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Leaders In Payments
Leaders In Payments
Special Series: Next Generation Payments Infrastructure for Software Companies featuring Payabli's Will Corbera and Jo Phillips | Episode 370
In this episode of the Leaders in Payments podcast, host Greg Myers speaks with Jo Phillips and Will Corbera, co-CEOs of Payabli, about how modern payment infrastructure is transforming vertical SaaS platforms.
Jo and Will highlight the growing shift from legacy payment systems to embedded payments, allowing software companies to seamlessly integrate payment acceptance while unlocking new revenue streams. Payabli’s approach is built around the three Ps: Pay In, Pay Out, and Pay Ops, offering a unified API infrastructure that simplifies payments and enhances user experiences.
The conversation dives into the challenges SaaS companies face when monetizing payments—ranging from fragmented solutions to a lack of control over user experiences. Payabli solves these problems by providing a developer-friendly API and no-code solutions that allow businesses to customize their payment offerings effortlessly.
Additionally, they discuss the importance of pricing flexibility, interchange optimization, and split funding, catering to the unique needs of different industries. With a strong focus on innovation, Payabli is expanding into AI-powered solutions, real-time payments, and digital lockbox technology to further streamline payments.
This episode underscores why embedded payments are no longer optional for SaaS platforms—they are a strategic necessity.
This special series of the Leaders in Payments podcast focuses on the next generation of payments infrastructure for software companies. Payably provides a single, unified API and infrastructure stack to quickly and easily monetize and manage a SaaS platform's payments business built around the three P's Pay in, pay out, pay ops. In this three-part series, we'll dive deep into the three P's, including payment acceptance, paying vendors and suppliers and managing payments operations.
Speaker 2:Imagine seamlessly embedding payment acceptance into your vertical SaaS platform, tailored to your industry's unique needs, without the heavy lifting or the upfront cost. In today's episode, we'll explore how modern payment infrastructure helps vertical SaaS businesses simplify payment acceptance, improve user experiences and drive new revenue opportunities, all while scaling effortlessly and staying focused on what they do best. Hello everyone and welcome to the Leaders in Payments podcast. I'm your host, greg Myers, focused on what they do best, CEO. So, guys, welcome to the show, greg, great to be back. Happy New Year, yeah, happy New Year to you.
Speaker 4:Hey, greg, thanks for having us.
Speaker 2:Yeah, just so everyone knows, we're going to do a deep dive into vertical SaaS platforms and how they embed payments. If you want to learn more about Pavely as a company which we'll talk a little bit about here but a deeper dive was done back on episode 329, so in June of last year. So if you want to go back and listen to that episode, you can learn more from Will and Joe then. So let's start Joe with you. Tell the audience a little bit about yourself and a little bit about your professional background Awesome.
Speaker 3:Again. Great to be back here, Joe Phillips. I'm co-founder, co-ceo of Payably, southern California native, grew up in a family business. That's where I attribute a lot of my entrepreneurial spirit from. Although I grew up in Southern California, I've had the benefit of living all across the country and multiple countries as well, and from a professional standpoint my career has been dedicated to helping scale early stage technology sales at BD Orgs and really worked with some inspiring companies. I was an early team member at Englishcom, which ultimately became Grubhub, and was with them through their IPO. And then I was a revenue leader at ServiceTite. I was the first revenue leader there and that's really what inspired Payably and I'll talk about our experience at ST. But that's the kind of quick, sparse notes on my professional background. Otherwise live in Los Angeles, father of a growing three-year-old, and I think of myself as the family man in addition to an entrepreneur.
Speaker 2:Awesome. Thanks for sharing that. Will over to you Same question a little bit about yourself and your professional background.
Speaker 4:Sure. Again, thanks, Greg, for having us. This will be fun. I've been very blessed to be a 25-year fintech veteran. In my past life, I co-founded one of the very first payfax in the industry, helped pioneer one of the first payment platforms in the prop tech space. We scaled that business to over 10,000 merchants going into process volume, Ultimately had a very successful exit in 2017. And before taking some time with the family and joining forces with Joe, I joined forces with Joe to start Payably. So, other than that, I'm a family man. I'm a father of three, an awesome wife, love our road trips and I personally love everything to do with aviation. So happy to be here.
