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Leaders In Payments
Leaders In Payments
Matt Brennan, CEO of Spire | Episode 404
What happens when you combine the merchant benefits of pay-by-bank transactions with the consumer rewards typically reserved for credit cards? Matt Brennan, CEO of Spire, reveals how their groundbreaking approach is transforming everyday payments across America.
Brennan walks us through Spire's innovative branded payment solution that powers merchant-specific programs like Shell's "S-Pay." By partnering with Discover Network, Spire issues 16-digit PANs linked to consumers' bank accounts - creating a hybrid payment that works on existing terminals while settling via ACH. This elegant solution eliminates the traditional hurdles that have limited pay-by-bank adoption at physical points of sale.
The beauty of Spire's approach lies in its true win-win nature: merchants dramatically reduce processing costs while offering substantial rewards (like 15-20¢ off per gallon or 5% store discounts), and consumers enjoy immediate benefits without accumulating credit card debt. This value proposition has fueled remarkable growth, with Spire now accepted at 55,000 locations representing 65% of branded fuel retailers nationwide.
With 750,000 bank accounts linked and transaction volumes growing 200% in just seven months, Spire is clearly tapping into unmet consumer needs. Brennan identifies two key adopter groups: tech-savvy younger consumers comfortable with alternative payment methods, and financially-conscious "savvy savers" seeking rewards without additional debt. As consumer debt concerns continue to rise and open banking makes account linking increasingly mainstream, Spire is positioned at the intersection of major financial trends.
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, matt Brennan, the CEO of Spire. So, matt, welcome to the show.
Speaker 3:Thanks, greg, and thanks for having me. I think it's going to be great.
Speaker 2:Yeah, absolutely Looking forward to it. So, if you don't mind, before we dive into Spire, tell the audience a little bit about yourself, maybe where you're from, where you grew up, where you went to school, a few things like that.
Speaker 3:I grew up in Sydney, australia, born and bred. Fantastic place.
Speaker 3:I think that you know from a school perspective and it's probably not going to be very relevant as to you know where I went, but what I will say is that, you know, my whole kind of journey from a career perspective has been founded on what I think is really part of the culture of Australia, which is, you know, we're a small little country right at the bottom of the planet and you just have to kind of to be seen and to be relevant. You've got to craft your career, and so a lot of what I've done, I think, is really rounded off with my career.
Speaker 2:Okay, and we'll dive into that in a few minutes, but let's talk about Spire first.
Speaker 3:So tell the audience what you do. Yeah, so Spire is a branded pay-by-bank solution that really has made a significant impact on the way in which we're accepted at the point of sale. And so, I think you know, traditionally pay-by-bank has, you know, had some great applications, but it's always been challenging to accept this type of payment at the point of sale, and so we've been able to bring two things together the real advantage of pay by bank, which is dramatically kind of reducing the cost of processing, being able to brand it for the merchant, which then allows them to reinvest in driving greater loyalty, in driving greater loyalty, and what we've seen is that also has started to grow meaningful basket size and repeat visits, which is really the key metric that I think most merchants are driving just general growth by.
Speaker 2:So that's really what we are. Okay, and who are your typical customers?
Speaker 3:Well, we have started our journey in oil and gas and fuel. We definitely focus on everyday spend as a category. I think it fits really nicely. I mean, so we have about 65% of branded fuel today, so 55,000 locations across the United States take our payment method and in most cases, if you're going to fill up your gas tank, there's probably an option for you to use our payment type.
Speaker 2:Okay, and are you mostly in the US or global? What's your footprint?
Speaker 3:We are 100% in the US and as we talk a little bit about how we differentiate ourselves in the marketplace, you'll understand why. But we are very focused on the US today. At this point in time, we feel like this market for us is big enough where, if we provide the service to the merchant and to the consumer alike, this market itself is a real strong one for us.
Speaker 2:Yeah, and how did you sort of overcome like the chicken and the egg, right, you've got a new payment method, so you need merchants but you need consumers, right? How did you overcome that challenge?
Speaker 3:Well, I think that we've been around for a while.
Speaker 3:That's kind of the starting point.
