In this the seventh episode of PayFAQ: The Embedded Payments Podcast brought to you by Payrix, Host Bob Butler interviews Misty Novich, VP of Payment Solutions at Neon One, about the importance of payments in the non-profit space.
Misty has been in payments for over 20 years and has worked for both small and large merchants. Neon One is a software management company for non-profit organizations that offers several different resources including donor management, program management and operations. Neon One currently services 35,000 social good organizations in the United States.
There were approximately 15 different payments integrations across the company when Misty started at Neon One and she was tasked with creating a payments strategy that would allow them to consolidate the payments volume onto one platform and monetize the payments. She discusses Neon One’s interest in creating revenue for themselves as a for profit company but also their desire to invest back into products and services for their non-profit clients.
Neon One chose Payrix because they wanted the PayFac model but couldn’t build it on their own due to lack of resources and experience, so Payrix PacFac as a Service solution helped them create Neon Pay and leverage the advantages of being a payment facilitator without the liability and compliance burden. Ultimately, this ensured the client experience was seamless and new customers were able to get up and running quickly.
According to Misty, monetizing payments is one of the quickest ways companies can see revenue. She says Neon One has more than doubled their revenue while also decreasing customer’s costs in many ways because there were some merchants in their portfolio that were paying 4% to 5% for processing before integrating Neon Pay into their software.
Misty emphasizes doing your reach when thinking about embedding payments. She explains that partnering with Payrix was the right choice because they are invested in growth and in the growth of Neon One. The partnership mentality Payrix has is not something she’s found elsewhere, which was one of the biggest factors in deciding to leverage Payrix’s expertise to integrate and implement payments seamlessly.
-
Transcript
Bob Butler
Hi, everyone. Welcome to the PayFAQ: Embedded Payments podcast brought to you by Payrix. I’m your host, Bob Butler. And today I’m going to be speaking with one of my favorite people in the payments business, Misty Novich. She’s the VP of payments for Neon One. And we’re going to be talking about the value of integrating payments into their software. Well, hi, Misty, welcome to the show.
Misty Novich
Hi, Bob. Thanks for having me. I’m excited to be on.
Bob Butler
Thank you so much. Can you tell our audience a little bit about yourself, Neon One, and your software and payments experience?
Misty Novich
Sure, well, a little bit about myself, I have been involved in the payments industry now for a little over 20 years. So, I’m dating myself a little here. And I’ve worked with some of the smallest mom and pop operations and also some of the largest merchants across the globe. And I would say my software experience is actually pretty limited. Before I started Neon One in late 2018, I really didn’t have a lot of software-as-a-service experience. So, over the last couple of years, I’ve definitely educated myself or been educated on software-as-a-service and integrating payments into that has been quite an experience.
Bob Butler
Can you tell us a little bit about Neon One specifically?
Misty Novich
Yeah. So, Neon One is a software management company for nonprofit organizations. We have multiple products across our product suite. ranging from peer-to-peer software management to donor management. And we also have large game day clients that we service who service over around 35,000 nonprofits across the US.
Bob Butler
Wow. Can you tell us a little bit about how you guys have integrated payments into the Neon One generosity ecosystem? And can you talk about a few use cases?
Misty Novich
Yeah. So, when I started Neon One, we had multiple business units. And each of those business units that we had acquired over time, had different types of integration into their software. So, we had, I would probably say, 15 different integrations with payment processors across those different products. And so, we had simple integrations, like an integration into PayPal, for the PayPal checkout, we had integration other integrations into Stripe and blue pay Braintree some of the larger processors that you you’re familiar with, as well as into different gateways like off dotnet. And then we also had one of our products, or one of our business units actually had a registered PayFac in the US and Canada. So, we the types of payments that we had were integrated into were across the board from, you know, small integration all the way up to a registered PayFac.
Bob Butler
Wow. So, I mean, why did you want to move off those models or consolidate? And, you know, can you tell us a little bit about what led you to that decision? And as a follow-on like, what specifically did Payrix offer that maybe some of the others didn’t? What was attractive to you?
