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Leaders In Payments
Leaders In Payments
Dustin Magaziner, CEO of PayBright | Episode 377
Explore the world of payment processing in our engaging conversation with Dustin Magaziner, CEO of PayBright. From his beginnings as a college entrepreneur to leading a successful company, Dustin shares invaluable insights into what sets PayBright apart in the increasingly competitive payments landscape. We discuss the vital role of independent sales agents (ISOs) in the industry, unpacking their challenges and the changing dynamics driven by technology.
Dustin delves into PayBright's commitment to ethical practices and superior support for their partners. He explains how understanding technology is crucial for agents to thrive and how embracing innovations can lead to future success. The conversation also touches on the potential of AI to transform operations and improve customer service quality in the payments sector.
Whether you’re an aspiring agent, a seasoned executive, or simply curious about the payments industry, this episode offers a rich perspective on navigating its complexities. Join us in understanding how to elevate your approach and stay ahead in your career!
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.
Speaker 2: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, dustin Magaziner, the CEO of Paybright. So, dustin, welcome to the show.
Speaker 3:Thank you so much for having me. I'm looking forward to it.
Speaker 2:Great. So why don't we start out having you tell our audience a little bit about yourself, maybe where you're from, where you grew up, where you currently live, a few things like that?
Speaker 3:Well, I'm happy to tell everyone a little bit about myself. I currently live here in Raleigh, north Carolina, which is where our office is, where I'm at right now. I moved here somewhat randomly. I hadn't spent much time here before I moved here. I'm originally from outside Philadelphia, on the New Jersey side of things, so go birds had to throw that in here right now with the Super Bowl coming up in a couple of days. But I am from outside of Philadelphia and live now in Raleigh, north Carolina. I'm happy to tell you anything more, but that's kind of where I'm from.
Speaker 2:Okay, great Well, let's talk about the company. So tell our audience what Paybrite does.
Speaker 3:So we are an ISO. We really are focused on agent ISO realm of this industry. So we aren't in the business selling directly to merchant. We're not doing SEO or online ads. We are 100% based on independent agents out in the field in their hometowns, working with Main Street USA type merchants and providing them the absolute best service and support that can be offered. There's a lot of things that we do. It'd be hard, obviously, to cover it all on a podcast, but really that's what the nuts and bolts of Paybrite are. It's agent, ISO-centric and really focused on the agent experience. I'm somewhat obsessed with the experience. I believe if we have a good experience for our sales partners, that will translate to an even better experience for our end user, of course, the merchants. So that's a short and sweet overview of Paybrite.
Speaker 2:Okay, and are your ISOs and agents all US-based?
Speaker 3:Yeah, so we are 100% US-based. Today we have explored expanding into Canada, although I don't think we're going to do that. You never know, it's always a conversation that comes up. But yes, we are 100% US, from Hawaii to Alaska to Florida and everywhere in between, but, yes, us-based.
Speaker 2:Okay, and are your ISOs and agents? Do they focus on certain verticals or are they pretty much all sort of small, medium-sized business?
Speaker 3:focused? Great question, and it really varies by sales partner. I've got agents who are newer to merchant services and they're walking down the street talking to any business in their area. I've got others who have been in this business much longer and maybe are starting to go upstream to partners who maybe are, as I like to refer to it, whale hunting and maybe only going after enterprise-level merchants at where they're at in their career. We're here to support those individuals and what they're going after is a little bit more focused on them. I've got partners that only focus on enterprise restaurant chains If they don't have at least 10 locations maybe too small for what that sales partner is looking to do and others who may be signing up a merchant that's a food truck and just needs a little mobile reader. So we're here to support all of it and give our partners ultimately what they need to be successful.
Speaker 2:So when these partners come to you, what specific solutions are they typically looking for?
