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Leaders In Payments
Leaders In Payments
Brian Bailey, President of Clip | Episode 391
What happens when you combine decades of payment industry expertise with a mission to solve one of the most overlooked problems in business banking? Brian Bailey, President of Clip Money, joins us to reveal how his company is transforming the way businesses handle cash deposits.
Despite the rapid growth of digital payments, cash still accounts for nearly 30% of all in-store transactions. Yet for decades, businesses have been forced to operate within an antiquated system - physically carrying cash to bank branches during limited hours, using paper deposit slips, and lacking visibility into their deposit lifecycle. With a network of 7,000 deposit locations across North America, Clip Money offers a revolutionary alternative that saves businesses 40-60% on deposit costs while providing next-business-day credit.
Bailey walks us through Clip's innovative shared network model that includes smart safes in shopping malls, deposit-enabled ATMs in partnership with NCR Atleos, and over-the-counter services through Green Dot's retail network. This infrastructure allows businesses to make deposits on their schedule, closer to their locations, while gaining full digital transparency through Clip's software platform. The result is a win-win proposition - businesses improve cash flow and reduce costs, while financial institutions can move cash handling outside their branches.
Drawing from his extensive background at NCR and Cardtronics, Bailey shares valuable insights about payment infrastructure evolution, regulatory challenges for fintech innovators, and the future of shared payment networks.
Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Greg Myers:Hello everyone and welcome to the Leaders in Payments podcast. I'm your host, greg Myers, and today's special guest is Brian Bailey, the president and COO of Clip Money. So, brian, thank you so much for being on the show today. Thanks for having me, greg. So let's start out by 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.
Brian Bailey:Yeah, sounds good. Born and bred in Cleveland, Ohio, Midwestern guy at heart. From there I went to the University of Dayton to do my undergraduate work in business and there was a small tech company across the road from UD by the name of NCR, National Cash Register. So I had a chance to do a number of internships and co-ops with them and that's where I had my first job. So I had my first job with NCR, working in their financial services division as a salesperson, and from there I moved around the world with the company and had a chance to be in a few different countries and markets and learn about global financial services technology from different perspectives. And now I reside in Atlanta, Georgia.
Greg Myers:Okay, awesome. Well, let's dive in and talk about Clip Money. So tell the audience what Clip does.
Brian Bailey:Yeah, great. So Clip Money is the world's first North America's first shared network for business cash deposits. We allow any business who tenders in cash to make cash deposits into their bank account of choice. And this is a very novel idea, greg, because today, if you're a business, you're really tethered to your local bank branch in terms of where you're able to deposit cash. There are no shared networks for cash deposit like you have with ATMs or credit cards, and it's been a real big inconvenience for businesses to have to work within this business model for literally the last 50 years. There's been very little innovation here.
Brian Bailey:Our business is made up of a network of endpoint devices that allow businesses to deposit their cash In shopping malls. We have about 500 shopping malls with smart safes where businesses share that common device to make their cash deposits. We also have a network of ATMs in partnership with NCR Atleos 3,000 locations in pharmacies and convenience stores, again to make cash deposits into their bank account of choice. And recently we announced a partnership with Green Dot to leverage their over-the-counter network in retailer locations, again for the purpose of depositing cash. So take that network of 7,000 locations across North America.
Brian Bailey:We now create an exceptional convenience value proposition which is very close to the business. We also can typically save a business between 40% and 60% versus their standard way of depositing cash today, which we think is super important in today's retail world. So those are some of the elements, and then, finally, one thing we're very proud of is we digitize a paper-based transaction. So if you think about how businesses deposit money today, they literally use a paper deposit slip, believe it or not, when they go to the bank branch, and so we're digitizing that process, using our technology and our platform to allow a business to have greater transparency of where that deposit is in its lifecycle.
Greg Myers:Okay, okay, and how big is the company?