Speaker 2:Great, great, so we'll stay with you. Pay-in, pay-out, pay-ops.
Speaker 4:We help software companies quickly and easily embed and monetize payments. That's our core focus. We're a remote-first company based out of Miami, florida Primarily. We have a lot of team members here, but a lot of them are spread out throughout the United States. We have about 70 in total servicing over 75 platforms, close to 40,000 merchants which is pretty cool Processing currently billions in volume a year and we're on pace January 25, over January 24, to 7 to 8x our business, which is something that we're excited about, but it's definitely keeping us quite busy. Our mission continues to be the same. We believe that every software company should be a payments company or is a payments company. Our core why statement that we talk about every day as a team is to empower the entrepreneurial economy. So those are the kind of motivating factors behind Pay of Lee and why we wake up every day Great great.
Speaker 2:All right, let's get into the meat of the conversation. Let's talk about payments acceptance for these vertical SaaS companies, and so we're going to go over to you, joe, for this question. So what are the biggest pain points or challenges that these software companies have when it comes to payment acceptance?
Speaker 3:Great question, greg. I think when I look at companies that inspire me, a lot of times there's a motif and a lot of times entrepreneurs were operators in a specific vertical or industry and then they weren't content with the solutions in that market. So they went out to kind of build it and scratch their own itch, if you will, and I think that's very much the case for us. We know the pain points that software companies experience on a day-to-day basis because we experienced it firsthand. We were inspired to build Payo. I mentioned before the executive at ServiceTitan and our experience where we were scaling rapidly. We identified this opportunity to start monetizing payments and we really didn't understand much of it. So that's when Will kind of got involved and helped advise us and ultimately played a key role in instrumenting our architecting I should say ServiceTitan's payments business. But our experience there we saw we had a lot of the same issues that our customers today have. We knew we wanted to monetize payments. We knew we wanted to have a lot more influence and control over the user experience. For a SaaS company, retention and having a positive customer experience is just so critical and unfortunately in many times and this was certainly the case in Service Titan's situation and we see this still today.
Speaker 3:There's limited options and historically what's happened is you either have one of two options. From our vantage point, number one you're forced to kind of cobble together this mosaic of different legacy providers, which they'll give you strong economics and a little bit more control, but it's super time intensive. It's kind's managed multiple partnerships, multiple integrations. You have to hire a lot of team members to not only prop up this infrastructure but manage and maintain it over time. And that's certainly the path that we experienced at ST and we were forced to go down that path because we didn't really have an option. Otherwise I think, had we started a little bit later, there would have been another option which a lot of our customers have, which is you'll go with a solution like a Stripe Connect and certainly you get better technology in that situation, but you lose a lot of the control.
Speaker 3:The economics are oftentimes suboptimal or opaque. A lot of times folks don't truly understand how much upside or how much potential they have in their payments business and frankly, a lot of our partners say look, the support's just not there. It's very self-service, but when we have a big hairy problem or we want to think strategically about payments. We don't really have a thought partner to go to there, right, and I think what inspired us at Payably was we saw this playbook that Will, frankly, helped our team execute at Service Titan, but we saw that the next generation of STs the roofercoms of the world, the curb wastes, the build-ups and others were going to want a better, unified offering. So that's what we went out to build is a unified, modern payments infrastructure and API that couples white glove service, trusted advisory, and another piece is just unique, vertical-specific capabilities where some other platforms may not specialize in.
Speaker 2:So those pain points or challenges that you just mentioned, do they vary by vertical or are they pretty consistent across all verticals?
Speaker 3:Yeah, absolutely. That was a big insight that we had early on from Will's experience at Rebo and then what we saw at ST too, is for every vertical you have your own unique use case and use cases and kind of nuances to the business and, a lot of times, a horizontal platform. They may be able to support 80% of the needs, but the 20% delta is critical and really is an area that you can add a lot of value on and that's what we went out to build for. Is that 20% of really complex, hard to solve for use cases and needs? So, depending on your industry, it could be a lot of very specific things the software platform of the merchants they want, whether it be different payment modalities, different pricing types, different kind of special funding configurations. The list goes on and on. But these are things that really make a difference on the merchant and software platform experience and I think where we like to hang our hat and really focus on is company and product.
Speaker 2:Okay, so Will over to you. Can you talk at a high level about the payably product called Payins? Yeah, absolutely.