Speaker 3:So it can vary. Some are just looking for a company that's going to stay out of their way and do business ethically right. Hey, don't take advantage of my merchants, don't raise their prices, pick up the phone when they call or when the agent calls, and just give me a really good platform to be comfortable with. Of course, we're going to deliver that. Others are looking for a platform that delivers a little bit more, that has products and is really sophisticated in some of those arenas. So over the last couple years, especially with where I think the industry is going, we've invested and have spent a lot of time building out a team here at Payback called our POS Desk and our POS desk. Our POS desk is a team to help these individual agents and smaller ISOs compete more with the likes of the stripes of the world and the squares of the world from a product perspective. Our team will help demo and provide technology that a lot of these agents aren't familiar with or don't have previous to us. We also assist with things like integration support.
Speaker 3:Maybe an agent comes across a business and that business is using XYZ system today and that agent doesn't know a lot about integrations or what the capabilities may or may not be. So they can reach out to our POS desk and say, hey, here's what they're using, what options do we have? How do we plug in, what gateway or what path do we have to working with them and, unlike a lot of our competitors that say, hey, you're an independent agent, you have to figure this out on your own, we get into the weeds and we really help simplify what can sometimes be a really complicated process and in most cases we'll even do it for them. So we really want our sales partners to do what they do best, which is relationship building, selling, and let us handle in those instances a lot of the technical side of it. So there's a lot. Our POS desk is a big focus for us because I do believe personally that that's the future of the industry and going to be a big future for Paybrite.
Speaker 2:Okay, and you mentioned having that team. How big is the company overall?
Speaker 3:So we're sitting around 15,000 merchants today. In terms of our overall landscape there, in terms of our office here in Raleigh, we've got somewhere around 30 people sitting in the office right now. Of course, we do have a fair amount of remote folks as well, given the nature of the modern world, but we are scaling back a bit on remote. We were fully remote through 2020, 21, and even the first half of 22. But I do personally believe that we're a bit more efficient. Culturally. There's, I think, advantages. So we're bringing more of the hiring back to Raleigh, not letting anyone go right, just really focusing on local. I think right now we have about 10 or 12 open positions that we're hiring for as well.
Speaker 2:Okay, okay. Yeah, that remote versus in-office thing is quite the topic these days. We could probably talk a long time about that.
Speaker 3:Yeah, it's a hot topic, for sure. I have so many friends that are struggling with this in their own world. Outside of payments, it's everywhere right now.
Speaker 2:Yeah, and you know what, without getting into it, it's a challenge from the leadership down to the employee right, making the decision and what the right one is, and then having the employee often having to make the decision. Yeah, that's a whole other podcast. But back to Paybrite. What, would you say, differentiates you guys versus the other ISOs out there?
Speaker 3:There's a lot right when we talk about other ISOs out there. I think we even have to ask what are we talking about in regards to other ISOs? You have other ISOs that are, frankly, some of the companies that I would really want to stay away from. They may not have the best ethics at times. They may have business practices that I just don't believe in. Then you have other ISOs out there that maybe they're not a challenge or an issue from an ethical perspective, but maybe they're a problem from a pricing or a servicing perspective. Maybe they don't pay the greatest of commissions or they properly staffed or being able to service their customers well. Then you have companies that maybe don't have the products or technologies to really allow their customers well. Then you have companies that maybe don't have the products or technologies to really allow their sales partners to compete effectively. What I like to say is that we want to be all of that in one. I believe we have a saying here.
Speaker 3:I like Shark Tank. There's a quote on Shark Tank. He says all roads lead back to Mr Wonderful. I joke around that all roads lead back to Paybrite for independent agents. I really believe that if you're an agent of merchant services. If you're not working with Paybrite, you're missing out on sales, you're missing out on opportunities, you're making your life harder and you're leaving money on the table. And you know that's really what Paybrite's about is. We want to help our sales partners sell more business, keep their accounts longer, have less headaches, have better support. A lot of these are just things that when I was an agent, I wanted right, so we built these things into our program. I mean things like you know.
Speaker 3:No cancellation fee when I started in this business was unheard of, truly. I mean 10, 15 years ago, every processor, for the most part at least, had cancellation fees and I said, well, why do we need cancellation fees? If we deliver what we promise and give good quality support and we price customers right, why would they want to leave us? And so, from day one, we never had cancellation fees and our agents were able to feel good about that. Then, of course, I saw other companies were increasing prices on their merchants and, as a sales rep, there's nothing worse. It's a gut-wrenching feeling when you sell your name and your reputation on an account and then the large company behind you comes in and they say, well, we don't really care what you promise them we're going to increase the price. So we say you know, we're not going to increase prices on our customers and our agents can feel good about that. They don't have to worry about that call one day. We said you know, hey, merchants shouldn't have to pay an arm and a leg to work with a processor. So it's free, but really it's a rental or a lease.