Brian Bailey:Yeah, so the company is made up of about 16 people globally across our base. We have developers in Europe, but we have over thousands of customers who deposit daily into our account. One of the things people don't realize about business transactions is that businesses like to deposit cash every day to get that liquidity into their bank account of choice. So we've been very fortunate. We're growing very quickly and off to a great start, okay.
Greg Myers:So how do you get those new customers? What's the go-to-market strategy?
Brian Bailey:So our go-to-market is direct to customers in shopping malls. It's obviously a very contained base of customers. We work with many of the top 250 largest retailers and shopping malls across the US and they're using our service on a regular and daily basis. As we look outside of the shopping mall, we believe financial institutions will be a wonderful path to market for us. If you think about this transaction banks are not super excited about becoming the best at processing cash within their bank branch. In fact, they're trying to move that transaction outside of the branch because of its inconvenience and cost to the bank. So we're now working with financial institutions who are looking to leverage the Clip network to more conveniently offer cash services, cash deposit services, to their customers as opposed to walking into the bank branch. So that's our go-to-market strategy, both direct and indirect, and we're very excited to be working with FIs today to bring that network to their customers.
Greg Myers:Okay, so you mentioned more the kind of the shopping mall that makes sense that all the businesses are kind of aggregated in one place. But I mean, is there any reason more of a standalone restaurant wouldn't be able to use the service?
Brian Bailey:Yeah. So one thing that we think is important is convenience and access to deposit services and if you're a quick serve restaurant or a restaurant outside of the bank branch, going to send a manager or an employee to that bank branch during business hours is very inconvenient. So we do believe the clip proposition, in particular with our new over-the-counter relationship with Green Dot, is going to become very effective. You could literally go into a leading market or big box retailer through the over-the-counter network and make that deposit at your time of choosing during the day. So we think our network is not just fit for shopping malls now but also Main Street to bring that convenience and cost-effectiveness to businesses outside of shopping malls as well to bring that convenience and cost-effectiveness to businesses outside of shopping malls as well.
Brian Bailey:Okay, okay, and I assume you're mainly in the US or North America. Yeah, we are. We actually were founded in Canada. Our network is up and running in Canada as well, across that marketplace and the US, and we've been very fortunate to work with a range of different businesses. We have customers today who are quick serve restaurants, who are specialty apparel. We work with large convenience store operators to facilitate their deposit services. So this problem today is very ubiquitous across all types of businesses. Any business that is walking to the bank branch which, believe it or not, is 90% of all businesses out there can utilize our service, and while cash is a declining cash instrument, as that cash transaction volume slowly declines, the cost of it goes up for the entire marketplace, and so we believe it's a solution that is required and needed for the market and really we're here at the right time to bring that cost down for all businesses.
Greg Myers:Okay, and it doesn't sound like you have a whole lot of competition, but there are current ways people are doing it and you've talked a little bit about that. But what would you say differentiates you the most in the market?
Brian Bailey:cash deposits. I talked a lot about the sort of inconvenience of that. One large US regional bank executive told us recently that they believe it costs them about $30 per deposit to process a single deposit inside the bank branch. When you talk about the cost of emptying a bag, counting the cash, counting it again, handing it off to an armored carrier. So that is a very acute problem they're trying to solve. For, however, clip's business model is very unique in that it's the first utility or shared network model in the industry and what that means is we are leveraging a common infrastructure. That infrastructure could be an ATM or a night safe or an over-the-counter network to spread the cost of those transactions and so other solutions in the marketplace today, namely bespoke SmartSafe, so a business can put a SmartSafe inside of their business. It's a very costly proposition. They have to pay for the capital, they have to pay for the regular servicing, and what we're doing at Clip is spreading that cost amongst many businesses, which invariably just drives down the transaction cost for every cash deposit.
Greg Myers:Okay, and one clarification question. You mentioned there are two devices. So there's a standalone that's deposit only, and then there's ATM. So is the ATM like a standard ATM, where you get money, like consumers get money out, or is it a different thing?
