Thought Leaders in Financial Technology: Infinicept CEO Todd Ablowitz (Part 3)

Sramana Mitra: Let’s talk about some customers who have become payment facilitators on top of your platform. Focus on use cases and customers that are interesting. Talk about the before and the after.

Todd Ablowitz: One of the most interesting customers is FiveStars. FiveStars is a loyalty tablet that goes on the counter of your local nail salon or restaurant. You simply put your phone number in, and they provide offers to you via text.

What they realized is, if they can make those offers redeemable, they would increase the value to their merchant dramatically. They sought us out a couple of years ago and we helped them go through the analysis, how to do it, how to do the underwriting of the merchants, and how to monitor those merchants.

It took them about five weeks from the time they got approval from the processor to the time they ran their first transaction. They said, “Had they not used our platform to get there, instead of having this large number of merchants up and running and making revenue, they wouldn’t have a single transaction yet. Instead of hiring an army of people to run this business, they have one product person and one operations person.”

Sramana Mitra: Fantastic. Let’s do another example preferably that throws light on other types of customers.

Todd Ablowitz: I’m going to frame this for a second. In 2011, Marc Andreesen wrote a famous article, Software is Eating The World. The trend that I’m laying out for you is that software is eating payments. I’m going to go through as diverse an example as I can of different kinds of payment facilitators.

Another example is the doctor’s offices and hospitals. Every doctor’s office has a very sophisticated practice management system. Hospitals have these very sophisticated billing systems that have to do with insurance, managing the doctors, and everything you can imagine.

Those companies are becoming payment facilitators. The credit card acceptance for co-pays and patient pay is being handled by the software company. They’re depositing the money into the doctor’s bank account. The doctors don’t want to have 10 vendors.

Accepting cards is often due to the commodity, but in the world of payment facilitators, that practice management system can do so many things to align the software value proposition with the ability to go to the last mile paying that merchant. They know that it happened. They know if there’s a dispute. Those are called chargebacks and you want those. They can make the entire process so much easier.

They’re also less risky. Let me tell you why. A payment facilitator knows their vertical market. Therefore, they can make better decisions about approving them and managing them.

Another use case is RunSignup. This one I can talk about. They basically started with a little form for loosely organized running races to sign up runners. What happens at the end of filling out that form? You have to pay for the race.

In those days, most races were paid for on paper. They started putting credit cards at the end of the process. If that race starts signing people up now and it’s not going to happen till spring, all that money goes into the bank account of the running race.

If the race doesn’t happen, everybody who puts their card in is going to ask for their money back. If that race is nowhere to be found, Visa and MasterCard have this system called a chargeback. The bank is going to give you your money back.

They were having trouble with declines. Traditional credit card processors were often saying no. They held the funds until the race happened. They control it. They create a better experience for all involved.

This segment is part 3 in the series : Thought Leaders in Financial Technology: Infinicept CEO Todd Ablowitz
1 2 3 4 5 6 7