Speaker 3:Our programs really are what we sell them to be and it doesn't mean that that program is for every merchant. Obviously, we're not going to give a free POS system to a merchant that doesn't do a certain amount of volume or have a certain size. We'll be the first ones to say that Of course it has to make business sense. But we do offer these programs so that our partners can compete and our merchants can be happy with us. Really, we took everything that I wanted as an agent and then we took the feedback of our sales partners and we just slowly started layering these things in one at a time. I'd probably say that if you're an agent of merchant services and you've had frustration with your current processor, we've probably built out things that allow you to not have that frustration. If you lost an account. We probably have ways to board that account for you, and that's really what it is to work with Paybrite and what we're all about.
Speaker 2:You sort of mentioned this earlier, but I want to go a little deeper. Where do you see the industry heading in the next, say, three to five years?
Speaker 3:Yeah, so I think there's going to be this continuation of integrations. For the last probably 10 years we've been hearing about this. I don't think it's happened as quickly as people expected. I know when I got into the business I was pretty much told that ISOs would be gone by now. I don't know if you heard that or not, but I certainly did.
Speaker 2:The death of the ISOs.
Speaker 3:everyone's heard of the death of the ISOs, exactly and I think we were told this was going to happen way quicker than 2025. And clearly, the death of the ISO has not occurred yet, and for my seat, I don't see it on the horizon tomorrow either. In fact, I think I actually see the opposite. I think ISOs are in a better position today than they were a couple years ago. I joke around and I actually think that there's an argument to be made that there might be this. I'm going to maybe say a new term, like the death of the payfac may actually be something that I'm seeing more because the ISOs have caught up a little bit Faster boarding, faster implementations, better application packets, more publicly available APIs through all of these gateway providers. So I think ISOs are positioned extremely well, at least the right ones. But provider. So I think ISOs are positioned extremely well, at least the right ones. But I do think us and other companies like us have to continue to invest in technology, in know-how, in gateway solutions, in APIs, and we can't keep our head in the sand and say we are not a tech company, we're a sales organization, because while we are sales and service, we have to start understanding that technology is part of that, and so I think these two things are getting blended together and so that's really been a big focus for us over the last.
Speaker 3:At this point about two and a half years or so and I think is the future for Payprite we're going to continue to invest in technology partnerships and relationships with software companies that we can then put in the hands of our agents.
Speaker 3:The technology companies love us because we go and we sell the heck out of their solutions. And Technology companies love us because we go and we sell the heck out of their solutions. And our agents love it because we bring them good quality solutions that they don't have to go out and source and then worry about losing later on when that quote-unquote agnostic system decides to go and poach all their merchants. We have professional level agreements with these companies so we're not nearly as worried about what happens at the agent level at our level. So I think that's what the future looks like over the next several years personally, and we're going to continue to double down in that arena. I think we just approved to double the size of our POS desk in the next six months. I mean we're hiring in that department. I think it's the future of this business.
Speaker 2:So maybe explain maybe just for me, but maybe also for the audience how you delineate between ISO and agent. I mean, I think I know the difference, but I'm just curious how you're seeing those different. So two-part question that. And we talked about death of the ISO. What about the agent world? How have you seen that change in the last couple of years and where is it heading?
