This week on the Common Cents podcast: How can financial institutions reclaim their place and revolutionize bank bill pay? Garrett Baird, Vice President of Product, Banking & Fintech at Paymentus, shares how the company’s longstanding vision to simplify bill pay for consumers all comes down to the three Cs: choice, convenience, and control.
That comes from a wealth of experience: This year, Paymentus celebrates its 20 year anniversary! Listen in to hear how Paymentus is powering the next generation of electronic bill payments with cloud-based technology and solutions, helping more than 2,200 billers and financial institutions exceed customer expectations.
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Read the full transcript below:
Ben Halbrooks:
Welcome in to the Common Cents podcast by Kinective, where we connect you to the future of banking. Join us as we dive into the latest news and trends in banking and fintech, learn from leaders in the space, and make the complex simple. It’s Common Cents!
I’m your host, Ben Halbrooks, and in this episode, you’ll hear a recent conversation I had with Garrett Baird, who is Vice President of Product for the Banking and Fintech division at Paymentus. Paymentus is powering the next generation of electronic bill payments. And this year, Paymentus celebrates its 20-year anniversary.
Garrett is going to unpack for us the history behind their original vision from day one to simplify bill pay for consumers and how that has carried them up to today, and a little bit about what’s next. Garrett also shares Paymentus’ vision to help FIs reclaim their place in bill pay. And finally, he discusses why real-time integrations to the core are necessary for the future of real-time payments.
I think you’re gonna really enjoy this. I certainly did. So without further ado, here’s Garrett Baird.
All right, well, I’ve got Garrett Baird here. He is Vice President of Product – Banking and Fintech at Paymentus. Garrett, thank you for joining me.
Garrett Baird:
Great to be with you today.
Ben Halbrooks:
Absolutely. And I have seen that it is 20 years since the beginning of Paymentus. So we’re gonna dive into a little bit of that today. And that’s a huge accomplishment. So much to celebrate there. But first, before we get into that, I want your elevator pitch for what does Paymentus do. I know Paymentus does a lot, but what does Paymentus do for financial institutions, specifically? And you have up to two minutes. Take it away.
Garrett Baird:
Excellent. So within Paymentus Banking and Fintech, which is the division of our enterprise that works specifically with financial institutions and fintech firms, we deliver modern money movement. So we empower financial institutions and fintechs to reclaim their position at the center of consumers’ money movement and payment needs.
And how do we do that? Well, we have a flexible payment hub that allows us to really transform the money movement landscape at scale. So for our clients, who are the financial institutions and their consumers, they get the ultimate in choice and control and speed all in one location.
And the products that we offer to do all of this are specifically in bill payment through our product called Bill Center. We also offer person-to-person, or P2P, products so that our consumers can send money to individuals very quickly and easily. We do account-to-account or A2A transfers as well.
So again, all three of those would be in primary money movement that we embed into financial institutions banking experiences. We also offer the ability for loan payments to be made quickly and easily with our financial institution clients. We also embed into this lots of fraud management capabilities. And all of our products are powered by our unique Instant Payment Network, or IPN. We’ll talk a little bit more about that.
But at the end of the day, the value that differentiates us really falls into the “three Cs” we call them:
Choice: so choice for consumers to easily make payments the way that they want to.
Convenience: where we’re meeting customers anywhere they are. So in any channel that exists, you can make payments very conveniently.
And we offer Control: So control for how our consumers view information about what bills are due, how they pay those bills, and then of course, how they move money either between accounts they have within different financial institutions, or to friends, family, or even the things like paying the landscaper. All of these happen through our platform.
Ben Halbrooks:
Excellent. I love the three Cs. And I love how modern technology has really enabled those things in a massive way, and Paymentus is at the forefront of that. And I love talking about payments, because there’s lots of stuff happening in fintech, but payments has got to be one of the more exciting categories. But you are pretty much right at time, which is perfect.
And I already mentioned this, but 20 years of Paymentus, that is quite an accomplishment. So congrats to you guys for that, one. And then two: let’s go back. Let’s turn back the clock. How did Paymentus get its start versus where you guys are today? And then as a tag on question to that, where are you headed?
Garrett Baird:
A great question. So I’m still a bit of a freshman here at Paymentus, having joined the organization just a short time ago. But Paymentus has been an organization that I’ve long admired. So I’ve been in the payments business for a number of years myself. And when you look at the focus that our founder, Dushyant Sharma, had really from day one, was just to simplify bill pay for consumers.
