportunity and the place we felt like we wanted to leave a legacy behind was really empowering the small and medium-sized businesses. I mean, we were always there. We grew up in an immigrant family.
Sal Rehmetullah:I opened that with a story of who we were and what we did, and I think when we sat there and we said, well, can we really build a business credit score and really fix a lot of the challenges that exist, right? So, diversity and inclusion when it comes to lending and fair lending practices, the statistics are going to be exactly what you think they are right. Like I'm not going to give you something that's going to shock you, but I actually do believe and maybe I view the world with rose-colored glasses, but I do believe that banks and folks want to change that. They really do and they're trying to put the right steps in place. But when you think about the models that are built, they're based on linear regression models, which are historical processes, are going to be the future predictor and if history was based off of those same statistics, unfortunately that's going to be the same output of the models.
Sal Rehmetullah:And so how do you change that? And I think that we were like, well, can we really be somebody that's there? And today we're on that journey to build a business credit score and we're going to win with the enterprises and we have to deliver the onboarding value, we have to do sort of the value propositions I said, but I hope to look back 10, 15, 20 years from now and say that the business credit score and the worth score is universally accepted, just as the FICO credit score is, and really empowering them to do it. And so I think that was sort of that full journey and it's really about empowering those small and medium-sized businesses, leaving a legacy and making a broader impact. That, frankly, is way more than financially driven for us.
Greg Myers:Okay, so what are some things you're passionate about?
Sal Rehmetullah:Maybe one sort of work-related or business passion and one personal passion people that made 100 plus thousands of dollars with us, and so I think just empowering and seeing that trickle effect right, you talk about the PayPal mafia and the other people I love seeing all the people that worked with us starting their own things or often new C-suite gigs and having new opportunities. I think it's something that we thrive to do and I think just enabling that and being somebody that can be a catalyst to do it, I think it's just something that Cinder and I take a lot of pride in and I know I personally do. So. I think that's just something on the business side that we constantly want to do. We want to evolve, see talent grow and empower a lot of people to have the opportunities that we've gotten.
Sal Rehmetullah:And on the personal side, I'm a big sports junkie, so people always ask what's the big thing that you want?
Sal Rehmetullah:And if you look at my LinkedIn, I want to own an NBA team, so it's an absolute passion of mine to get to some day of being able to do that, and we're well on our way of getting there. But I'd say just sports and the energy around winning. I think sports is one of those beautiful things that when you're a fan of sports regardless of your worldviews. It doesn't matter what politics you are red, blue, blank when you're in a stadium with 100 hundred thousand people, you're just either team blue or team red and during that time, like it doesn't matter who's sitting next to you, it doesn't matter what their beliefs, thoughts, blanks, et cetera are like, you were just so amazingly at a unified front and I think that that's cool and such a powerful thing that sports brings you is just this unification that I hope can continuously be around and hopefully the country continues to adopt. But that's just my beauty of sports and goal is to really really own an NBA team there.
Greg Myers:Okay, that's cool, that's cool. So, sal, if someone came to you and maybe they're right out of college or maybe they just want a career change and they say, sal, I want to get into payments and FinTech, I want to build a career there, what would you tell them they need to do to be successful?
Sal Rehmetullah:Yeah, I think the beauty of payments one is just that it's actually the center point of so much right. I think it's, frankly, the nucleus of so many different transactions. It doesn't matter what you do in this world, they're all around a payment transaction and the amount of data that sort of exists there, and so if you're new in this space, it doesn't really matter what position, whether you're a technology coder to a strategy person, to a marketing person I think it's just understanding where the world is going when it comes to payments and really thinking about that global commerce level. Right, I think every day the world is continuously shrinking, and how can you think about solving very, very specific problems for consumers and businesses at that lowest level? And I think if you get really maniacal about creating great user experiences for them and you focus on the customer experience, I think that you will have an amazing career in payments, because I think that that's where the most of the effort is really needed.
Greg Myers:Okay, well, sal, we've covered a lot of ground, obviously, about you and your background and the company and what you guys are doing and your vision there. So is there anything else you'd like to cover before we wrap up the show?
Sal Rehmetullah:No, I'd love for you guys to join the waitlist for wordscorecom. It's been a pleasure to be here, really excited to continue to hopefully make a dent in hopefully making debt and payments. We'll be at Money 2020. For anybody that's around, feel free to come say hi, but thank you so much for having me, greg.
Greg Myers:Yeah, great. So, sal, I know your time is very valuable, so thank you so much for being on the show today. Thank you, 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.