Speaker 3:Yeah. So I think the term agent and ISO are often interchangeable. I don't know that there's a huge difference in the term and in a lot of ways they can get blurred right. So obviously a single seller who sells merchant services for a living is an agent, right. But what is if it's a two-person team? Right? A husband-wife or two best friends or child or whatever, is that now an ISO? I would say that's still probably an agent. So there's no exact threshold that makes something or someone an ISO versus an agent. But a lot of it comes down to, I think, some responsibility who's handling service, who's handling deployment, et cetera, et cetera. But in most of these conversations we're really referring to agents and the ISO is the company supporting them. So Paybrite has a little over 800 active sales partners. Whether we want to call them agents or ISOs, we have a little over 800 active sales partners. Majority of them are one to three person teams. It's one person, maybe two or three, but we have partners as large as 90 agents in one office. That's about our biggest. To us we call that an ISO office, but someone else could still call that an agent office. Terminology is often interchangeable and kind of overlaps. As for maybe the death of the agent or where that's going. I don't believe in that personally, but I do think there's a new wave of agents Agents that come from my time of selling or even before need to understand that things are changing.
Speaker 3:I think I got into merchant services at a really interesting time. When I got in, the industry was predominantly terminal-based, right, it was VX520s, vx510s, hypercoms etc. And in a lot of ways that was easy to sell. And then I was fortunate because a couple years after I got into the business we had the EMV shift and every business in America basically had to shift and change terminals. That's a great thing if you sell terminals, right. But it was still easy from an understanding perspective. I could go in and I didn't have to really understand too much about technology. But now the business is changing.
Speaker 3:If I sell merchant services, I have to understand that, yes, the money may be in the payments, but the sale is in the product, it's in the POS, it's in the booking software, it's in the text message marketing, it's in the solution that that merchant needs to run their business, integrated with payments. And so I didn't have to worry about any of that when I was selling. So that's good and bad. On the flip side, the margins are much higher because of that no-transcript. They talked about how much toast was going to cost, how much the hardware would cost and the software fees, how long it would take to install, what that process would look like, and they liked what they were being told. And so they sign up and they may not even know how much the merchant service account's going to be, and that's potentially where most of the money is. So it's exciting to me.
Speaker 3:I think margins for merchant service agents are going to continue to go up. We service agents are going to continue to go up. We've seen it. Our margins today in 2024-25 are nearly three times what they were when I was out selling 300% give or take. And that's not because merchants are being price gouged, it's because we're providing more value today than we used to provide, and so I think we continue to double down on value on products, on solutions. I used to sell it when I was in on value on products on solutions. You know I used to sell it when I was in the field only on savings, mr Merchant, I'll give you, you know, a rate of nothing. You know pretty much. I don't think you have to do that anymore, and so you know. I think some agents have to understand that the day of selling terminals is starting to become behind us. It's not gone yet. We still sell a lot of terminals, but you need to start learning technology and the more modern features. That's what I really think. If I'm an agent, I'd be focused on today.
Speaker 2:Right. Yeah, we used to have the offer meet or beat, right, If we can't meet or beat your price, we'll pay you $500. And that kind of race to the bottom. I think you're right. Those days are over and I love the way you position it the value-add products and what that's done to the margins. I think that makes a lot of sense. One more thing about the future, because we rarely have these kind of discussions without talking about AI and where that fits into things. How are you looking at AI? Are you doing anything unique in your business? Where do you see that playing into the industry?
Speaker 3:I think AI is cool. I think at our level, ai has a place in the future. We've started dabbling with it as of now. It's not really working in the way that we'd want, meaning it's just not there yet. We've dabbled, it hasn't been high enough quality to do what we want, but there is some cool things in theory, especially on the support and service side. So I think long term on the support and service side, we have the ability for AI to do things like all of our note-taking, and that's pretty cool. I mean, right now, a merchant calls in and our customer service team of course takes the call, but there's a ticket that comes along with it and ideally they're properly notating the account and notating the call and hopefully, depending on the nature of it, properly sending out communication on that call to the agent or the sales office associated with it. I think AI can automate all of that in time right when the person who took the call can move right on to the next call without having to do some of that.
Speaker 3:I think there's capabilities with AI in data validation and quality assurance, quality checks. So we board merchants. Every processor has human elements to that and room for human error. Probably all of our competitors have, similar to us, a quality check or a quality assurance process. I think a lot of that can be automated where you have AI going through your emails and going through your account setups and making sure that they're set up the way that they think they're supposed to be and if they're not, maybe it flags it to a human or, potentially, down the road, even fixes it. So I think, from a servicing perspective, companies on our boat are going to be able to get lean without sacrificing quality. In fact, it might increase quality. That's cool. It's not there yet, at least not what we've seen.