So think, go back to 2004, when this journey started for Dushyant and the organization, bill pay was just a very analog process. Paper everywhere, the bills, people writing paper checks, licking envelopes, putting stamps on, and taking that bill stack every month and working it through. Everything’s slow and disconnected. The Internet, which emerged, there was certainly digital banking that was happening. But those early digital banking and bank bill pay experiences, while providing the convenience of electronic bill pay for the first time, still didn’t really solve for some of the pain. In fact, it introduced some new pain. So things were completely dependent on the customer kind of going in, getting everything set up, managing the whole process every single month. So you’d still kind of be working through that stack of bills. And things like, well, when is this actually due? How much do I actually owe? Getting that in the banking channel was near impossible. And then forget about the concept of actually getting a confirmation number back from that biller that you can use when you call in to your, let’s see, your electric company or water provider or your cable provider. With the bank bill pay experience, the tradition was, well, here’s a confirmation number. That’s our confirmation number that the biller just completely wouldn’t understand.
And by the way, these payments would move very slowly too. So many times, consumers would see, yup, you’ve submitted your payment, not knowing that behind the scenes, there would be a paper check that was going to be printed and mailed on their behalf, drawing on their account to be sent in the mail, into that biller’s just old school lock box and process that way. And they thought, oh, I’m doing this digital thing! But actually, you were relying on the US mail to get your payment there ultimately. And so, of course, that led to challenges with late payments and just the lack of assuredness that a payment was arriving.
And so, the focus really was, how can Paymentus, through modern technology, digitize the experience and give billers an opportunity to create an amazing experience on behalf of the customers and bring the convenience and choice and control into their interactions with the customers?
So Paymentus began working very closely with billers, and the strategy was to start with some smaller billers, apply the learnings, and continue to expand on the platform. So more capabilities, more channels that we could deliver through our single platform on behalf of the billers, more types of payment methods over time. So the platform moved from initial just ACH to then accepting card payments, credit cards, debit cards, digital wallets, solutions like PayPal and Venmo can all be used to make payments. And through multiple channels, via the web, through mobile device, text-to-pay is a very popular option. And then, of course, by phone on the IVR. So Paymentus worked very closely with billers to help them get paid faster, to lower their costs of processing these payments.
And the result that occurred was the biller direct experience really eroded the volume that bank bill pay had. Well, not the volume necessarily, but the share that bank bill pay had. Because fortunately, these electronic experiences, everything was going digital at the time.
And the question was really, all right, if you’re going to go digital, you’re going to go and work with your billers directly as a consumer, where are you going to pay through your bank? And biller direct, the experience of working with each of your billers and using these convenient payment channels and experiences really leapfrogged bank bill pay. So that’s where things become very interesting for the products that I work on every day.
Because we, as I said at the outset here, our goal is to allow our FI clients to really reclaim their place in bill pay and deliver a better experience that overcomes a lot of the challenges that gave the biller direct experience its leg up in the first place. So when we think about things like the ability to offer payment choice, to offer information from more information from the billers directly into the bank bill pay experience, that’s where our business at Paymentus becomes so interesting, because what we’ve introduced is the Instant Payment Network that bridges the two sets of organizations that we work with, our billers and our banks. So by creating this network between the two, we can provide an amazing experience for bank bill pay clients and their customers and members that includes things like being able to quickly and easily see how much is due and when, to offer some added choice in the types of payments.
So, for example, being able to offer card payments to some billers in our experience is something that is practically unheard of. And then to also offer capabilities like a real confirmation number served up to the consumer that’s generated by the biller, and it’s something they would actually understand if you would call in and speak with them on the phone if you had a question about did you get this payment. Because ultimately, consumers, when you look at them overall, about 16 bills or so that on average we need to pay every month, and that is a massive $5 trillion in annual spending that that represents.
You would think those 16 bills, so many people say, oh, well, I’m just set it and forget it on autopay. But the reality is, you have lots of consumers that are living paycheck to paycheck, and that’s even amongst some higher earners. So while the experience has really become very digital, it’s still not automated.
And so that’s another one of our goals, is to get the 60% of bill payments that are made as one time to make those more automated. And again, that’s whether they’re working with our biller direct experiences from Paymentus or from our bank-based experiences. We want that set it and forget it capability.