Speaker 4:What we've done from a product standpoint is we've taken the barbell approach. Right At the end of the day, we are an API-first ecosystem where we provide a very robust, developer-friendly solution for all API-based and diverse payment acceptance capabilities, from auth to capture voids, refunds, reversals, subscription-based payments, card-present, card-not-present payment links and so forth. But on the other end of the barbell, we've developed a no-code environment where we've called the creator, which is the ability for product owners and payment professionals at these SaaS platforms to build their own payment experiences in an embeddable way without having to write a single line of code, and so it dramatically offloads PCI clients' risk. So we kind of have these both ends of the bar built, depending on the taste of the partner as to how they want to start their payments integration, want to start their payments integration. In between, we've built what we think is an amazing world-class web application that partners can leverage to manage their payments business see other merchants, other volumes, manage everything from boarding to pricing services and so forth, and so they actually often would leverage it and resell it to their merchants.
Speaker 4:Right To have access to their branded white-labeled payments backbone. But that's kind to their merchants. Right To have access to their brand their white-labeled payments backbone. But that's kind of our approach, right? Everything is built off of our APIs, our web portals, our creator, so it's neat in that aspect. It gives our partners the ability to crawl, walk, run and go at the pace as to where they are in their payments journey as they secure the business.
Speaker 2:Okay thanks for sharing that. Will so. Are in their payments journey as you scale the business. Okay, thanks for sharing that. Will so, joe, as we think about these SaaS platforms, why is payments acceptance and embedding payments, why is that so impactful for these companies?
Speaker 3:So we oftentimes speak about this tectonic shift that's happening in the industry, where literally trillions of dollars of commerce is migrating off of legacy technology and distribution, the ISOs, msps of the world, the legacy processors. They're becoming embedded within vertical SaaS platforms and, from our vantage point, like the Service Titans, the Roofers, the Curbways and the PayHOAs, they're the new ISOs, right? And if you're involved in one of those companies, you have a board, a professional board, you have investors. Every single board in America is asking their portfolio companies what's your payment strategy? And the reason they're doing that is because they inherently understand that there's a multitude of benefits specifically for vertical SaaS platforms. Number one, which a lot of people talk about, is a huge revenue unlock. You're literally any of these software platforms may be processing tens of millions to hundreds of millions, to possibly billions of dollars of volume, and it's just latent revenue that they're just handing off to a third party where they could ultimately own the lion's share of that revenue. So there's a huge opportunity from a revenue standpoint. They've seen it with the mind bodies of the world, with the toes of the world, with the service titans of the world, and they want a piece of that pie as well, in addition to that which I think oftentimes gets overlooked is with a strong embedded payments offering, you have a lot more control over the user experience. You can create a lot more utility because you're building vertical specific pay bid functionality.
Speaker 3:And with these SaaS companies, revenue is not the only thing of importance. There's a lot of benefit to having net revenue retention and customer lifetime value. So when you make your product more stickier, from having better tools, better payment specific tools or these verticals, you get that kind of locking that's going to make the product stickier and then, as a result of that combination of revenue plus the net revenue retention as a default, your enterprise value goes up. So they know if you're able to execute on the strategy, you're going to be able to drive up the enterprise value of the company, get a better multiple on your valuation. So if you're looking to raise around our funding, if you're looking for a potential liquidity event kind of acquisition at some point, then you're going to want to understand inherently what's your payment strategy and not just payments but what's your broader kind of fintech strategy. I know we're talking primarily about payment acceptance today. We're purpose built for what we call share of wallet or kind of embedded finance across the ISV, the software platform.
Speaker 2:Okay, so Will. You talked earlier at a very high level about the Payence product, so maybe peel the onion back. Talk a little bit about their core capabilities of the product, and we've talked about the challenges and the needs these software companies have. So how does the product kind of help solve and meet those needs?
