Greg Kilstrom (3:34)

Yeah, yeah, great. Well, yeah, let's, let's dive in. We've got a few, few things to cover here. Want to talk about first the secure digital payments and you know, first let's start with what are some of the things that are happening right now in digital payments that you think will shape the, the next three to five years?

Peter Galvin (3:55)

Yeah, I mean I think there's so many interesting trends here. A few of them, it all really started with digital wallets. If you look at what's happened with Apple Pay and Google Pay and even some of the other companies out there and brands integrating wallets into their environments. And so if you look at my kids age, for example, they don't even carry a physical wallet anymore, they just carry their either iPhone or Android phone to make payments. So I think that along with contactless has really driven that capability. And then on the flip side, I think that's what's really been interesting is phones and tablets are now becoming point of sale terminals. So when you look at what's happened to credit cards or physical cards, I think the same thing is that same trend is starting to happen to point of sale equipment so that now everyone, you know, anyone can basically turn their phone into a point of sale and take a, take a digital credit card. The other piece of that, which is also because of the digitization of really a lot of different, not just payments, but you know, businesses in general. Payments are being embedded into software and so now what you're going to start to see is like you know, payment acceptance devices being, you know, in a car, part of a car. So as you go through a car wash you never, you never have to do make a payment. I think the Most interesting thing also from a, just as we kind of go up a level in the software world is that, you know, if you look at software programs today or the big, if you think of the big public software companies today, many of them were, are horizontal in nature. So they're, they're, they're very big, complex, difficult to use. Our customer base is usually small and medium sized merchants. And what's interesting from that digital perspective is that you have this advent of vertical SaaS companies. So companies that are providing software as a service to all kinds of different third party types of businesses. And it's just, you know, we spend a lot of time with those types of companies and it's really pretty amazing. You think about pet vets or boring your dog or even horse boarding or taking care of any kind of animals, those are all become digital experiences where you can do an appointment online, you can pay for it online, you can even see a video of your horse in a barn if you wanted to see that through some of these platforms, you know, and that, that extends to, you know, med spas and hair salons. And I think the other thing you're seeing is what we call pro serve workers. So that people who are doing landscaping or plumbing or electrical, those kind of roles have also become very digital. Where previously, you know, you try to call someone, find out if they were available, they give you a, you know, an eight hour window to arrive at your house and show up at your house and then they, you know, leave you an unintelligible invoice that you maybe you would pay by check. By some point that whole all has become a digital experience, including the payment component of it. And so usually if you're, if you're making that appointment, for example, you might already have their payment, you put in your credit card or have already have your credit card on file with them or once they want to make that payment, they're in your house, they just ask you for a credit card and have a digital POS system and then you can pay it with your digital credit card. So I think all of that, that is probably the thing that I see that it's really changing the landscape of payments and kind of what's going to be very exciting in the next three to five years and that just trend will continue. So every business will be kind of digital, digitalized and then payments will be embedded into that process.

Greg Kilstrom (7:33)

Yeah, yeah, I mean definitely a lot of, a lot of exciting things there. And even, you know, there's, there's the combination of payments and almost Logistics, you know, combined in that, with. With some of the things you're describing, and a lot of that is making things very convenient for. For the consumers in areas and industries that. You mentioned that traditionally there was a lot of manual stuff being done, so lots of convenience being added. I wonder then, security and convenience are often seen as different ends of a spectrum as well, especially given your security background too. How do you see platforms balancing these two priorities to meet customer expectations?

Peter Galvin (8:24)

Yeah, I mean, it's interesting because I came, as I mentioned, I came out of the kind of the security industry, and the security industry was very much about how to make it absolutely secure and was less interested, I would say, in many cases, about making it easy to use. And I think that's the challenge that organizations and payments face. And I think that is also when you think about embedded payments, the real beauty of why embedded payments are kind of important is because you're now embedding that payment experience into a software platform or a POS system. And I think the balance of that is that the ways for security have gotten much better. So we used to always rely on a username and password for so much of everything. And now you have new technologies like tokenization. So you're tokenizing cards. So you have a token that represents the card, but can only be used for a single transaction. From a consumer standpoint, now they have the ability to develop pass keys, so you don't actually need to remember a password and, and all kinds of biometrics. So if you think about using, you know, your fingerprint or your face or, you know, whatever else is, is needed, that those are all the things that make that consumer experience so much better. And so I think there are some technologies, and you're seeing the implementation of those technologies occur and that make that, you know, kind of more of a frictionless payment experience. Because, you know, the, the best payment experience somebody has ever had is the ones they've never known they did in a sense. So that is, I think, you know, where security and convenience is coming in. And luckily, I think the technology from a security standpoint, with some of these continuing advances, are making it much more easier for the security in the background to take up, hold, but not impact the consumer experience.

