Welcome to The PayFAQ: Embedded Payments podcast brought to you by Payrix. As payments and software experts that eat, sleep, and breathe Embedded Payments, were as passionate about you as you are about your customers. Each podcast episode will provide insights about Embedded Payments designed to help you feel the transformation and growth of your software business. You’ll learn from industry experts, Payrix customers, and leaders on the Payrix team about the latest trends, best practices, and real-world guidance from payments experts to help you take your software platform higher.
Bob Butler
Hi, everyone. Welcome to The PayFAQ podcast brought to you by Payrix. I’m your host Bob Butler. Today I’m going to be talking with John De Stefani, the Managing Director of Payrix in Australia about integrated payments and the booming FinTech market down under. So hi, JD, and welcome to the show.
John De Stefani
Hey, Bob, great to chat to you today.
Bob Butler
Let’s start with if you could tell our audience a little bit about yourself and your software and payments experience.
John De Stefani
Sure, I was born and bred in Brisbane, Australia. Worked abroad in both the US and UK for over seven years. And returning back to Brisbane got busy having a family and well now actually have four teenagers that’s keeping me fairly crazy. But at the same time, when I came back, I entered the payments space and headed up a company called Ezidebit here in Australia, which was one of the pioneers I’d have to say in the Australian FinTech space, and eventually got acquired by Global Payments. So that was a great success. So, my interest in payments is spanned probably over 15 years, more recently with IntegraPay. And now with Payrix in Australia. So, you know, I’m really excited about what’s happening here in Australia, it is booming in the FinTech payment space, really excited about what we can do with Payrix and what we’re offering here.
Bob Butler
So, can you tell me a little bit about the current state of the FinTech market and payment facilitation in Australia?
John De Stefani
Historically, it was really about the four legacy banks that was driving the market here in Australia, it was pretty evident that there was a gap in the market where the banks wouldn’t offer or couldn’t offer a service that payments companies like IntegraPay started popping up. And that was a lot of innovative products that came to the market. So more recently, the FinTech payments space is absolutely hype and continues to grow. We’ve seen that with companies in Australia, like Afterpay, that had different product offerings. And then we saw the global FinTech players like Stripe enter the market space, as it continues to really grow exponentially. IntegraPay was one of the first PayFacs that came in the marketplace with, you know, its own payments platform, started to grow very quickly with servicing software partners, and more providers started to come into the market. So, it’s very competitive. But it was fairly focused on more direct style offerings. What we’re seeing now is, I suppose, in particular, what we’re driving through Payrix is are moves from more the traditional model to a more value driven model that includes different structures around say, profit sharing, or wholesale fees that are driving what we see the next stage in the market. So, you know, we believe we’re really in the box seat to ride the next wave here.
Bob Butler
That’s really interesting. So, can you tell me a little bit about payment facilitation and integrated solutions, and how that differs from what we would see, say in the United States market?
John De Stefani
Look, Australia is definitely less mature, I’d have to say, than the US. But there is a growing appetite for SaaS providers to get a bigger piece of the pie and get control over what they’re seeing and experience in payments. So, in Australia, there’s increasing demand for a fully integrated solution. As you know, in the US, the momentum is changing there as it is here, and we’re catching up. So instead of offering, say, a pure PayFac, there is really an opportunity to have a PayFac-as-a-Service offering here in Australia. And that’s what we see happening. So, you know, I believe with Payrix and Australia, were actually ahead of the curve. Were offering not just a current product that’s an integrated solution. But very soon, there’ll be a PayFac-as-a-Service model, which is the next stage of evolution here in Australia.
Bob Butler
Interesting. So, what does that mean for software providers that service the Australian market?