Misty Novich
Yeah, so with our payments, we actually had a large volume of payments across our different products. But because we had these multiple integrations and had split up the volume, we really weren’t leveraging what we had in the most financially beneficial way for us. So consolidating all of that volume together in onto one platform really gave us one more leverage where we could negotiate rates because the volume was much larger when we consolidated it, and it really, our focus to begin with and what I was tasked to coming into Neon One was to put together this strategy, a payment strategy, that would bring all of that volume together so that we could monetize it. So, of course, we’re interested in how we could create revenue, but also how we could create revenue that would allow us to invest back into the products and services we give our clients. So, we really wanted it, we wanted to build this payment platform, not only because we are a for-profit company, but we wanted to benefit and help give back to our nonprofit clients. And so in looking at how to do that, how to consolidate and combine the volume, we looked across the board, you know, whether or not we should be an ISO, you know, wholesale ISO, should we keep the PayFac that we had and build off of that? We looked at other, we looked at various rev share opportunities and different ways that we could create this platform and Payrix really, really gave us exactly what we needed. So, we realized early on that maybe we weren’t big enough yet or had the experience or the resources to be our own PayFac, to keep the PayFac that we had, and to build out a PayFac model. But we want to pay for that model. And we needed that model, we just, we just realized that we couldn’t do it on our own. So Payrix, that’s where partners came in and really helped take off that burden and the heavy load of some of the regulatory and compliance issues or, you know, not issues but compliance things that we had to be on top of and also just risk and underwriting. Payrix answered that question for us as well. We didn’t have and we don’t have a huge payments team. So we weren’t, we just weren’t equipped to do all of that and Payrix with the Payfac-as-a-Service model, we were able to build on Payrix’s tech stack, and get all the things that we needed out of out of the paycheck, but not have all of the liability and the concerns.
Bob Butler
So, when you were able to take advantage of the Payrix Pro product, which allowed you to have all the benefits of and the technology behind being a PayFac without all of the burdens that come along with being a fully registered PayFac.
Misty Novich
Yeah, absolutely. And I forgot, I was gonna say Payrix Pro. And I forgot that that was the name.
Bob Butler
Can you tell us how adding sort of payment capabilities and launching Neon Pay, you know, your own payments brand? How that helps transform your own customers’ experience?
Misty Novich
Yeah, so we because we had, you know, the whole reason we had all of these integrations in the first place was because we were truly concerned about what our client’s options were, as far as payments, we wanted to make it easy for them. And so, we’ve always had a client focus, but that initial client focus, or, you know, concern about opening all of these opportunities and integrations for payments ended up actually being a burden to our clients. And so, because then they had to go out and have, you know, create merchant accounts with different platforms. So, consolidating and building our in-house product, Neon Pay, it’s really helped our clients not have to worry about that. And it we’ve given them now, you know, it’s a one-stop-shop software product where they can get set up in their software, have a merchant account, start processing right away, it’s all integrated. Their reporting and reconciliation is all in one place. And our support team is able to answer their payments questions, which we weren’t able to do that before. So, we’ve really been able to, I guess, round out the customer experience and give them an option that actually takes away the burden of them having to decide and, you know, create a merchant account off on their own. And so, it’s taken out a lot of the, I guess, the thought of having the worry and burden of having to do that. So, it’s definitely helped our clients focus more on their mission and not so much about payments because they shouldn’t have to worry about payments. They need to be worried about doing good and creating, you know, better social impact. So that’s definitely helped in that regard.
Bob Butler
I mean, that’s awesome. Have you all seen an uptick in revenue per customer or if you’re willing to share a range about how much of your revenue would you say comes from payments today?
