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Leaders In Payments
Leaders In Payments
Special Series: Focus. Build. Win. with Jim Oberman, CEO of Payroc | Episode 439
If you’ve ever tried to pivot a payments company from vendor sprawl to a product-led core, you know the hardest part isn’t the code - it’s the conviction. Greg Myers sits down with Payroc CEO Jim Oberman in the first episode in our three-part series titled Focus. Build. Win. to trace the inflection point that moved the company from relying on third parties to building and owning the core stack merchants now expect. We dig into the strategy behind choosing focus over FOMO, why omni and embedded experiences changed the rules, and how a disciplined product roadmap turned into a growth engine for partners and merchants alike.
Jim opens the playbook on capital allocation and scale: a two-pronged approach that combined careful acquisitions of mature distribution with targeted technology buys to accelerate the roadmap and extend globally. We talk about integrating WorldNet and BlueSnap, rebranding decisively, and the operating principle that all new business must board on the core platform. The result is a clear throughline from M&A to product to outcomes, including core-platform growth near 37% year over year while legacy assets provide the cash to fund tomorrow.
Execution is where it gets real. Jim shares how Payroc built a weekly cross-functional steering committee to avoid politics, return every debate to customer impact, and keep teams from chasing shiny objects. We explore the shift to vertical focus - unattended payments like vending, laundry, car wash, parking, and kiosks - where contactless demand is compounding. Data sits at the center, with a unified lake that reconciles to financials, enabling honest prioritization and faster, clearer decisions.
We close with lessons learned and what’s next: helping founder teams let go without losing their spark, centralizing support even if it’s expensive, and keeping a “never again” list to avoid unwinnable arenas. The next chapter is about sales execution and taking global capabilities to mid-market clients that are ready to expand.
Welcome to Focus Build Win, a special three-part series that dives into how PayRock turned a focused core product strategy into a growth engine. Across three conversations, we'll explore how the company is leveraging acquisitions, building products that scale, and aligning sales, recruiting, and partner teams to win.
SPEAKER_01:Hello, everyone, and welcome to the Leaders in Payments Podcast. I'm your host, Greg Myers. This episode is part of our three-part series titled Focus Build Win and is being brought to you by Payrock. Today I'm honored to have as our special guest, Jim Oberman, the CEO of Payrock. Jim is going to be sharing the company story and why PayRock bet on a focused, homegrown core technology and product stack, how he reallocated capital and reshaped the organization, and what results and trade-offs followed. So, Jim, I'm really looking forward to the conversation and thank you so much for being here and being on the show today.
SPEAKER_02:Yeah, thanks, Greg. It's uh it's my pleasure and our honor to be able to do this with you.
SPEAKER_01:So, Jim, I'd like to start by setting the stage. Payrock wasn't always known as a product company, but you made a very deliberate choice to change that. So, to kick things off, what was the single inflection point that convinced you Payrock had to become a more product-driven company rather than continuing to rely on third-party vendors?
SPEAKER_03:Yeah, the number one thing that really initiated our enthusiasm to do what we've been doing the last eight or nine years is we saw what was happening in the market. And very simply put, businesses were developing a preference to have the payment experience with their customers be quick and easy, be what our market, our industry calls omni, which means a customer could pay anywhere, any place, anytime, in the store, at the curb, online, at the counter, at the table. And as we saw this preference of businesses, even what whether it be mom and pop on Main Street or very sophisticated large enterprise merchants, they're all generally looking for one thing to make sure that the experience for their customer to be able to pay for whatever they're selling is quick and easy. And so what began to happen is the large processors in the United States and in the world, obviously, for decades, were fantastic at delivering products and capabilities into the hands of sales partners and ISOs agents, banks, direct salespeople that were more than adequate for businesses. But then back in, you know, in the in the 90s, this all began to change slowly. 2000 came along, 2010, that you know, this was a decade long, and as the internet is expanding, the use of it, digital interaction and communication, social media, the explosion. So the number one thing that precipitated is businesses preferred their payment experience, generally, all of the things being equal, be embedded in a software, in their other software experience they were given their customer. The pivot to product was we began to focus partnering with those third parties where parity was consistent with what was being delivered, but we began to build product capabilities ourselves, proprietary, so we could deliver an experience to the business owner that they were expecting. And not only to work, because you know, especially the United States market we serve the most, and then of course we're in Puerto Rico, as people have maybe learned about PayRock. There's a lot of small and medium-sized businesses in the market that even in that realm, they don't necessarily want their payment experience embedded in some software, but they certainly want a modern, modern set of flexibility going in there. So we began to focus our dollars doing acquisitions and pouring money into technology and product that was going to drive the experience that the merchant business was having with their customer. And in the case of card payments, the cardholder.