Greg Kilstrom (10:11)

Yeah, yeah, and you mentioned the term frictionless, and I want to talk about that a little bit more too, because I think it's certainly the expectation of customers now. You know, they're used to dealing with, you know, they deal with the easiest and the most frictionless methods they can. You know, when I Assume when given the choice. But how would you define frictionless? And you know, where do you see most companies still falling short with that?

Peter Galvin (10:39)

Yeah, I think the most frictionless experience is, you know, if you look at, you know, any of the card sharing apps, for example, you get in your car, you go on the app, you get out of your car, you never really think too much about making a payment unless you tip them. And I think those experience, those kinds of experience are completely frictionless. Our CEO likes to say the best payment experience is the one you never really saw. And that's kind of how, when you think about embedding payments is really powerful. And that's not always the case with everything that you're doing. But you know, we just see that it's like if you're an E commerce site and you have, you know, a Apple Pay or Google Pay or even a PayPal button or something like that, and you're, you're, you're focused on how, how, how do you make it easy for consumers to actually pay for something. You can, you start to see that those are the technologies that people will use because they, they don't have to go through this painful process of putting in a credit card number and all the other data. It's just all there for them to be able to do that. So whether it's even, you know, whether it's using those kind of systems and having those kind of buttons on it in E Commerce site, embedding the payment and getting the payment upfront from a consumer so that they can, they never have to worry about that again, making it easy to, you know, take a picture of your credit card and that credit card just gets uploaded and becomes tokenized. So all of these things are really designed to make that much more seamless. And then, you know, what we have seen and what I think is true is that especially as you look at different generations of people, you know, there are, there are just, you know, consumers who, if there's not an Apple Pay or Google Pay or PayPal or, you know, Shopify or whatever the payment button is of choice for them, they'll just go somewhere else. And so they are looking for, you know, immediate feedback. I think the world has become a lot faster. And so people are, you know, they're expecting, expectations are a lot higher for, I just want to go get this thing, buy this thing and be done with it. And I don't need to be able to fill in, you know, 14 different lines of information to be able to have that, to buy that, have it delivered to me and have it arrive at my door. So I think those are some of the things that are really driving, you know, in my mind being frictionless and are driving, you know, the different brands and retailers to really implement these types of capabilities into their system. So again, it's kind of this whole embedded structure of, you know, making sure that they have everything they need to know about a consumer to keep that information safe, but it's available so that when the consumer wants to purchase something, it's a, you know, one click kind of experience.

Greg Kilstrom (13:24)

Yeah, yeah. And I, I like the example of the, you know, the car sharing apps of like, you know, I, I remember back in the day, I don't even know if this exists anymore. But, you know, taxis that took cash only versus Uber, like, what are you going to take? You know, like, unless you're somebody that carries a lot of cash around. Yeah, I don't even know if that exists anymore. And yet I would say literally 4 days ago I was in a hurry somewhere, pull over at a gas station and go in to pay, and they only take cash. And like, my head almost exploded. Like, I don't, it didn't even, like the words didn't even make sense, almost. So, you know, like, that may be a rather extreme example, but I've had.

Peter Galvin (14:07)

A similar experience where, you know, I had to, I was in Las Vegas about a week ago, and you jump in, you know, you jump in a cab. And the experience for me was I jump in the cab and I just get out, grab my bag and I'm about to leave. And the guy's like, no, no, no, you need to pay me. And I'm like, oh, yeah, that's right. I'm in a cab. I need to actually pay you. And in this case, they do have credit card readers, but it was just the, you just such a, you know, so you just forget, right. If you have this kind of seamless, frictionless experience, you just forget that you even need to bother to, to break out your, your credit card or your phone to be able to, to pay for something.

Greg Kilstrom (14:43)

Yeah, yeah. And I think that's the, you know, I think a lot of attention gets paid on the, the ease of like scheduling a ride or whatever. But like, the payment part of that is such a, you know, to your point, is such a critical thing because I think I've, I've done the same thing. Like, I've almost walked off from a taxi because I forgot that that was actually that point of friction that you had to. And again, back in the day I was like, you know, I'd have to scramble for like which is this a business thing? Do I use the business card? Do I, you know, versus it's just like behind the scenes.

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Podcast Host / Narrator (16:07)

You mentioned a little bit about how.

Greg Kilstrom (16:09)

This can impact customer loyalty and things. I wonder if you could talk a little bit more about that. What are you seeing as far as how seamless and frictionless payments can really have an impact on long term customer value?