Misty Novich
Yeah, you know, I am not exactly sure how much I can divulge there or shouldn’t. But yes, we have definitely seen an uptick in revenue, for sure. Monetizing payments is probably one of the well, I don’t want to say easiest things, but it’s one of the quickest ways that a company can see revenue and revenue from volume that they already have. So, we definitely have seen revenue growth, our revenues increase, I would say, well, it’s more than it’s more than doubled, for sure. And across all of our clients, you know, we’ve, again, we’ve also not only been able to increase our revenue, but in a lot of ways we’ve been able to decrease our clients cost in payments because we saw when we were moving clients over to Neon Pay, we saw clients paying 4 and 5% in rates for payment processing with other processors. And they didn’t really know what they were paying. And so, you know, not only do we feel like this has been a huge win, because we’ve been able to monetize and gain revenue, and our clients have actually been able to gain revenue because they’ve reduced their costs.
Bob Butler
No, I mean, I think it’s great when you can, you know, when a software company can both increase revenue, so they can build it into the product, but also create that much better customer experience. I think that’s really what it’s all about. And I think you’ve hit on that a couple of times.
Misty Novich
Yeah, yeah, for sure. And, and I think with most software companies, they, you know, if you really dig into why you’re, why you’re successful, it’s because your clients, you’re giving your clients a product, that that makes their lives easier, and they don’t really have to think about it and if your clients aren’t happy, your product, your product could be as the best product in the world, but if your clients aren’t happy, it is not going to make much difference. So, I think definitely focus on focusing on the client experience in trying to make sure that you’re adding value. And that’s one of one of the things that payments, and a lot of people might not even think payments can add value, but payments add such value to clients, and especially when it’s integrated and easy.
Bob Butler
No, that’s, that’s great. I mean, really impressive the way that that you’ve built out Neon Pay, you know, but as I think about that, you know, can you share any of the lessons learned, you know, sort of any best practices or gotchas about integrating payments and any steps you took to fix or repair?
Misty Novich
Yeah, so I think probably. Well, I would say best practices is to do your research and make sure you understand. So a company looking at a partner, like Payrix, you know, to invest in a payments product and solution, you really need to do your research on what the actual product is, right? What are the capabilities, what are your future growth plans? And if your payments partner has those same goals in mind as investing in their future. And that’s one of the things with Payrix that that we really were happy with, is it, and I’ll be honest, and you know me, to be honest, absolutely. Payrix didn’t have everything that all you know, all the different processors and platforms have different solutions and capabilities. And Payrix didn’t have everything. But what Payrix had that really impressed us was a team that was invested in growth and was invested in our business and our growth. And so, wewere very pleased with Payrix in the team that Payrix has put together because we wanted to be able to be able to pick up the phone and call somebody get immediate support and assistance, which we do and that’s great. And Payrix is truly concerned about our growth. So, we wanted we that’s what we wanted is that partnership. And so, we’ve with Payrix, we feel that partnership and with other payment integrations that we have, we still have we still have some that we’ve kept and the partnerships just not the same. And so I would say do your research and really, really make sure that you understand the partner you’re going into business with and that was probably one of the biggest things for us all. Also just making sure you understand all the rates and all the fees. So, a lot of payment processors will give you a, you know, an interchange plus, you know, rate. And then it might, that might sound really great, but then they add on all of these other fees. And if you don’t do the research and really understand what and how those fees will impact your business, you can definitely decrease your revenue capability. So, I would say, do your research. Some of the gotchas I, you know, implementations always fun. Yeah. I would say, you know, just make like, as far as implementation, make sure that your implementation team is, you know, in lockstep with your partner’s implementation team. And again, I felt like we were definitely aligned with Payrix’s integration team and / or implementation team. And we were able to, we were actually able to, from start to finish, get Neon Pay up and running, actually, in like four and a half months. And so, which was just unheard of. We honestly didn’t think we could do it that quickly. But we did. And so that’s really important, right? If you’re going to monetize, if you have a strategy to monetize payments, you want to get what you want done as quickly as possible. And getting up and processing payments fast is important.