SPEAKER_01:Okay. Well, I'm sure that decision didn't come lightly. I mean, you're shifting a company's direction at that scale really takes conviction and clarity, especially when it comes to capital allocation. So I'm sure there's many leaders that are hesitant to redirect capital away from known revenue streams, and I'm sure you had to do that. But what gave you the conviction to reallocate dollars into building out those core products you're talking about? And how did you frame that bet internally with the team internally and the board?
SPEAKER_03:Great question. We did two things. Number one, payments is a business of scale. And if you're going to be competitive, you have to have scale. So we did a two-pronged approach with allocating our capital. First thing we did is we initially in 16 partnered with a major financial institution to bring in some equity capital. And then in 2019, we recapitalized with Parthenon, excellent private equity firm, really knows payments. We wanted to make sure we found a capital partner that was committed to providing us capital alongside us to do acquisitions to build scale and very strategic, very carefully done, and also then take that cash flow and plow it back into technology and product as we're bringing on this scaled platform. And so the allocation of our capital was really two-pronged. Part of it was going towards doing acquisitions. And this ties back to your first question. The acquisitions were carefully done to where we were acquiring distribution that was beginning to struggle in the market to compete. And this was more traditional in distribution, being ISOs, agents, financial institutions, referral partners. These are channels, Greg, that for decades were serving well with the products that they were given, small, medium-sized, and even larger businesses very well. But they were these companies that were becoming very mature and were generating a lot of cash flow were finding it difficult to compete. You know, if their total addressable market was this big, it's shrinking, shrinking, shrinking every year. And also, these were companies that were maturing that the founders were thinking, hmm, maybe I could take some chips off the table partially and put myself in a better position to compete for the future and be part of something stronger, bigger, better, more market relevant. So we began to carefully plot along, and our acquisitions are all documented. You know, there we've been very transparent about everything we've done and how careful we've been. So we were finding distribution that was going to fit with the product and tech we were building and going to make them better. And then we also did some acquisitions of technology and product that would accelerate our roadmap, Greg. So not only were we building product and tech organically and allocating this cash flow we were buying into that, we were also looking very carefully for technology acquisitions. For example, I can't remember what year it was, I think it was 22. We acquired a wonderful international payment gateway called WorldNet that today is the hub of our core international gateway. So that's a good example of a payment gateway. And you know, there's tons of them out there, Greg, but we didn't just acquire a gateway, we acquired a set of technology and experience that we began to wrap everything around kind of the hub of that technology platform.
SPEAKER_01:Okay. Well, any kind of transformation like this brings trade-offs. So what revenue or relationships did you knowingly put at risk? And sort of in hindsight, how do you weigh those costs against the results?
SPEAKER_03:Yeah, no, great question. Anytime you do, golly, I think we've done 35 acquisitions since 2016. Time sure goes by fast. And they accelerated. And the trade-offs we found ourselves getting into, every one of these companies we bought did something really, really, really well that got them there, but wasn't going to work going forward. That's one of the reasons they wanted to join us. They were realizing that which they built wasn't competitive enough, and the amount of capital they would have needed to run a loan was too much. So we found ourselves, and we still have them today, with pockets of, you know, little pieces of portfolios or product sets that we still have merchants and customers that are relying on it, that we continue to maintain because it's good stuff, it's relevant, it's not going to serve our future well, but it's serving us well today. So the toughest part about this journey is deciding when do you sunset some of these, I'm going to call them older or well-established, but technology and product sets that are good for the moment and were good, but they're not what businesses are looking for going forward. So we're continually doing that balancing act. And when you're doing that, it impacts your relationship with the partners you have, because the partners you have that are giving you business, right, they have some of that old business in their portfolio. And it's a juggling act. So, and look, everybody's doing it. Whether in Payrock's grown to be a very large player, we're in that upper tier of the market now. But um, whether it's companies much larger than us, you know, we call them the big super tankers and we love them, they're struggling with the same thing I just described. And our peers that we compete against in our niche, everybody's struggling with that same set of uh dynamics of transitioning from old, proven technology and product sets to the new forward-looking things that disruptors are doing so, so well in the marketplace.
