B2B Agility™ Episode #39: Payment Innovation for SMBs with Brian Gowdy, Aurora Payments
In Episode #39 of B2B Agility™ with Greg Kihlström, host Greg Kilstrom engages in an insightful discussion with Brian Gowdy, CEO of Aurora Payments. The episode delves into the pivotal role of payment systems in empowering small and medium-sized businesses (SMBs) to navigate economic challenges, enhance customer engagement, and drive business growth. Below is a comprehensive summary capturing the key points, discussions, and valuable insights shared during the conversation.
1. Introduction
The episode kicks off with Greg Kilstrom introducing the topic: the significance of payment systems for SMBs. He poses a critical question: “Are your payment systems an asset that drives growth or are they just another expense?” (00:33). This sets the stage for an in-depth exploration of how effective payment solutions can transform business operations and customer interactions.
2. Guest Background
Brian Gowdy provides a detailed overview of his extensive experience in the payments industry. With nearly three decades in the field, Brian has led Aurora Payments to support over 27,000 merchants. He shares his journey from Massachusetts to Charlotte, North Carolina, working with First Data and Wachovia Bank before taking the helm at Aurora Payments in August 2017 (01:16). Brian also mentions his personal stake in SMBs, co-owning nail salons, which enriches his understanding of the challenges faced by small business owners (03:36).
3. Payment Systems: Cost vs. Growth Asset
Greg and Brian delve into the financial impact of payment systems on SMBs. Brian emphasizes that payment processing fees can constitute a significant portion of an SMB’s monthly expenses, often the third or fourth largest (04:38). He states, “You could plug in 3% of all sales as a pretty good barometer of what a small, medium sized business might pay.” (04:58). This highlights the critical need for SMBs to select payment systems that not only manage costs but also contribute to business growth.
4. Evolution of Payment Systems and Fintech's Role
Brian discusses the transformative changes in payment systems over the past decade. He contrasts the simplistic payment terminals of the past with today's dynamic fintech solutions that offer a plethora of features beyond mere transactions. For instance, he references Clover’s introduction around 10 years ago, which aimed to provide an Apple-like user experience with app integrations (07:43). Brian underscores the potential of fintech companies to offer more comprehensive services, such as working capital and business loans, positioning them as indispensable partners for SMBs (08:33).
5. Customer Engagement and POS Technology
The conversation shifts to the role of Point of Sale (POS) technology in enhancing customer engagement. Brian explains how modern POS systems are evolving into hubs that gather valuable customer insights. He illustrates this with the concept of dual pricing, where businesses pass payment processing costs to consumers, a trend accelerated post-pandemic (05:20). Brian also highlights innovative payment methods, such as tapping out or receiving text links to pay during services like pedicures, which enhance the customer experience by simplifying transactions (17:31).
6. Aurora Payments' Solutions for SMBs
Brian elaborates on Aurora Payments' approach to supporting SMBs through a horizontal platform strategy. This involves integrating with multiple back-end processing partners like Fiserv, Global Thesis, and Worldpay to offer flexibility and optimal solutions tailored to diverse business needs (13:18). He further discusses Aurora’s acquisition of MailSoft, a specialized scheduling software for the nail industry, demonstrating their commitment to vertical integration and addressing specific industry challenges (16:08).
7. User Experience and Technology Accessibility
A significant portion of the discussion centers on the importance of user-friendly interfaces in payment systems. Brian draws parallels with Apple’s intuitive design, stressing that complex systems can deter SMBs from fully leveraging technology (18:20). He shares Aurora’s focus on seamless onboarding and continuous user interface improvements to ensure that both business owners and their employees can effortlessly use the payment systems (19:45). Brian emphasizes that maintaining a positive user experience is crucial for customer retention and brand reputation.
8. Opportunities for SMBs in Fintech
As the conversation nears its conclusion, Brian outlines several opportunities for SMBs to harness fintech for business growth. He advises SMBs to embrace diverse payment options, including mobile payments and international payment methods, to expand their customer base (23:04). Brian also highlights the shift from traditional banking channels to integrated software solutions that offer payment capabilities, urging SMBs to carefully review contracts and remain aware of pricing structures to avoid potential pitfalls (25:42).
9. Conclusion
Greg wraps up the episode by reinforcing the importance of leveraging advanced payment systems to strengthen SMB operations and customer relationships. He encourages listeners to explore Aurora Payments’ offerings and apply the insights shared by Brian to enhance their own business practices (27:34).
Notable Quotes
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Brian Gowdy (04:58): “You could plug in 3% of all sales as a pretty good barometer of what a small, medium sized business might pay.”
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Brian Gowdy (08:33): “If I were an SMB, I would demand that [fintechs] do more.”
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Brian Gowdy (17:31): “If you're getting a pedicure, you're sitting in a chair for 30 to 45 minutes, your hands are free. Why not be able to tap out and pay or get a text link to pay while you're sitting there?”
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Brian Gowdy (18:20): “If you're going to lose a client, we generally will lose them in the first 30 days. They can't figure it out. They can't embrace the new technology. It's too complicated.”
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Brian Gowdy (23:04): “Do your research. There's a lot of great vertical opportunities for you without defaulting to a credit card device or a platform because you don't know it like a Square.”
Key Takeaways
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Strategic Payment Systems: SMBs should view payment systems not merely as expenses but as strategic assets that can drive growth and operational efficiency.
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Fintech Integration: Modern fintech solutions offer a range of services beyond payment processing, including working capital and business loans, which are essential for SMB resilience.
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Customer Engagement: Advanced POS technologies can enhance customer interactions by providing seamless and flexible payment options, thereby improving overall customer satisfaction.
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User-Friendly Interfaces: Ensuring that payment systems are intuitive and easy to use is critical for SMBs to maximize their adoption and effectiveness.
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Diverse Payment Options: Embracing a variety of payment methods can help SMBs expand their customer base and adapt to evolving market demands.
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Vertical Integration: Tailoring payment solutions to specific industry needs, as Aurora Payments does with the nail salon industry, can provide SMBs with specialized tools that address their unique challenges.
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Continuous Improvement: Regularly gathering and acting on customer feedback is essential for maintaining a positive user experience and fostering long-term client relationships.
Final Thoughts
Episode #39 of B2B Agility™ sheds light on the intricate relationship between payment systems and SMB success. Brian Gowdy’s expertise underscores the transformative potential of fintech in reducing operational costs, enhancing customer engagement, and fostering business growth. For SMBs seeking to thrive in a competitive marketplace, leveraging innovative payment solutions is not just beneficial—it’s imperative.
To learn more about Brian Gowdy and Aurora Payments, visit the links provided in the show notes.
Thank you for reading this summary of Episode #39: Payment Innovation for SMBs with Brian Gowdy, Aurora Payments. Stay tuned to B2B Agility™ for more insights into driving success in B2B marketing.