Brian Bailey:Yeah. So our clip drop box solution is a cashin only solution. We use drop bags to allow a business to declare a deposit. Put money in a bag, drop it in the box. Clip provides next business day credit to that business until we pick it up and service that cash inside the bag.
Brian Bailey:The ATM network works similarly in that you don't need a bag, you just put money directly into the ATM. It's a cash-accepting ATM, so what it's now able to do is we're able to have businesses in a community deposit cash into that device. We validate the funds. Once the money's deposited, we pay next business day, but the ATM operator NCR in this instance can then dispense that cash back out to the consumer. We're actually creating more of a closed cash community within these locations and NCR is able to obviously dispense as well as accept cash from businesses at that point in time. One important note on the ATM solution is that we're no longer using the debit card rails for that transaction, so we offer a cardless transaction. So if you think about how businesses deposit, it's typically not the owner of the business who owns the bank cards. It's very hard to manage bank cards giving it to an employee and sharing pins, so Clip provides a one-time use passcode that that employee can use to make a deposit on behalf of their business.
Greg Myers:Okay, okay. And is there software on the back end? Does the business have software that helps manage this?
Brian Bailey:Yes, I talked earlier about transparency and, for the first time, being able to understand where cash is all the way through its deposit lifecycle.
Brian Bailey:So the clip cashboard, as we like to call it pun on the word dashboard allows our users to see all of their stores, all of their users and employees who are signed up to use the system. So we have a very robust user management system. If you think about regulation, it's very important that we as a technology provider provide clarity of who's making deposits. So we have a registration system where employees can be added to our platform, but then we allow the business owner to track individual deposits for every store the minute they enter our devices and make their way through the crediting process until that money appears in their bank account next business day. We also offer robust tools like loss prevention. So if there's an issue where a store is not making a regular deposit every day per instructions of the corporate entity, we allow them the ability to go out and talk to that store manager and understand things. So this is part of that elevation of the digital experience that paper unfortunately just can't provide in bank branches today.
Greg Myers:Right, right, okay. Well, when you step back and look at the payments industry as a whole and you can certainly answer this question and kind of the view of what you guys do but where do you see the industry headed, say, in the next three to five years?
Brian Bailey:Yeah. So first of all, I come from a cash background. I've worked in the ATM industry and cash businesses basically my whole career, and do believe that cash is going to be here well past my retirement date, and so we're here solving really important problems for cash. Cash still makes up nearly 30% of all in-store payments, slightly behind debit and credit, so we do believe there's a great long future in cash. However, some things we see in our business that really affects the small business element of US businesses today is liquidity, and so one thing we've got our eye on is real-time payments. How can real-time payments and the ability to help businesses with their daily cash flow through the clip network? We think that's a really important thing we're watching. There's obviously some standardization going on in the RTP space that we're watching. The cost is coming down quite significantly, but we see an opportunity as a business makes a deposit. While next business day is important and an improvement, we think there's possibly even a better way to get cash back into the hands of business owners even quicker. So RTP is something that's really exciting for us and we're tracking that as we look at sort of the horizon past that, greg.
Brian Bailey:One thing that CLIP is really focused on is how do we leverage this concept of shared networks right? So shared networks, which we enjoy today across many things we do. We enjoy shared networks when we use our credit and debit cards, whether it's domestically or overseas. We enjoy shared networks when it comes to P2P payments through common tools like Zelle and Venmo, where multiple institutions are leveraging a common platform to connect P2P payments. We think that same concept is going to be coming to this world of business deposits and we're leading the charge here because nothing's been done in that and I think the same will hold true for emerging technologies like crypto and other payment technologies. So, if history proves the future, I think that's something we should all be focused on at a payments industry level. Okay.
Greg Myers:We rarely have a payments conversation without talking about AI. Are you guys using AI in your business in any way?