John De Stefani
The SaaS providers, they’re looking to grow quickly. So, they need to understand what their customer’s needs are in terms of particularly payments and solutions. So, whether they’re turning on payments for the first time, or discovering that there’s better options out there, there’s a massive opportunity for them to provide payment choices to their clients, and therefore create value for themselves and easy solution for their customers. So, what we’ve seen Payrix What we’ve already achieved here in Australia is we’ve built out for the Australian market with a fairly tailored solution. But it covers all payment types. And there’s particular country specific payment types here in Australia, like BPAY, which we already had covered. So, if you look at vertical software companies like fitness or rental type offerings, they’re offering more payment options is more important than ever. What I believe is the opportunities there. We’ve got offerings that are unique, that will be fully integrated. That includes now with POS terminals and alternative payment methods. So again, I think it’s important for software providers to look at the whole gamut of what’s on offer in terms of payments to find the right solution for their customers.
Bob Butler
When you take a look at software companies in Australia or companies that want to do business in Australia, what’s unique versus other countries? What are software customers looking for, as they move into the Australian market?
John De Stefani
I think there’s two areas to touch on here. And one I’ve already mentioned in terms of firstly, offering like a full payment capability. And that hasn’t been easily available to this point. There’s a lot of payment businesses that offer some but not all. So, I think that’s key in determining where a software provider should look at. Secondly, and I think this is really important, is the need to have a local leadership style partner, there’s partners that will just basically let you go without any hand holding, what we look at is managing each of these software providers through the whole strategy of payments, whether it’s the implementation from day-to-day management, I think that’s really key. And also, part of that is having a local presence, you just can’t have a virtual presidency in Australia, we’ve seen that happen with other large style FinTech payment businesses, and it’s not working. So, what we offer is a local presence, but it has a global backing. And I think that’s key to ensure that not just a software provider, but their clients are supported effectively.
Bob Butler
I think that’s so important. JD, I think a lot of folks think we can go with this global provider, but without having knowledge of the market. You mentioned BPAY and direct debit, things of that nature. I think it’s just so important. So, when you think about the software companies that are just starting out with payments, and moving into the market, where should they begin?
John De Stefani
Well, I think they need to start with their customers, they need to understand what their needs are, whether it’s about payment types, the experience needs to be seamless. The data they’re getting the reporting. And then once they know that it’s a question of how far that software provider wants to go upstream in terms of their payment experience? That’s a big question, because there’s a lot of complexities and we can help companies with that. And it’s always a question of risk. So, there’s lots of juggling balls in terms of understanding that. And so that’s where we really evaluate and provide an opportunity for the software providers to use our experience and our guidance to tell the right solution for them. And it’s, as I said, it’s a mixture of getting the right balance between risk appetite and value towards that software provider.
Bob Butler
As we come to the end of this, what should Australian software providers keep in mind as they look to integrated payments, embedded payments, payment facilitation?
John De Stefani
This is no different to what’s happening in the US with payments, it’s a real journey. It’s a sector that’s evolving, the landscape changes, the technology changes, and we all need to keep up with this. So, if you look at a provider of a payment service to you, it’s about them having expertise in that sector when they look at a provider. But I think it’s also important, as we mentioned, for them to talk to their customers and understand what they’re after. You need to find the right solution for you, not just for the Australian market. But a lot of these software providers have global aspirations. So that’s where with Payrix, you know, we’re across not just Australia, but obviously New Zealand, US, and broader. So, we offer that opportunity for their expansion. I think that’s important as well. And lastly, you know, we talked about this local partnership. And that’s just critical in terms of the ability for us to provide that advice and see it in through the complexities of this payments journey. So, it’s really getting the best outcome, not just for the software provider, but for their clients as well.
Bob Butler
JD, thank you for being on the show. I know we’re both big believers in sharing knowledge and experience. So, we really appreciate you helping us kick off our global integrated payments track on the show. Any thoughts you might want to leave us with today?
John De Stefani
I think it’s about a transparent discussion that is unique for what we’re offering in Australia. So, I think the next steps is for us to talk to each of these providers and see where we can help.
Bob Butler
A Payrix, we want to be a trusted resource for software providers who are out there trying to make sense of integrated payment offerings, and to help them get the education they need to make the business decisions, their customers and key stakeholders will thank them for.
Thank you for joining us today on The PayFAQ: Embedded Payments podcast brought to you by Payrix. For more information about Embedded Payments, subscribe to our show at payrix.com/podcasts.