Speaker 3:We are Spire today, but we used to be actually BIM Networks, and a lot of people probably resonate with that brand more, and that's where we accumulated, I think, the first phase of our merchant base, and so we've been in the space for a little bit of time, and so through that journey, we started to see very clearly that there was limitations as to how far this payment method could actually go, and part of that was because the consumer was not adopting it at a fast enough rate, because there was a lot of friction in the payment.
Speaker 3:We were reinventing a way to pay, and I don't think the consumer really wants to change the way to pay. So we saw that, and I don't think the consumer really wants to change the way to pay. So we saw that. And so we were really thinking in order for this to be truly a growth category at the point of sale for retailers, merchants, we had to rethink a better way to do it, and that's really what we are now in our next phase. And so, as we build a new product and we've had this partnership that we've now cemented with Discover we decided to rebrand ourselves because we are very different in the way we execute, but we're not different in what the really underlying product is at its foundation, which is its pay-by-bank.
Speaker 2:And you talked about it being a branded solution. So what do you mean by that?
Speaker 3:Okay. So if you take one of our merchants, for example, they will actually go to their consumer base and they've probably called it something like S-Pay, right? S-pay is Shell's branded paper bank solution and so it's a branded solution. We basically just power the payment type and so you would go and enroll in that S-Pay product. They're giving you a good incentive to do it 15, 20 cents off a gallon. You might get 5% off in the C-Store If you actually sign up and you link your bank account to the payment type and then, as you use that payment type, you get those extra incentives and extra rewards whenever you go and fill up a tank, or whether you go to the grocery store or you go and fill up a tank, or whether you go to the grocery store or you go into the convenience store and you may buy a few items, and so that's why it's branded and we keep it branded. We are a closed loop solution, so we keep it branded so that the merchant can use that to leverage the relationship with the customer.
Speaker 2:Okay, makes a lot of sense. So you mentioned Discover. Maybe talk a little bit about that partnership, a little bit about how the sausage is made.
Speaker 3:Yeah, it's a fundamental part of kind of the reinvention, I think, of our product and really the space in general. So a couple of years ago we, as I said before, we'd got to that point where we just weren't sure how this was going to be increasingly adopted, and we knew that the point of sale acceptance was important. And I'll just take one step back. Traditionally, in order to be able to accept this payment, merchants had to do some very heavy integration changes to their points of sale and every point of sale is different, so you can't just do it once.
Speaker 3:Everybody had to do it On the other side of it. They also from the settlement side of things. They also had to do a very big change to the settlement and reconciliation process. Because if you take $12.50 out of my account and I put it directly into Shell's account, what's it for? Where was the purchase made? How do I reconcile that? That was a big lift, okay, so just park that for a moment.
Speaker 3:So we basically started to work on a new product within our platform that allowed us to be able to send all of the payment instructions down the credit card rails. So we were mirroring a credit card transaction, but for the purpose of settling the transaction, we were doing an ACH debit out of the consumer's bank account. That's the product we actually created, and then we shopped it and Discover agreed to actually create a product on the other side that allowed us to do zero interchange for the transaction. So that's the fundamental starting point of the relationship. How does the sausage kind of work?
Speaker 3:Well, this is where it gets really interesting. So when you link your bank account to our platform, at that point we issue you a 16-digit Discover PAN. So we basically give you a credit card, a credit card PIN, and we do that in a bin range, that is, for the merchant. That's how we keep it closed loop. So we give you a card, we give you basically a credit card, although to fulfil the settlement, we're going to go and debit that out of your bank account that you linked, which means now that card is accepted at 99% of merchants' points of sale all across the United States and you don't have to do a thing to your point of sale to accept it, because you know how the pan is presented and, as a result, that starts the whole journey of the transaction. So we kind of feel like we had to do two things we had to come up with the idea, we had to go and build it and then we had to find a great partner, which is what Discover has been.
Speaker 2:Okay, and the merchants also get to keep the loyalty program, the rewards that they provide. That doesn't change with this right.