SPEAKER_01:Once the why was clear, the real challenge, I would imagine, became execution. I mean, it always is, right? So making that pivot from wide vendor model to a focused core stack isn't just about the strategy, right? It requires rewiring the organization, redefining how decisions get made. So let's talk a little bit about how you rewired the organization, sort of the internal stuff. So, what structure or cultural changes were the most critical in making this shift?
SPEAKER_03:The first thing we did, and this is probably the most important job I have, is how to maintain a culture where we're we have an entrepreneur spirit. All these companies we put together started out, you know, as a one, two, three-person shop, right? And grew. And so, how do you embrace the entrepreneur spirit yet have you operate with an institutional discipline that would make the biggest of banks and processors proud? So it was marrying how we did it. We said we're not gonna lose the ability to first listen to our customer. You know, God gave us two ears for a reason and one mouth. It's that because we should listen twice more than we talk. That's really been helpful for us. And what we did is we made sure we created a centralized steering committee that every cross-functional area of dependency, because in payments, things are not kind of, you can't compartmentalize things. You got boarding, risk, you got terminal certifications, you got to deal with the car networks, you got accounting, finance, funding, reconciliation, billing, reporting, all of that. So what we made sure is every C-suite executive had a seat at the table, and we we still operate this way today. We have a steering committee that meets every single week. We know what our core focus is, and anything that is it's it's real simple. And whether you're a mega multi-billion billion dollar company or you're a smaller, say, one or two, three billion dollar company, you got to do the same thing. What are you trying to do with your clients? And PayRock, our clients are our sales partners, our sales channels. The merchants, the other thing philosophically we did and culturally we did, is the merchants are not our customers. That might sound a little bit sideways to a lot of people, but guess what? The merchants are our customers' customer. Our customer is a sales partner, their customer is a merchant, we've got to take care of them. So we had a very customer sales partner-centric focus. You'll see one of our taglines is PayRock is the platform built for sales partners. And so what we wanted to do is make sure it was easy for our sales partners to go into the market and compete. The other thing we had to do, Greg, to bring this together and bring sanity, we had to begin to reinvent the focus of our sales partners to be much more vertically oriented. Again, for decades, traditional channels were able to go out to the great unwashed masses of North America, let's say, and call on a restaurant, call on a hobby shop, call on a hair salon, call on a barber. You know, you go down the list, it didn't so much matter what business they were in. So we we found that to be the case, that and we're doing that today. As our traditional sales partners reinvent themselves with our products, you'll see we're much more focused in the verticals that we're attacking. Doesn't mean we walk away from other at-bats when they come our way, but it's what we're hunting for.
SPEAKER_01:Sure, sure. Yeah, I remember when I started in payments 20 years ago, it was, you know, the the analogy was a sales guy had a trunk full of terminals and he stopped at one end of the shopping mall and walked down and he visited every single one and he could sell them all the same product, but it doesn't work that way anymore, right? With the the software and the specialized solutions and things like that. So I just think it's kind of funny that you mentioned that because it is a a big shift. Were there any other things culturally or like internally, the way you operated the company that that sort of changed, or or was it pretty much the way you just outlined it?