Speaker 3:I think it'll get there, though I think, from a sales perspective, you're going to see in time. As a consumer, as somebody with a cell phone, I hate this, but I think in time we're going to be getting solicitations through AI. I think you're going to get a call. It's going to be a computer that's talking to you you're not going to know, and it's going to be selling to you almost as effectively maybe arguably better than a human.
Speaker 3:That's scary to me, right? Because I think we already know the solicitation on our phones is bad. We all get dozens or hundreds of calls that we wish we could stop, and I think AI could accelerate that. Unfortunately, there are already some AI cold-calling bots out there, so that scares me as a consumer, as a person with a cell phone, but I do think from a sales perspective, you're going to see that start to happen in the future as well. But yeah, I think AI is here to stay, but from Haybright's experience with AI, it hasn't been quite there yet. If we've started to dabble with it, it hasn't been where I'd want it to really start implementing it quite yet.
Speaker 2:Yeah, that's a pretty common answer. I think a lot of people know it's here to stay, know there's a future for it. Some of their experiments have worked, some not quite there yet. So it's very common to hear that response. Well, let's change directions a little bit and talk about you. So maybe walk us through your professional journey, sort of what you were doing before, how you got to Paybright and discuss your professional journey.
Speaker 3:Yeah, I've told this story a number of times. I don't have much of a professional journey outside of Paybrite. I started Paybrite when I was 19 in college. It's all I've ever done. There's good and there's bad to that. I have no corporate America background. I have no what I'd call true professional experience. Right, if I looked at my resume when I started Paybrite as somebody interviewing me, I probably would have tossed it in the trash. It was hey. I went to high school. Pretty much, of course, from there I did end up going to college and so on, but really outside of Paybrite, the only thing I've ever done is worked in my parents' businesses. I've worked at a cash register at my dad's store. I helped with some of his real estate projects when I was in high school, but I have very minimal experience outside of PayPriority.
Speaker 3:I started selling merchant services like every other agent. I was out knocking on doors and I just happened to be maybe a little bit better at it than the average person. So I was successfully able to sell and build a portfolio for myself. I got started with the expectation or the hope of making $100 a month. That was my goal and at 19, with no bills, I thought I'd be rich if I was making $100. Got my first residual check and I was like, oh damn, this is kind of cool.
Speaker 3:And then from there I wanted to get a car, because I didn't have a car at the time. I needed a new car. I unfortunately crashed the prior one, so I wanted a car. And I remember thinking to myself well, the car is going to be $300 a month. Okay, well, at that time I was making like $30 an account. I was pricing an account. I literally had my first few sales where I told business owners, mr Business Owner, I don't know what I'm doing. Owners, mr Business Owner, I don't know what I'm doing. I was very honest. I don't know how to read a statement. I don't know what you're paying today, but I do know that if I price your account the following way, I'm only going to make $10 a month. I bet that is less than the company is making today. And you saved the difference.
Speaker 3:That was my pitch early on. I don't necessarily recommend it because you won't make any money, but that was actually how I pitched certain businesses and they were like okay, we'll go with you. I don't know why they trusted me with that, but it's a true story. So I signed business up. At the time I was making an average of like 30 bucks an account and I was like, all right, I only need to sign 10 and I'll be able to get a new car right. $300 a month for a car payment May have been even less, but I think signing accounts and then realized, okay, I started to learn what I was doing and that I could sign more and I didn't have to make $10 or $20 an account.
Speaker 3:I could make $40 or $50, which still is not a lot. But slowly but surely, I was able to provide more value. Know what I was talking about increase my margins, increase my portfolio, increase the average size of an account. I wasn't going after now the tiny little business. I was starting to get into bigger businesses and I just started building a portfolio and then, from there, I started to bring in a few other people. I started to build an agent base and then that got bigger and bigger, and then I needed to build our own support team, and then tech support, and then deployment. And before you know it, here we are, and I sometimes look back and I have no idea how we got here.