Speaker 3:No, it's an integral part of the whole process, right? Because that's the part where you enroll, right? You enroll through that loyalty program and then you're getting rewarded for actually using the payment type. So we've got to use the loyalty program for the whole kind of ecosystem to work. Look, at the end of the day, there's about 60% of Americans that love rewards, but they don't necessarily have or want to get any more credit and they certainly don't want to revolve credit for everyday spend.
Speaker 3:Now, who wants to pay off your tank of gas for the next four months, right? So the sweet spot was always can you give me a responsible payment method, pay by bank maybe you could call it debit but at the same time, can you reward me for it? And can you reward me on the spot? Give me $0.15 off a gallon. Give me buy one, get one free. Give me 5% cash back. They're the things that we've been able to bring together right at the point of sale and, as I said, the merchant doesn't have to do a lot of lift to implement it and how do you get more business?
Speaker 2:Do you have a direct sales team? Do you have partnership channels? How do you get more business?
Speaker 3:Yeah, well, both you know we have 750,000 consumers today that have linked their bank account. We've doubled that in the last seven months, so we're on a real kind of growth tear. In the same period of time, we've grown our transaction volume by over 200%. So we're starting to now get a lot more usage and participation on our platform in general. But how do we actually drive real growth?
Speaker 3:Well, merchants new merchants to the platform bring to us new consumers, and so we've got a direct sales team that starts by going out in a B2B sale and works with the merchant on having this part of their payment portfolio. We also have been working with partners that in general, offer merchant services, and so they will have great relationship with merchants. They help us as well. And then the third, which is in that bucket it's kind of the third area. The relationship we have with Discover also helps that, because Discover's got great relationships. So, all in all, the phase we're in right now is sign merchants up. They will bring more participating consumers and, at the end of the day, it allows us to broaden the actual, the pool of consumers and the different categories of everyday spend.
Speaker 2:And what would you say, differentiates Spire from your competitors out there?
Speaker 3:We have a capability to have acceptance at every point of sale and it's the way in which everybody's used to it. You know, we can give you a physical chip and pin card. We're the only ones that can do that in the market. We're moving very, very rapidly towards tokenizing that into digital wallets. We're the only ones that can do that, and the only ones that can do that. And the only ones we can do that is because when you reverse back up, we issue a 16-digit PAN and that's the way terminals accept payment.
Speaker 3:That is the number one differentiator and then kind of everything goes from there. So you know we're a guaranteed product. We guarantee 98.5% of transactions Industry number one in the industry by far. Our risk engine and our risk capabilities have allowed us to be able to take 90% of people who actually want to enroll. We accept those enrollments. It's number one in the industry as well. So all of those things that we start to build as differentiators, they all really start at the relationship with Discover and by using the Discover network to complete the transaction is really everything.
Speaker 2:Well, when you step back and look at the payments industry as a whole, sort of where do you see it headed in the next maybe three to five years?
Speaker 3:I think alternate payments are going to be one of the most rapidly adopted categories in general and we sit in that category. We're an alternate payment method If you take debit and credit being the traditional ones. We're seeing incredible uptake and also just curiosity from consumers about different ways to pay, and that can come from larger tech companies, the Venmos, the PayPals there's already an established group that have been agitating in this space. We become part of that agitation because what we do is we offer another way to pay, right, coming out of your bank account. You're going to get rewarded for it. That's a different way to pay, especially when it's branded with the merchant's brand. So alternate payment types, in my mind, is going to be incredibly fast-growing and then, along those lines, open banking has really given people the peace of mind to be able to link their bank account directly to those alternate payment types.
Speaker 3:I think we've seen an incredible amount of success from the likes of Plaid and Validify in being able to really give people that peace of mind. You know it's interesting that our payment method is more secure than even using your debit card, because we don't present all of the details of your bank account on the card. We shield you from that. But besides that, that trust is building. So open banking is driving the ability to link a bank account.
Speaker 3:As we know, the revolving credit numbers that we've got in the United States is growing so rapidly that credit is going to become less and less available to people. They're going to have to use different payment methods in order to do that. The third piece is that now that you're thinking about alternate payment types and you're prepared to link it to your bank account in this situation but what if it was a different type of currency? What if it was a crypto or it was some kind of digital currency in the future, then that whole starting that we're going through the starting pieces allow us to be incredibly flexible down the road, because you've established the two major pieces the trust and the curiosity. Now you've got to just deliver on what else is possible and that's what's going to come down the line.