Speaker 4:Yeah, we like to break it down kind of run three vectors that we talk about internally is optionality on the payment methods, omni-channel features and what are those vertical or value-added features that are important to what we have called need-to-pay verticals. For payment methods, we currently support Card Wallets, apple Pay, google Pay and soon other wallets, ach, google Pay and soon other wallets, ach, bank transfers, mobile check capture, rdc, which is neat we're happy to talk about that more later. From an omnichannel perspective, given kind of the nature of the verticals that we focus on right, we'll have a lot of walk-in payments versus online payments. We'll have phone payments, over-the-counter payments, and so we'll provide them various tools like payment links or subscription capabilities, ivr systems, over-the-counter devices, point-to-point encrypted customer portals, etc. From a vertical feature standpoint, I think this is what is exciting about what we do and what's special about the payment space, right, because that 20% is that could be so nuanced and is so important in some of these verticals.
Speaker 4:But of course, universal network token is critical. It's often saying property space. You might have someone that owns multiple units and they want to use that same card or same token to pay across two different units, or across two different units across two different merchants, right Pass-through pricing, ivr solutions. We have a highly configurable batching and funding engine which is quite powerful. There's a lot of split funding capabilities, interchange, optimization, so things like that, I think, really bring a lot of value to the verticals that we serve.
Speaker 2:Okay, can you speak to some of those use cases around RDC and bill pay and some of those things that you mentioned?
Speaker 4:Yeah, I think that's where we're quite unique and different from this whole new category of payments infrastructure solutions. We look at the world, greg, as how do we help our software partners with allowing their merchants to capture the full set of payments that are coming in through the door? Often you'll hear payment providers just talk about credit cards and separate checks and, again, going back to what Joe was mentioning, it's very fragmented. Our focus is how do we help our software platforms, through one single unified API, empower their merchants to capture all forms of payments right? So mobile RDC is a really good example of that, where it allows our partners to offer their merchants a bit of snap picture of a check and ultimately we manage to transfer that money. We convert that check and digitize that payment right.
Speaker 4:You see this a lot in the need to pay verticals. Folks are walking in either like government or utility or property and they're wanting that clerk to take that payment right. Sometimes in the field services space you've got a technician that's out there and they want to be able to capture a check payment and not have it in the truck and wait several days for it to be deposited right. Another exciting thing that we're doing is kind of digital lockbox right, currently working on an embedded lockbox solution, which is extremely exciting For us. The future state of digital lockbox is it's quite transformative, right, because imagine a fully automated, real-time payment processing system where checks and other paper documents are captured and processed electronically.
Speaker 4:So this brings tremendous value to these need-to-pay verticals where they're wanting to consolidate digital and non-digital through one ecosystem, right, and so it brings a lot of value to the payers. It brings a lot of value to the merchants and it quite frankly gives these merchants and the consumers the ability to transform their business or walk into kind of the transformation of their digitization, their payments, at their own pace, right, and that's what we're doing. And finally, kind of IVR payments is another good example where often partners want to give their merchants ability to take payments over the phone. But how do you make that into a great experience without having a human pick up the phone? So IVR Solutions is something that we've invested in to again extend kind of the paths for folks to make those payments right In a secure and active way, but yet not having call queues or not having folks take that payment with a phone and it could be sometimes insecure. So there's tons of other features that we have. But those are really good examples and good question to tackle.
Speaker 2:Yeah, yeah, it's interesting, good segue into the next question. So, joe, over to you. Can you talk about your flexible pricing model and billing? I know the way Will positioned it was. You want to provide the solutions the merchants need, but there's also kind of the pricing and the billing that a lot of people don't think about. So can you maybe talk about that a little bit from the Payably perspective?
Speaker 3:Absolutely. You know it all goes back to our mission, right. We're trying to make software companies payments companies and if we're holding true to that mission if we're holding true to that mission, if we're living up to it it means we give our customers a lot of control in how they want to price and for certain clients they may want to discount, for others, when they're adding a lot of value, they might want to charge a premium, and we give them a lot of flexibility and optionality through a number of ways. I think the first one is education. Frankly, right, a lot of folks don't truly understand how the payment business model works. So it starts in the implementation base and we have a dedicated go-to-market call. We spend a lot of time with our partners to truly understand payment economics and giving them kind of a primer on how they can make money. It starts with that.
Speaker 3:I think another one is through the technology. We've got a very robust templating engine that Will and the product team have done a great job building. But they can basically configure whatever kind of pricing permutations they want and they can create whatever types of 40 applications with different pricing on it, so they may have again those strategic customers where they know they're going to have to come in and give custom interchange plus pricing too. They may have the middle tier customers where they want to discount somewhat and offer a flat rate but more aggressive, and they may have their standard pricing, where it's kind of standard 2.9 to 30 cents, or maybe they're in a vertical that we're passed through. These are common, like property management or education or government right, and they need compliant kind of service fee or convenience fee capabilities. We offer all that.