Peter Galvin (16:25)

You know, we've done some different, we talk to customers, we do different surveys and we just see that especially, especially there is a, a difference between like older consumers and younger consumers. But especially when it comes to younger consumers, all of the technology pieces that we talk about become very important. And so from that perspective, you know, we really see that if, if you can't make this experience and it's not just for payments, I mean, I think it's generally for everything. If you can make this experience something that is enjoyable or easy or fast, you know, customers just won't come back. And that is the challenge. And so when you, you could look at, and you can look at the data, you can start looking at like cart abandonment rates, right? And you know, going back to like having different buttons on your, your shopping cart. E Commerce is a great example of that. Where there are definitely examples of if you were to do AB testing, for example of a, a site, E commerce site that just had a basic hosted page that could take a credit card data and every time you go there you have to fill out that information. You have to fill out your address and phone number and all that stuff versus a page that is really a one click button. The, the Carta bana mates are significantly higher on hey, I have to fill out all this information. How badly do I really want to buy this Or I can just go to someplace else, right? And if you, if we look at technologies like what Amazon did, right, which was they just have a one click button. You know, they've made it really easy for you to go shop. They, they have a good amount of activity where they also feed you information so that it's easy for you to get. And other retailers are doing a much better job. They're building, they're building similar applications. Now you can get, you know, if you're a loyal shopper for a variety of companies, usually you can download an app on your phone or your iPad or your Android device and then you know, they're pushing you stuff constantly and if there's something you want to buy, you can buy it. And I think when it comes to younger consumers, those are the things that they're interested in because they're not on their computers and they're, they're always, you know, they're carrying around their phones and their phones are the device that allow them to do everything in their lives and make a payment. It's just one of the things that they want to be able to do and making it, able to do it easily. So if they're walking out of a store, you know, can they just flash their phone and you know, pay for something? And so that's why I think that those companies that are meeting the needs of the consumer and I think this has always been true, but it's, it's more true now because of the digitization of, of all of these transformative things that were we seen in the world. Right. That it's this digital transformation that's been happening for the last 10 or 15 years that's really impacting consumers today. And that digital transformation is driving, you know, companies to be thinking about how do I make this whole consumer experience great and easy and fast and meet those needs. And payments is just a component of that that comes along.

Greg Kilstrom (19:28)

Yeah, yeah. So I want to last topic I want to talk about is the shift to in APP payments. And so NMI did a survey recently that shows some strong growth in in APP payments but also some hesitation from some SaaS platforms. So can you talk a little bit about that and maybe what's the biggest risk for those platforms that delay adopting embedded payment capabilities?

Peter Galvin (19:58)

Yeah, I mean, I think that the challenge is that, you know, and having been in kind of both sides of those industries is that, you know, SaaS providers really understand software. So they understand how to build software, they understand what it takes to build software, deliver it to customers. What they don't really understand is payments. And so there is a lot of, you know, they, they start looking at payments and there's a lot of complexity associated with payments. And so there is that. I think that's part of that reluctancy to actually embed payments into their, their systems. But what we're seeing is, and some of the examples I, I made at the beginning of the show were really about here's where customers have, have gone through that, that transition. And so, so if you're building an application and let's say it's a application so I can board my horse, right? So if I have all these other capabilities that I can do online, why can't I pay, make that payment there? And also as the, as the owner of that business, the thing is, is that one of the things you may want to be able to do is like, hey, you have a cancellation policy. So if it's a 24 hour cancellation policy, if you don't have a payment method online, you can't charge them if they didn't show up. Right? So there's a real benefit from a competitive standpoint and a revenue standpoint for these SaaS companies to embed payments. I think that one of the things that we, we spend a lot of time on is trying to better educate SaaS companies about, you know, why it's important to embed payments. And, and, and also about the experience, right? We're back to what is that experience for embedded payments. And there's a number of examples of market leading companies today that have done a really good job in, you know, focusing on an industry, developing software components for that industry and really being really focused on their, the end businesses and providing, you know, all of the components that they need. Because a lot of the times it's, it's you know, payments with one component, but it's, you know, online reservation systems or being able to book an appointment or you know, being able to do inventory. I mean the best part about you know, some of these proserve systems is that hey, now I can be at my house and I'll know, you know, I get a text in five minutes that says the guy's going to show up in the next 15 minutes. I didn't have to sit in my house for eight hours, right? Or you know, it's this also this level of being able to, you know, so you have a communication platform, you have an inventory platform, you have a booking platform and you have payments all combined all into one for these very specific industries. And so that's where the SaaS companies have to keep thinking about, okay, I need to add this additional Payments component so they can maintain and build customer loyalty. And now they have that payment information. It makes it so much easier for that, that consumer to come back and just use that system over and over again. Because they all again went back to the frictionless piece, which is, it's very frictionless to be able to do that. I could do that instantly and I need to go board my dog. I can easily go on the application, book my time, make my reservation and have everything, you know, reserved within a few minutes. So I think those are the experiences that consumers are looking for.