Speaker 2:Okay, and are you seeing a certain demographic from the consumer side adopt this more than others, or is it pretty much across the board?
Speaker 3:It's across the board, but I will say there's two kind of buckets that I think we really see some, I would say, more motivation tech-savvy, credit-averse group that has, in some instances, fully grown up with the likes of the PayPals and the Venmos and the Zells.
Speaker 3:There's a whole group of sub-25-year-old or maybe even sub-30-year-olds that has only ever exchanged money with their friends through Zell or through Venmo or through Apple Cash or whatever right, they just instantly look for creative ways and alternate ways to pay. So that's one group and we feel like we're really starting to build a great product for them. The other group is, as I mentioned before, 60% of Americans are really at their debt stress limits and so that group, which we would kind of say is kind of the savvy buyer or the savvy saver, right, they're looking for ways to get out of that vicious cycle but still get those kind of rewards, kind of coupon clippers, that kind of group. They're the two at the moment that we really see strong take-up. We see less strong take-up with the likes of people that have credit, get rewards but pay off their debt every month. They're not necessarily looking for something, this alternative yet. So hopefully that answers the question.
Speaker 2:Yeah, and it's less about age or demographics. It's more about to your point kind of motivation and thought process, as opposed to you know, 20-year-olds do this and 40-year-olds do this, right, and it's something it's a trap we all fall into is saying that you know all age groups act the same. I think you're right in thinking of it, as you know what's the motivation, why do they want to do it and why do they want to do it Exactly?
Speaker 3:exactly.
Speaker 3:And we want to just continue to motivate them to do it, and one of the great motivators, as I said before, is loyalty. It's a great motivator for the merchant and it actually becomes even a greater motivator for the consumer, and so when you get that right, it's a win-win. That's what I'm so excited about with what we've done in the last 18 months, because this is really the unleashing of the possibilities around Paybar Bank at the point of sale. It had so many limitations prior to us getting our technology and Discover's relationship just right, and I'm excited about it because for the first time in a long time, it's a product that's really good for the consumer and it's really good for the merchant, and sometimes in payments, one of those constituents loses. This is not the case, and that's what motivates me, because I know that we are actually providing a win for both, and now the two constituents the merchant and the consumer are sharing the rewards together, so it's a really good place, I think, for us to jump off into making some change.
Speaker 2:Well, let's switch gears a little bit and talk about you, maybe walk us through your background a little bit and how you got to Spire.
Speaker 3:Yeah, well, as I said before, born and raised in Sydney, Australia, and there was a couple of starting points in my career I actually started at the Central Bank of Australia. Funnily enough, I was thinking of becoming a long-term central banker, but technology kind of was just starting to get introduced into the whole space. And, greg, I'm sure you remember those days when computers started popping up everywhere. It really changed the trajectory of my career. And when I left the Reserve Bank I had an opportunity to decide between going to a technology company. One was Dell, who at the time was just on fire, and the other one was Apple, which was not on fire. It's hard to remember, but there was times when Apple was having a hard time selling an iPod. Anyway, those days were gone pretty quickly. I don't know why. I decided to go and work at Apple and it was the best decision of my life for so many reasons Learned a tremendous amount in business, learned a tremendous amount around culture and obviously was very, very fortunate to go through three pretty big phases. Obviously, as I said before, ipod hit pay dirt. We thought that was quantum change to the company. And then, of course, iphone came out. I was lucky enough to be asked to launch iPhone in Asia, everywhere except Japan, japan. We had an exclusive relationship with SoftBank so there was no work to be done there, and so I went and launched it in every country through Asia. And then, as we got to the end of that cycle, I was asked to come to the US and put together like a next generation growth plan for the company, and one of those five big bets that the company made turned out to be the one that I had suggested, and so they quickly asked me to come over and run that initiative in the United States. And so I packed up the family, moved to the US and you know I often joke. You know it was not hard, because sometimes you had to squint to see the difference between California and Sydney. But that got me to the US.