Speaker 3:I think another thing that we do uniquely well is we give them a lot of optionality at the point of sale.
Speaker 3:So in certain we have a lot of B2B customers that have very high tickets and at that point of sale they say, hey, look, this is Amex transaction that's over $3,000 and it's going to get downgraded Maybe on that invoice we don't offer that payment modality because we know it's going to be extremely costly.
Speaker 3:Or we have custom rule that says, hey, if it's over $20,000, we're going to take an ACH in the future, mobile check capture in the future, maybe like a wire, something that we're going to be rolling out very soon now. So those are some of the examples of how we give them some optionality in determining their pricing. We certainly will tell them hey, where's the floor? Ultimately, we want them to make this a corporate or a business model, so they need to earn money off of it. But we truly partner with them and when we know that they have maybe a really strategic enterprise customer or a franchise group and we got to get aggressive on the pricing, we'll help them with statement analysis and we'll help them configure their boarding applications to have the right pricing for them.
Speaker 2:Okay, you mentioned interchange. What are you doing around interchange optimization?
Speaker 3:Yeah, I talked about education once a customer signed. Really, I think the best compliment that we get from customers often actually prospects is that we spend all the time educating them on payments economics Payments in general, but payments economics in the sales process. And there's a lot of things we do from an interchange optimization standpoint. I think the way I look at it is in two buckets kind of features or technology and then behavioral or kind of setup. From a feature standpoint, offering level two, level three, processing is big. Usually there's about 30 to 110 basis points in savings there, offering things like network tokens that provide rebates. Back on interchange, from a behavioral or a setup standpoint, we look, we do.
Speaker 3:One of the things I'm very proud of is we'll do residual kind of reviews with our partners. It's kind of a free offering that we have and some of our finance team members will meet with our partners and review kind of their trends, of their economics, and they'll look for things on like are they getting downgraded? Why are they getting downgraded? Is it that they're not passing through AVS? Is it that they're leaving us open for too long? Maybe they're not categorized under the right MCC or MVV. So we're looking holistically at all those aspects of it and kind of providing them that consultation, that trusted advisory to help them maximize that margin potential. I think a lot of times people focus on what's the deal above the wholesale costs, right? What buy rates are you giving me? I think we'd like to really push our customers and tell them look, not only are we going to help you and give you aggressive pricing above these wholesale costs, but we're going to actively look for opportunities to reduce those wholesale costs as much as possible.
Speaker 2:Okay. So, joe, we'll stick with you for this next one. So how does Payably tailor your payment solutions to help create opportunities for these vertical specific use cases we're talking about?
Speaker 3:Yeah, great question. Will and I are people pleasers. We like to delight our customers, as one of our core values is to woo customers and have them write us love letters. I think one thing that we do very well as an organization is listen and help bring to market products that our customers really need. Will alluded to it, but you talked about some of these things like offline payments, like IVR. There's many, many different. You have the funding configuration. I think one of the things that I'm proud of was our split funding capability. We've had several customers. We saw kind of a trend where numerous customers were asking for split funding and we were able to kind of partner with them, scope out the work and build this. This was late 2023, we built this and we've seen great benefits from it.
Speaker 3:But, for example, if you look at the community management vertical right and this is a vertical where there's a lot of regulation and you have this kind of interesting dichotomy where, if you are a resident in one of these communities, you may have all these different payments you may make you may have to pay your HRA dues, you may need to pay a special assessment. Maybe you rented out the clubhouse for your kid's birthday or a fob key right. So there's all these payments that are coming due at a certain period and if you're the property manager you can't commingle those funds. You can't have all that money go in the same bank account. But you also want to create a good customer experience for the resident. You don't want them to have to have three different checkout experiences.