SPEAKER_03:It's the way I outlined it. And it was the other thing we had to do when you begin to patch companies together, we had one premise for everything we did. We wanted to make sure the channel that the company we acquired that their new business was going to be able to be written on our own core platform. That was really important. So we stuck to that discipline. The other thing we stuck to was 90% of the time of the acquisitions we did, the founding teams, we wanted them to become stakeholders in payrock. So it's a bit, again, payrocks are unique. You know, we all like to brag how our companies are unique and different, but we truly are, even though we're backed by probably the best private equity firm in the market for payments, and there's there's others that are great. The founders and management team of PayRock own a substantial amount of equity in the company because everybody, although they took some chips off the table when they became part of PayRock, they rolled over part of their equity in their company into the bigger company. And the majority of those people still work for us today. There are some, given eight years has passed, that have retired and knowingly wanted to retire, you know, when we bought their company. So I would say these are the things we really focused on. And then I'll start with this too, Greg. You can't manage what you can't measure, and you can't manage what you don't understand. And it starts with data and ends with data. People that know me real well will say Jim is a data freak, he's a data scientist. And but I am for a reason because everything we do, the first thing we committed to, we invested millions of dollars in court data technology, data management technology, to where all our data is in one place. You know, people will share that, but we do it. We live it, we breathe it. We want to make sure that all the raw data we put in our data lake is reconciling to our financial statements and the way we present ourselves to the world. So I'll tell you what, having the data and being able to study that data and analyze it to make better decisions is very, very important. And I would recommend any company in payments or any anything, know your data and commit investment dollars to making sure it's in one place, it's reliable. So that was, I would say, Greg, if you look at the number one thing that's helped us the most through this journey is making sure we had our arms around all the multitude of data that flies around in payments. It's crazy how big it is.
SPEAKER_01:Yeah, absolutely. So I think that's a good segue to the next question. So when it comes to making decisions, which those could be about, you know, what products to build, who to buy, who to partner with, how do you make sure that you as a company don't get bogged down into the politics?
SPEAKER_03:First, again, it goes back, we we've centralized where that decision-making authority is. And when political type of conversations begin to occur and tensions there, and there's conflict, and sometimes the conflict's healthy, sometimes conflict's not healthy, Greg. And when it either way it's happening, we have a real simple thing we do. We say, okay, to everybody take a deep breath, and let's talk about how this impacts the customers we have and the ones that we're prospecting. And sometimes what we find, Greg, is that we got ourselves into a flaw of chasing that next shiny object. And we've got to say, even though that thing that's shining over there looks attractive, that wasn't what we agreed we were gonna do. And sometimes it's just the tough love of saying to somebody in the organization, no, we're not gonna chase that particular part of the market. And again, we want to concentrate, and this is gets into the more vertical approach, we want to concentrate on the areas of the market where we can win. I'll give you an example where we've we've invested, we started investing eight years ago, getting really, really good at what is called unattended. I'll oversimplify it's vending machines, kiosks, laundry, car washes, amusement parks, parking garages. We're a big believer and bullish that the unattended experience where you're buying something and you're tapping your card on a device is going to continue to explode and grow. So there's an example, Greg, of where we focused on a specialty capability and we've tripled down on the investment we're making there. That's just one example of you know, probably nine others I could give you.
SPEAKER_01:Right, right. Well, this kind of change is never easy. So, how do you balance keeping the sales channels informed of what you're doing without overwhelming them? And sort of what did that look like in practice?
SPEAKER_03:Yeah, the way it looks in practice is what we do is we twice a month, we have what is called a product pulse. And we're everybody in the organization, whether it's sales, finance, risk, accounting, operations, they all know what we're focused on doing. And the reason we're working on something in the Tecker product roadmap is so that we can meet a client need. The conflict comes in is when you get you always going to have these emergencies that pop up that you didn't plan on. You know, give you an example. The other day there was a file missing. And when a file's missing, Greg, it means there are merchants not getting funded. So the talent that's supposed to be working on you know XYZ for a customer gets distracted for a day or two, maybe. And so when you get back together twice a month and there's a bit of a delay, they know why there's a delay. And I think it comes down to one simple word, communication. We still could get a lot better communicating, but we try to over-communicate and not estimate when something's gonna get done just because it's the convenient thing to say. I think that's why the customers that Payrock has, they know we're not gonna BS them about our timelines. You know, we're gonna give them reasonable timelines. I've found, we have found, that if you're if you communicate well and you're clear and you deliver when you're supposed to deliver, customers will usually hang in there with you. You know, and and there's exceptions. Sometimes you get you get a good customer and they're bought by somebody, right? You have no choice, but you're gonna lose them. As we've gotten bigger, we're also growing up and learning that the market is constantly never changed, always going, going, going, and changing. You know, the um acquisition we did recently of Blue Snap gave us global capabilities, gave us ability to go up market. And it's a set of capabilities that we're taking to our mid-size clients well, too, that want to go into other markets. So it's another example of things we targeted and focused on.
