Innovating in Payment Technology: Plimus CEO Hagai Tal (Part 5)

Sramana: If a company like Autodesk has a product for sale in Europe, and I am in the U.S., what is preventing me from just going to the European website to place my order?

Hagai Tal: Most people simply go to the website. We are the vendor who supplies e-commerce tools, but companies need to establish their own strategies and policies. Autodesk has their own tools to determine where you are located. Your payment method and address must match the country where the sale is taking place. For example, we will use your 16-digit credit card and alert Autodesk that the issuing country is not the same as where the sale is taking place.

Sramana: So you do have some capabilities to help your clients, such as checking the country where a credit card was issued?

Hagai Tal: Yes. The first six digits tell you location information. The tools we provide will allow our clients to accomplish variable pricing across different countries. We deliver a lot of knowledge with our fraud detection capabilities.

Sramana: Does that mean that Chargify is a competitor?

Hagai Tal: They do a portion of what we do. You might even use them in conjunction with our service. There are cases where our solutions work together.

Sramana: Where has the majority of your business come from? 

Hagai Tal: Mainly from self-service platforms. The majority of our business is done through mom-and-pop businesses. We started adding larger clients in the past several years. Our company policy is such that if we add a feature for a single client, that feature must be permitted to be introduced into our platform which will benefit everyone. This means that small businesses now have a much richer environment with features available that they will probably not need, but if they grow then they will be able to use them. Even though we have 6,000 clients, the majority of our money is coming from the long-tail.

Sramana: What has been Plimus’s ramp from 2008 to 2011?

Hagai Tal: There are three numbers we focus on. One is the amount of transaction growth through the system. That is not something that we put in the books, but it helped me when dealing with the banks. In 2008 we transacted $64 million, and we kept around $5 million with EBITA between 0 and 1. In 2009 we went up to 100 with $8 million of revenue. In 2010 we transacted $249 million with 9% revenue. The profit margin grew to around $3.5 million. We are on a run rate for $270 million transacted this year with around $25 million in revenue with around $7 million of EBITA.

Sramana: What are some of the company’s growth challenges?

Hagai Tal: There are a lot. The main challenge is moving from a platform that is capable of supporting medium sized clients to a platform that is able to support any client we can imagine. There is a different DNA there. We have to hire a team that will be able to provide professional service on one end but also maintain an open platform where people integrate with minimal interaction required from our team.

This segment is part 5 in the series : Innovating in Payment Technology: Plimus CEO Hagai Tal
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