Speaker 3:So the split funding capability that we've developed is really cool, because off one authorization you could collect payments for all those different services or products and then behind the scenes you route funds to the corresponding virtual account. So you create a sleek, seamless experience. You address a lot of the challenges from a reconciliation standpoint and a regulatory standpoint as well. So that's just one example. Like that, we have a similar application for the education vertical. We have a partner that works for trade schools and they'll have a school that may outsource part of their curriculum to a third party and that customer their student who's paying tuition they want to collect that payment on an auto pay but then route those funds to the different parties that earn a portion of that. So that's just an example of some of the capabilities that we built from a vertical specific standpoint, and the list goes on and on, but that's the one that really comes to mind, okay.
Speaker 2:Okay, so Will over to you. So what's the roadmap look like for the pay-in product? How's it going to evolve in the future?
Speaker 4:A lot of good stuff. You know don't want to spill too much of the beans there, but certainly we'll continue to invest heavily in our offline payment strategy. We digital lockbox and bill pay. Again, we want to make sure that we could cover the full spectrum of payments that are coming in through the door on behalf of the merchants. Definitely expand the payment modalities that's always something that we're thinking about Additional wallets, rtp wires, fednow.
Speaker 4:Continue to invest heavily in our creator engine, our creator tool, which continues to allow partners to embed our paying components, because, if you expand on those technologies, it's something that we're always doing and, given that we're an API-first ecosystem, make considerable investments on our docs.
Speaker 4:We really want to make it easy for our developer friends and an enjoyable experience, right? Finally, we've been leveraging AI for quite some time, and I know it's been a thing now, but we've leveraged them for quite some time and we'll continue to invest there, so a lot of cool things come out of that In the near future. We currently have the partners leveraging some of our AI powered solutions today. So ultimately, I think, greg, though, is we want to make sure that we stay on our vision of unifying the three Ps, want to make sure that we stay on our vision of unifying the three Ps right. Making sure that we're staying true to the problem that we're solving, which is one ecosystem, one modern infrastructure stack that allows our platforms to monetize money in, money out and give them the operational tooling to run their payments business right Kind of pay in, pay out, pay out. So that's kind of where we're always in our road mapping session thinking about Okay, so, Joe Will, thank you both so much.
Speaker 2:It's been great. We're about to wrap up the show. Is there anything else you'd like to add before we wrap up? And Joe, I'll start with you, yeah.
Speaker 3:I think 2024 was a formative year for us. It was really exciting, I'd like to say. We hit escape velocity and we're already off to the races in January it feels like a couple of months already and we're only two weeks in but super excited to start payably, looking forward to a lot of growth, a lot of formalizing, a lot of the business, bringing a lot of key hires. I will want to say that we are hiring actively for a couple of key roles One, bringing our first product marketer, which we're really excited about. So if you've got product marketing shops and have payments and fintechs expertise, we'd love to hear from you. We're bringing on additional underwriters. We're boarding thousands of new merchants every single month, so we'd love to get some help on the underwriting side. I know our risk and compliance and underwriting leader would love that and always look in for hungry salespeople, talented software engineers. So please reach out if you're interested in what we're doing.
Speaker 3:One thing that I'll say is our core focus is software companies. We did sign a very large financial partnership partner who's going to be reselling payably to all their hundreds of thousands of merchants. So we're really excited about that. Very close to taking that live. It should be live early Q2. So a little bit more kind of news coming out about that. We're really excited. Not only are we working with some elite software companies, we're starting to work with really large enterprises like this financial institution. So, greg, thanks so much for having us. We're really honored to be here again and look forward to our next conversation.
Speaker 2:Yeah, absolutely, and Will any closing thoughts from you?
Speaker 4:Again, thanks for having us, I think you being in the space for some time. What's exciting for us is we feel like we're the part of this very new category in payments, right when it's a very exciting time in the payment landscape, where how value is being exchanged and we intend to be the bedrock on how platforms think about embedding and monetizing payments. And excited about staying on that mission and excited about the team that we've built and the product that we're delivering and definitely not perfect, but we work very hard to meet that vision, that need for our platform. So excited to continue that journey and see how things evolve and being part of that pioneering group of this new category in payments.
Speaker 2:Great Well again. Thank you both so much for being on the show today. I know your time is very valuable, so thanks again for being here today.
Speaker 4:Awesome. Thank you, greg, appreciate it.
Speaker 2:And to all you listeners out there. I thank you for your time as well. To learn more about Payably and, more specifically, their pay-in product, please visit payablycom. Slash pay hyphen in.