unknown:Okay.
SPEAKER_01:Well, all this sounds great. You've got the strategy, you've talked about the structure, the governance, all that's in place, but the real test really comes in the results. So I'd love to dig into what proved the strategy worked and what's the hardest lessons that there were along the way. So if you had to point to maybe one or two, three proof points or metrics that really told you, hey, this really worked, what would that be?
SPEAKER_03:Well, the the first thing is everybody likes to quote growth rates. When you look at our core platform and you look at the year-over-year Kager growth rate of that which we're boarding new on our own platform, we're growing at close to a 37% year-over-year rate. That's fantastic. We love it. And what we invested in to do that is working most of the time, not all the time. And what ends up dragging that with a company like us that we've purposely invested for scale, we knew we were buying some good cash-flowing assets that were going to generate the cash flow to make these investments, but the year-over-year growth rates of those static portfolios, you know, it's like this, right? And that drags that overall growth rate. So PayRock's got to be patient. We've purposely invested for scale. We're taking that cash flow, we're plowing it back into the future, and to bring some balance to our overall blended growth rates, we're going to have to be patient. And that's probably the you know, the toughest thing to manage through. You'd like to show you know those 30-something percent growth rates on a blend, but that's just not possible when you've done what we've done as quick as we've done it. And then the people equation. You know, we're 2016 when I joined PayRock, we had 17 employees. Today we have over 1,400 globally. President of our company and a team, for example, they're in Ireland this week. We invested heavily in talent in Ireland. There's a lot of great technology talent in Ireland, and both in the Belfast and Dublin area that has served us very, very well. So it's investments like that where we were looking for strategies to use to assemble technology and product talent quicker than we might otherwise be able to do it in the United States, and at a more reasonable cost as well.
SPEAKER_01:Well, let's talk about some lessons learned. So, what was the hardest lesson you learned in this? And secondly, how did you do this and continue to protect the payrock brand? Because I know that's so important.
SPEAKER_03:The biggest lesson we learned, even though we were careful about who we bought, every company we bought had a founder that was amazing at what they did. Otherwise, we wouldn't have bought them. The lesson we learned, it's really hard for those in those teams of individuals to let go of what made them great. Even though they did what they did because they know they gotta look forward. So the lesson learned is a human one, you know, and the fact that you just gotta take a deep breath and you gotta be patient and you gotta let the impact of that change, Greg, to the way they operate settle in. You can't the lesson is don't come in like with a bulldozer. You gotta be very careful and selective in how you're pivoting to the new modern set of tools.
SPEAKER_01:Okay, so just about how do how do you, you know, with all this change, protect the payrock brand?
SPEAKER_03:Well, what we've done is virtually every acquisition we've done, we've rebranded, other than what we're doing in um Puerto Rico, because there's a brand down there, Dynamics. So, for example, it's Dynamics Payments, powered by Payrock. Puerto Rico is an island. We're in the U.S. Virgin Islands too, and that brand is really well established there. So, what we did to protect the brand is to make sure we didn't allow the multitude of other brands we acquired to linger on. That's where you know we had to be a little bit more abrupt and changing to the payrock brand. And then the way you operate, the other thing we did to protect the brand, you're still gonna answer the telephone, right? So we again, like I said, we centralized our data, we centralized where all the calls were coming into as well. And one set of data, one set of tools, one team. That was really important because otherwise, if you're despaired all over the place, and I'll tell you what, Greg, to centralize data and centralize support, it's very expensive to do.