Brian Bailey:So we are using AI to an extent to help businesses in their reconciliation process. If you think about how a point of sale or a cash transaction credit transaction, debit transaction happens, one of the bigger burdens for our customers in the back office is how do I reconcile a store or a cash register or a specific payment type in a clean, simple, easy way, and so one thing we do at Clip is we provide direct integrations from our daily reporting system to an individual store and we allow a business to upload that real-time, also calling into question some of the insights around cash usage. One of the beauties of having a real-time platform, greg, is that we can see what's happening in a region, in a store, in a specific type of business, who serves different demographic areas, and so we're demographic types of consumers, and so it's a data rich. It's a data rich field which we're now starting to use to help our customers to better understand their business, because cash makes up such a huge part of their payment type.
Greg Myers:Yeah, that makes a lot of sense If 30% of their business is cash, knowing exactly where it is and the whole liquidity thing and just the knowledge and the data. So that makes a lot of sense.
Brian Bailey:As people do a little shopping, do a little commerce before their vacation, we see back to school. It's a real thing in retail August September timeframe. Different regions enter school at different times. So some of these national trends around cash usage is really important and of course, the holidays is a huge season for us as well as our retail partners. So it's trends that we think are important going forward and we've got a bird's eye view to it here at Clip Sure makes a lot of sense.
Greg Myers:Well, let's switch gears a little bit and talk about you. You mentioned a little bit about your early career, but maybe walk us through the rest of your career and how you ended up getting to Clip Money Sure.
Brian Bailey:Sure. So NCR was an amazing training ground for me. I had a chance to work in a number of fields sales, product management, marketing strategy and I also had a chance to live in a number of different regions I mentioned. I lived in Asia and Singapore back in the early 2000s and spent some time in Europe and Scotland throughout the mid-2000s. What that did was really create awareness for me about how different markets mature at different pace and speed. Asia back in the early 2000s was way ahead of the US and to the extent they still are in digital banking, mobile-based banking. At the time they were using SMS and some of those technologies to allow basic banking services. But what it opened up my eyes to was the way markets can leapfrog others by moving to new technologies quicker. So that was a huge foundational element, as well as the concept of P2P payments which was going on in Asia from the late 90s forward that we've just adopted here in the last decade. So those were all really foundational for me.
Brian Bailey:As we moved back to the US, I had a chance to get an experience outside of NCR at Cardtronics, and Cardtronics was the world's leader in independent deployment of ATMs, and so that was a huge learning experience relative to utility business models.
Brian Bailey:How do we use common infrastructure to service multiple stakeholders banks, consumers as well as networks to lower the cost of ATM transactions and I'm pretty sure everybody listening to this podcast hopefully has not paid a surcharge in many years because we now use these shared networks in a way to advantage consumers with lower costs for each transaction.
Brian Bailey:So Cartronics was a huge learning experience, but one thing that kept coming up in my travels as I talked to financial institutions around the world was how do we solve for this business customer walking into my bank branch? We solved consumers' ability to deposit checks through mobile RDC. We solved the ability for consumers to get cash virtually anywhere on the planet through our debit cards. We've digitized branches for most transactions, but there's still this customer walking in every day and dropping a bag of cash on my teller line, and so that's what led myself and Joe Arraj and a few of the Clip members to found Clip and really build this unique business model around business cash deposits. So that was the full circle of big company to medium-sized company to now startup, and we're having a ton of big company to medium-sized company to now startup and we're having a ton of fun in the marketplace, leveraging everything we've learned over the years. Okay, awesome.
Greg Myers:So what are some things you're passionate about? Maybe one work-related passion, one personal passion.