Speaker 3:And then, obviously, the 16 years at Apple was just part of that whole journey. As I started to get to towards the end of that period of my career. Then I spent a little bit of time consulting Google and others on different types of growth initiatives, go-to-market initiatives. And then I was reached out by a colleague of mine at Accenture who was alongside me in the Apple Accenture deal that we did a number of years before that and we started to work together and one of the projects that we were brought into was actually Spire. And so we were brought in because there was a new investment round put in place in the beginning of 2024.
Speaker 3:And we were helping that investment team in a transition of leadership and by the time we got to the summer of 2024, the board had reached out to me and asked me if I would come and run the company. And that was just due to, I think, a lot of the change of direction, of the messaging and the relationships we were building and where this company could go. And so that's how I got to Spire. I'm not deeply trenched in payments although I'm drinking from the fire hose, that's for sure but definitely a lot of experience in technology and go-to-market and that's really where the company is right now. And it's definitely helped me also with relationships that I had, you know, with Google and with Apple, to help us get into kind of the next phase which is into the digital wallets.
Speaker 2:Okay, okay, and what are some things you're passionate about? Maybe one work-related passion and one personal passion.
Speaker 3:Well, I kind of alluded to this a little bit ago and I think this is again part of what I really loved and admired about Tom and Apple. I'm really passionate about offering win-win situations and when we've got this merchant-consumer win-win situation, I'm really passionate about that. It's actually driving, I would say, the next generation of our culture here at spire. So I'm very, very passionate about always providing the best possible outcomes for the consumer and for us, the customer being the merchant. On the personal side, I could be boring and say you know, I love golf, but I think that the passion I have I'm a huge Green Bay Packers fan have been since back in the days when I was in Australia. It's hard not to have fallen in love with Brett Favre, and so my kids are the same and we go to Lambeau Field once a year and we love Sundays in the winter where we can, you know, watch a great Packers game.
Speaker 2:So Australia, California, Green Bay. I'm not drawing the lines, but that's cool.
Speaker 3:Well, I'm inching my way to the East Coast slowly.
Speaker 2:Gotcha, gotcha. Okay. Well, if someone came to you and maybe they're just out of college, they're looking at sort of the payments or fintech or even broader kind of technology space and they want to build a career there, and they said, hey, matt, what do you suggest I do? What advice would you give me to help me be successful in my career in payments, in fintech, in technology? What would you tell them to do?
Speaker 3:You know, just be a constant learner, just learn, learn, learn. You know, I could say the basic stuff about work ethic and stuff like that. You'd hope that somebody who's got aspirations of building a career has already got that, but truly I think it's about kind of learning. What are all the intricacies and the nuances, whether it's technology or whether it's payments? You know, I remember, as I was kind of getting into different phases, I was curious about computers because they were the new thing you know. Then I was curious about, you know, mobility, when we bring in the iPhone. And now you should be curious about AI, because AI is the thing that actually is going to be the next wave. And if you look at those three situations, right, computers change things, mobility change things. Ai is going to change things. Be curious, be a learner and, as you do that, start to form your own opinion of what might be next and ground it in, always servicing whoever it is that's going to buy your products.
Speaker 1:It goes back to that passion right.
Speaker 3:My passion is servicing those who are going to buy our products. So be curious, be a learner, be a thinker and always sort of think about what's good for the people that you're selling to.
Speaker 2:I think that's great advice. So, matt, we've covered a lot of ground, obviously, about you, about the company, about the industry. Is there anything else you'd like to cover before we wrap up the show?
Speaker 3:Well, the only thing I would say is that if you don't know much about Spire, and if you don't know much about Spire and if you don't know much about how we're changing pay-by-bank, be curious yourself. Look us up, look it up. I think we're going to be the first of many, and so hopefully we will become part of the next wave of an alternate payment type that I think that everybody's been looking for success around for a long time. So if you want to be curious, look us up.
Speaker 2:Okay Well, matt, thank you so much for being on the show today. I know your time is very valuable, so thank you so much for being here. Thanks, greg, I appreciate the time, 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. 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.