SPEAKER_02:Yeah.
SPEAKER_03:Absolutely. You need a lot of money. You got to deploy a lot of capital into that initiative.
SPEAKER_01:Okay. So every CEO that goes through a transformation like this has kind of what I'm using air quotes, a never-again list. So just curious what's sort of on your never again list?
SPEAKER_03:I will never again, and I'll probably end up doing this three weeks from now, allow, and I don't mean shiny object in a negative way, I'll never again let some of the opportunities that come our way that aren't in the core of what we agreed we wanted to be and do distract me and us. What I learned, and even though I was coming into this in 2016, and I had been an executive at a big public company, payments company, the journey, the last eight years, I allowed pockets of time where myself and our team would get distracted chasing something that when you get, you know, six months later, you're like, oh my God, why'd we do that? We knew we shouldn't have done tried to do that. And a lot of times, I'll never again try to jump into an area of the market that there's a competitor that really has a superior set of capabilities that takes too much money to replicate. So the never again is don't chase dreams you can't win at. You know, make sure you're chasing in vertical spots in the market where you know you have the capabilities today to win, or you're gonna have them pretty soon. That's our never again.
SPEAKER_01:Gotcha, gotcha. So to wrap up, let's let's look forward. So if a if another payment CEO came to you and and said they wanted to kind of go down this path that you have, what would be the first three things on your 90 day playbook that you'd tell them?
SPEAKER_03:Well, the first thing I'd tell them is evaluate the team you have. Have now, because don't assume that the team you're going to go out there to try to recruit and hire is going to get it. Make sure if you're going to embark upon something bigger and better and stronger, make sure you have the team now. And if you don't have the team, take a deep breath and assemble it. Because you just can't go out, even though you hire the best talent that has had success, it takes time to bring this talent in and groom them to be focused on what you've agreed you're trying to accomplish. So my best set of advice is that. My second thing would be the data. And my third thing is make sure you have a balance sheet and a capital partner that's going to be patient and understand there's going to be wins and there's going to be losses. And it's a blend, it's an actuarial blend. That's the way this business is working. But make sure you have the capital, and then after you estimate how much capital you need, probably multiply that times one and a half times. Because you're never right on your first, you know, what does the carpenter say? I'm going to measure it three times and cut once. Right. I say for evaluating how much capital you need, measure three times and then go back and do it again, and then do it again. So do the three times over three times, say nine times, and then embark upon what you're going to do. Because it usually takes more money and more time to do what you think you're going to be able to do. And look at Greg, I've been doing this for decades. I still miss the mark on that. Maybe when I grow up, we'll get it right, you know.
SPEAKER_01:I think I think you're doing a great job. I think that's that's great advice for folks out there. So, last question: what's next for payrock? How do you continue to build on this momentum?
SPEAKER_03:We're in a really good place where we're focused on sales execution now. You know, there's been a lot of purposely investing for scale, purposely investing in new products and technology. We're now in a place foundationally where the pivot for payrock now is sales execution. We have enough scale. We're big enough, we're strong enough, we have the cash flow. I have seen the last three to nine months a strengthening in the performance of our portfolio in terms of economic cycles. It certainly helps when interest rates are lower. There are external factors that impact us. And then executing on this global strategy. I mean, the world's gotten a lot smaller in the digital age here, and it's getting smaller and smaller. And good, solid North American businesses are looking to expand into other markets. So that will be a tremendous amount of our attention, is really leveraging these global capabilities we now have to bring to our existing clients and our new ones.
SPEAKER_01:Okay. Well, I think that's a great way to wrap up the show today. So, Jim, I know your time is very valuable. So I really appreciate you being here today.
SPEAKER_03:Yeah, thanks, Greg. I do appreciate you guys and everything you're doing too.
SPEAKER_01:Absolutely. And finally, to all you listeners out there, I thank you for your time as well. And until the next story.
SPEAKER_00:Thanks for tuning in to Focus Build Win, a special series exploring how Payrock's focus on core products drives alignment, growth, and lasting partner success. To explore more resources and insights, visit www.payrock.comslash agent opportunity.