Brian Bailey:So I don't know if this is the right thing to be passionate about, but I am passionate about really solving or helping solve this challenge of regulation for new technologies. And so, while Clip is solving a cash-based problem that has been around for years, the hurdles and walls we've had to scale to get this business up and running have been significant because of the rules and regulations of how cash has been perceived and managed through the regulatory system and through this archaic way of tracking. Cash has been perceived and managed through the regulatory system and through sort of this archaic way of tracking cash within branches. So the example I always like to give is that we had a hard time just working through in our initial days making sure that we're compliant with all basic rules and regs around CTRs and unusual activity. When you look at how banks today take cash over the counter, they're doing it through a paper deposit slip, which couldn't be the most archaic way of tracking a transaction in the world. However, we've digitized all that. We know who the conductor is, we know what the business is, we've done all the requisite KYB checks through modern KYB tools, and so we've actually elevated the whole aspect of compliance that we think should be embraced in the industry and not sort of criticized, and so I think this is something that we're really excited about over the next few years about how we can work with regulators, how we can move quicker to market with these new solutions without sort of all the hurdles we've been straddled with in terms of it's new and so it must be wrong, and so that's an area that I'm super passionate about within the workplace that we work on every day here at Cliff.
Brian Bailey:From a personal perspective, I'm a huge sports fan, so I've grown up big Cleveland sports fan go Cavs. But one thing I also love is coaching youth sports. In today's world of travel, aau sports, where everybody's going to be in the NBA or Major League Baseball, I think there's some beauty in recreational sports as well. So I coach a rec basketball league with my two sons every winter and just love seeing where a team starts and where it ends throughout the year and how we can take kids having fun playing basketball outside of their Xbox and really develop them as a unit. So that's something I enjoy doing and for the next few years we'll enjoy that time with my kids.
Greg Myers:Nice, Nice. So Cleveland, like all sports, in Cleveland I mean the Indian, like the whole thing.
Brian Bailey:Fortunately yes, I'm a beleaguered Cleveland sports fan We'll keep the Browns on the side for a minute, but the Cavs will give us a good playoff run, and maybe the Guardians will as well. Okay.
Greg Myers:Yeah, so I grew up in Pittsburgh so kind of the same thing, right. We had all the major sports there and so was a big fan of all those. Now, of course, being in Dallas, there's the whole cowboy influence, so we won't get into all that.
Brian Bailey:I saw the smile on your face when I mentioned Cleveland.
Greg Myers:Yeah, definitely was that kind of one city in all the sports and definitely a huge sports fan as well. So, Brian, if someone came to you maybe they just graduated from college and you've been in this industry for a while they said, hey, I want to build my career in payments or fintech. What kind of advice would you give them to be successful?
Brian Bailey:One thing I learned sort of later on in my career, and both at Cartronics and now at ClipMoney, is the importance of understanding unit economics of how a payment transaction works.
Brian Bailey:I grew up sort of in the solution space, right Marketing and selling technology to end users like banks, and one thing I didn't appreciate is sort of the complexity and beauty of the unit economics of a payment transaction and I'll just use a debit or credit transaction You've got acquirers and issuers and the network and the consumer and how value is created for all those constituents is really important, and I think that holds true not just for sort of legacy payment methods and instruments but also future. So in the world of crypto, as we start to really understand how crypto can become a vibrant payment method or even business deposits, now really understanding the unit economics of how a transaction and the funds and the fee flows behind it, I think it's a really important thing early in a career to become confident and comfortable with Okay, well, brian, we've talked about, obviously, you and your background and the company and the industry as a whole.
Greg Myers:Is there anything else you'd like to add before we wrap up the show?
Brian Bailey:No, I just want to thank you for having me. Hopefully we've brought cash to the forefront and the importance of what it is for businesses, and we're just happy in this sort of economic uncertain times to be helping businesses to lower their cost through a disruptive way of making cash deposits. So, Greg, thanks for having me. Really really enjoyed the time, yeah absolutely so, Brian.
Greg Myers:Thank you again for being on the show. I know your time is very valuable, so again thanks for being here.
Brian Bailey:Thank you.
Greg Myers:And to all your 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.