Greg Kilstrom (23:07)

Yeah, yeah, definitely. So we certainly talk about AI a lot on the show and the latest flavor agentic AI is certainly top of mind for a lot of organizations, a lot of brands these days. Looking out a little further, there's been some recent announcements of consumer serving buyer agents. So I can have basically my AI, personal shopper, things like that. I'm sure there'll be plenty more in that around that in the days to come. What impact do things like this, you know, agents really on, I guess both sides of the transaction and just kind of a shift in that, in that direction. You know. What kind of impact do you see this having in the short term on companies that stand to do a lot of business from these consumer agents?

Peter Galvin (24:00)

Yeah, I mean, I think this is going to be companies with first mover advantages that are building agencies for being able to, you know, buy and sell products. I think, you know, if you think of the kind of the Internet e commerce age of the 2000s, there are a lot of companies getting into that business, you know, rather quickly. So there were in certain companies like Amazon had a first mover advantage. I think there's similar opportunities in the area for agency AI, especially in being able to build receptive agents that can talk to other agents that a consumer might have. So if I create it, if I had a shopping agent and I'm looking for something specific, the onus is really on those other brands or companies to be able to have something that can respond to that and respond to that in an interesting way. And if you think about now or with AI, the way that we think about searching for stuff now, we're asking questions. Before we were kind of typing in, you know, a couple of terms. Now we're asking like, how do I do this? Or how can I make this happen? Or where can I find the following, you know, product or offering? And that has really that, that's also a little bit of change in consumer behavior or can change in like digital computing behavior. And so I see that. I mean, I, you know, I'm not engineer by trade, but you know, just the ability to go in. And even for myself, I was trying to plan a vacation and just being able to go in and go to one of the AI coding platforms and be able to write, you know, a few lines of, hey, I want to stay at this kind of, here's where I want to go. I want to stay at this kind of place. These are the things I want to do. And the ability to get back all this information. Now, in that case, I didn't actually book anything, but, you know, the ability to be able to just book that and have it booked on my behalf or at least tentatively book it and then give me a submit button so I can just pay for it, you know, is very, very powerful. And I think that that is kind of the future. The future is going to be. I'm not going to go look at a bunch of websites. I'm going to just tell it what I want it to do, give it a bunch of options, have it come back to me and give me options on, you know, what I want to do for travel or what I might want to buy. And so being able to have the other side of those systems, being able to understand how those, that information's coming in and be able to respond to that information in that way will be very, very important. And I think it's, you know, I love technology, so I think it's another very exciting trend that we're seeing in the, in the business. And that AI is a very, you know, it's amazing how powerful it has become as a technology in such a very short period of time.

Greg Kilstrom (26:33)

Yeah, yeah, love it. Well, Peter, thanks so much for joining today and all your ideas and insights. One last question for you. I like to ask everybody on the show, what do you do to stay agile in your role and how do you find a way to do it? Because consistently.

Peter Galvin (26:47)

Well, luckily, I love technology. When I got into university, I was very, you know, not that interested in technology. And then I, you know, started playing around with computers and just have been in it for so long that, you know, we were just talking about AI, which I, I find fascinating. So I think, you know, part of it is just the inherent interest and exciting excitement in technology generally, which just keeps me motivated to learn and new things from. I think being curious is very helpful. And also I think the other benefit for me is that I have the opportunity to meet and talk to a lot of people. I go to a number of events I go to some trade shows. I do have colleagues and groups that I work with that are other CMOs, not only in the payment industry but in other industries, which I think is very helpful because getting that cross pollinization. And then I think the other thing is I read a lot so I enjoyed reading and I think that gives me some of the, some of the information that I need. But I think staying curious and you know, always being curious about what's new I think is part of what keeps me up to date and also enjoying what I do for for a living because I'm always learning new things.

Greg Kilstrom (27:54)

Yeah, love it. Well again, I'd like to thank Peter Galvin, Chief Marketing Officer at nmi, for joining the show. You can learn more about Peter and NMI by following the links in the show notes.

Podcast Host / Narrator (28:07)

Thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well. You can access more episodes of the show@theagilebrand.com that's the agile brand.com and contact me. If you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.gregkilstrom.com that's G R E G K I H L S t r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.

Peter Galvin (29:00)

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