Bob Butler
Yeah, I mean, as a follow on, I remember when Neon Pay came online, and there was a huge conversion of a backbook of merchants. And would you talk a little bit about how you actually made that happen in that relatively short period of time from beginning of coding and to going live and actually monetizing and making, you know, having a book of customers within your portfolio?
Misty Novich
Yeah, so we, at the time, I want to say we had around 3,500 to 4,000 clients that needed payments or were using payments, and some, you know, a payment processor in some way. And so, we, in order for us to monetize to your point, we had to move those clients over to Neon Pay. And so, we put together a very aggressive strategy, very aggressive migration strategy, we brought in, we actually created a team of individuals, who all they did was work on migrations solely focused on migrations, and they were connected to our client success team. But we had, they were truly dedicated to just migrations. And so we had to, we had to put together the value prop, right, like what is the value prop and what we found the most important was the in-house support. I think our clients really resonated with the fact that they could call one place and get support for everything within their software product. And so that was really important. And so, we’ve put together a whole strategy on just migration and what the value prop was, and we really tried to speak to client’s needs, so that they would want to move to Neon Pay. And then we put in different strategies, also where we did decide after a while that we would, if a client didn’t move to Neon Pay, then in order for us to continue other payment integrations, we also included a third party gateway fee, so that, you know, just to help motivate clients move over to Neon Pay, it wasn’t for monetary reasons or you know, financial benefit, but it was truly to just get clients motivated to move and that really actually helps. So, if somebody is looking at transforming their payments, platform, and migrating clients, you know, putting in different strategies like that to help motivate clients to move because sometimes clients just don’t, they just need a little motivation. So little motivators, like that would definitely help.
Bob Butler
You know, finally, I mean, we talked a little bit about moving the back book, but what about Neon Pay in general? I mean, how is that a part of just the overall sales process? Or, you know, do you have people that are specific to selling Neon Pay or is it really something that just sort of comes with and we’d love to get a little bit of background on that.
Misty Novich
So, within our sales process, Neon Pay is included with all of our software products. We highly discourage clients from using another processor besides Neon Pay, but Neon Pay is built in. It connects to all our products. It’s our sales staff. Really, they are not payments experts by any means, and nor do we want them to be, but they sell payments right along with the software. So, it’s really not even a second thought, it just has become part of our ecosystem.
Bob Butler
That’s outstanding. Any final thoughts you want to leave us, leave the audience with today?
Misty Novich
I would say yes, I would say for all of those out there who are really looking to monetize your payments, or, you know, invest in a payment solution. I mean, I think I’m a little biased, because we’ve had such a great experience with Payrix, I think Payrix is a great platform to look at, and to really, you know, go through the different steps and build out a payment solution. I would just say, do your homework research, I think I researched 20 different companies, maybe more.
Misty Novich
Yeah, so I would say do your homework, but you know, really be open and ask, you know, ask different payment professionals, and, you know, their opinion and, and I know Payrix has a lot of payments, you know, people who have years of payments experience, that was another reason we really liked Payrix, as well as there are some platforms out there that are similar, but they don’t have the background and payments, like the Payrix staff has. And that’s important too. So, you know, just do your research, and monetizing your payments is challenging, but it’s absolutely rewarding. And it’s a way that you can grow your revenue, help your clients, you know, and create a better client experience across the board.
Bob Butler
Misty, you know, personally and professionally, I want to thank you for being on the show. You know, I know we’re both big believers in sharing knowledge and experience. So, we really appreciate you joining us today.
Misty Novich
Oh, thank you, I appreciate the opportunity to, you know, give a little bit of my background and experience around this and always willing to share and, you know, open to helping others do the same thing that we’ve done. So, thanks for having me, Bob.
Bob Butler
Thank you. Here at Payrix, we want to be a trusted resource for software providers who are out there trying to make sense of Embedded Payments. And we want to help you get the education you need to make the business decisions that your customers and key stakeholders will thank you for. This is Bob Butler. And this has been the PayFac: Embedded Payments podcast brought to you by Payrix.