Of course, for those that are watching their cash flow and they want to review each of their payments, that’s going to be there, too. But we see an opportunity, specifically in the bank bill pay side of things, to bring these unique capabilities that we have to the forefront on behalf of our clients and their customers, to really revolutionize bank bill pay. And again, what we call is, look, the home base for most consumers, to direct deposit from their payroll, still going into banks. And so that, you know, being the home base, we think many people appreciate and want to use that consolidated experience, but the bank bill pay capabilities just haven’t kept up over time to leverage that advantage that the banks have. We’re turning that on its head, because we know how to provide a great experience in bill pay. We learn in the banking and fintech division and our products at Paymentus from our colleagues that have had a biller direct experience and created these amazing solutions that have really made us a leader in the space over this 20 years, and we’ll continue to build on this and really get to that point where we, Paymentus, are wherever consumers are and want to pay their bills. Going back to that original vision from our founder, which was to, literally from day one, simplify bill pay for consumers. So we are excited to be celebrating 20 years and seeing and leading into the future to make an amazing payment experience for everybody, no matter where they are.
Ben Halbrooks:
Clearly spoken from a wealth of experience. I mean, two decades worth of good work in that space. And I love the way that you put that, letting FIs reclaim their place in bill pay and revolutionizing that. That’s pretty cool. That sounds like some fun marching orders and a cause to get behind. So I appreciate you outlining that for us. And I can’t wait to see what is next, because that’s such a great cause, and clearly driven by consumer expectations, and just, like you said, continuing to simplify and to think through every piece of that puzzle.
Well, I know that this is kind of a big beat for you guys, so I want to ask you this final question about real-time integrations. And you did touch on this a little bit earlier, so we’re coming back around on this. So final question for you is: why are real-time integrations to the core necessary for the future of real-time payments?
Garrett Baird:
It’s a great question. Honestly, I don’t know how we could live without that. We, at the speed of modern money movement, the speed and the scale and the security that our financial institutions want and frankly need organizations like Paymentus to deliver, having access to the data that is resident on these systems of record that are the banking cores in the case of our financial institution clients is absolutely essential.
So let’s talk specifically about real-time payments. So as you know, in the US, you’ve got the two emerging real-time payments networks from the Clearing House and then FedNow from the Federal Reserve. As we’ve begun to make our investments in those two networks and connecting up to those rails on behalf of our clients, it’s critical for a variety of reasons that we have access to the core data as we’re working through those real-time transaction requests that are coming from consumers as they seek to move money.
As we’re moving the money, we need to check on a few things. We need to know about funds availability, we need to know about account status, we need to know about potentially existing fraud indicators, all these things in real-time as we’re seeking to make these transactions happen. Because we need to ultimately balance the consumer’s desire for the speed that we’re promising, and the financial institutions need to manage risk that can be associated with these transactions.
So you think about the things like the potential for fraud. So real-time payments, and you’ve heard and probably read the headlines about fraud and some of the challenges that Zelle has had, for example. So when we think about the real-time ability to move money, we need to also be able to score and evaluate transactions in real-time. And connecting and getting the data from the core helps us make much, much more informed decisions when it comes to potential fraud implications of making a particular money movement.
Then ultimately, we want to improve the customer experience, because we see a lot of value in the instant movement of the money. So whether it’s somebody being able to very quickly do a P2P transaction, somebody being able to very quickly fund another bank account that they may have at another financial institution, we see the need to connect into those core environment details in order to make the right decisions very quickly and to allow us to assess the risk of transactions at the same speed as the money is going to move. So again, we think it’s absolutely essential to have that real-time access in line with the transactions that we’re making by connecting to the cores.
Ben Halbrooks:
Well said. And I like the way you put it: this is not an optional thing.
This is necessary. To do what you need to do, you got to have all the horses going at the same speed.
Garrett Baird:
Absolutely.
Ben Halbrooks:
Garrett, I really appreciate your time. You’ve given a lot of great answers and a good overview of 20 years of excellent work at Paymentus, and I can’t wait to see what’s next.
Garrett Baird:
Thanks so much.
Ben Halbrooks:
Thanks so much, Garrett.
Huge thanks to Garrett for that interview. And if you want to know more about Paymentus, you can visit them at paymentus.com.
And as always, Common Cents is brought to you by Kinective, the leading provider of connectivity, workflow, and analytics software for the banking sector. Check us out at kinective.io and connect to the future of banking. Until then, we’ll catch you on the next episode – it’s Common Cents!