Speaker 2:Well, sounds like you're doing a good job.
Speaker 3:Yeah, it's been a fun journey. I've been very fortunate, that's for sure.
Speaker 2:Good, well, what are some things you're passionate about? Maybe one work-related passion and one personal passion.
Speaker 3:Yeah, you know, on the personal side of things, I'm very into staying active. I am somebody who gets very antsy when I sit around, so I have a lot of personal things I like to do. I've been training in jiu-jitsu for seven or eight years now. I really really enjoy that. It's a lot of fun. Unfortunately, I think if you have done jiu-jitsu you know what I mean when I say this. You probably spend half the time hurt because of it, but it's worth it. So I really enjoy jujitsu. I've done that for a number of years. I like to spend time in the gym and work out. I enjoy scuba diving. I'm certified as a rescue scuba diver. For anyone who's into diving, I would happily go diving with you almost pretty much anywhere. So definitely love to stay outdoors and stay active and go that route.
Speaker 3:From a business perspective, for me the most passionate part is to continue to improve the business. I am not the type of person who runs Paybrite saying how do we make more money next quarter or drive margins next year? To me there's a saying in real estate different philosophies. Some people believe that when you are in real estate maybe you have a building and it's empty. You got to go find the next tenant and then you, you know, you renovate that building to match what that tenant wants. And then there's others who I agree with that you build it and they'll come right. Let's make this the nicest building in town and a tenant's going to want it.
Speaker 3:And I kind of think paper rights, the second category. I want to make paper right the best home we can for our merchants, our agents, our sales partners, and they'll find their way to us, instead of saying we'll add support when we have the partner, because by that point it's usually too late, right? I mean, they're in the door, they try out and it's not what they're looking for, or it's not as pretty as you know it may be to go and move there today. It's not as pretty as it may be to go and move there today. So for me, I'm obsessed with the experience. I'm obsessed with making sure that, from a support service perspective, we're giving our merchants and our agents everything that they're looking for. So that's what this year is focused on. For sure it's. You know how do I get our phone times from 50 second holds to 45 and then 40? Like that sounds silly five seconds but that's actually what it keeps me up at night.
Speaker 2:Okay, okay, great. So final question someone comes to you. Maybe they're right out of college and they say, hey, we're interested in going into payments, building our career in payments or FinTech. Maybe there's someone you're interviewing for a job. What would you tell them they need to do to be successful in payments?
Speaker 3:One. You have to have grit. There's a saying I didn't coin this there's some folks in this industry that say that, especially if you're selling I think this is more geared towards people selling or building a business but that have said that this is the toughest five-figure job but the easiest six-figure job that you can find. I think there's truth to that and you need to accept that. I can't tell you how many people that I've seen anyone in this industry has that just give up. It's too hard early on and they can't get to what I'll call the promised land that is there. This is an amazing business, but you've got to have grit, you've got to have commitment and that also means you have to be in a position in a lot of cases to get there, and that could be financially difficult. You know, if you're going to become an agent in this industry and build a portfolio, you need to be able to go six months to a year with minimal to no income. Not everyone can do that.
Speaker 3:You know I was really fortunate that I was in college and I pretty much had no expenses, right. I mean, I had you know loans from you know school and the rest was on scholarship and I didn't have to really worry about bills, so everything was just at that point, supplemental income. But if you've got hefty bills mortgage, car payment etc it can be a really tough industry to get into. So grit an honest perspective. There are companies who sell this as a get-rich-quick scheme. It is not. This industry is not quick in most cases and it's hard work. But if you've got what it takes from that perspective and the right mindset, I would say go all in because it will almost certainly pay off.
Speaker 2:So, dustin, we've covered a lot of ground about you and the company and the industry as a whole. Is there anything else you'd like to add before we wrap up the show?
Speaker 3:No, I hope I provided some value to these listeners that are on here and I'm always happy to help anyone who's looking to get into the industry or has questions.
Speaker 2:Okay, well, dustin, thank you so much for being on the show. I know your time is very valuable, so thank you so much for being here.
Speaker 3:Of course. Thank you for having me.
Speaker 2: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.