Payments Dialog: State of Integrations

On this episode of Payments Dialog, we welcome Swarup Bandyopadhyay, director of engineering at Spreedly, in a deep dive into the realm of integrations. We talk a bit about trends we're seeing in the payments industry, how organizations are leveraging integrations to support their payments strategies, and what we see coming next.

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Want to learn more about how Spreedly can help with your payments integrations? Reach out to us here.

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Rough transcript of this Payments Dialog:

Peter Mollins:

Hi, everybody. This is Peter Mollins and welcome to another edition of Payments Dialog. Really excited to have Swarup Bandyopadhyay, who is the Director of Engineering here at Spreedly. Swarup, great to see you.

Swarup Bandyopadhyay:

Great to be here. Thank you for having me.

Peter Mollins:

Excellent. Well, today we're going to be talking about integrations and the role that integrations play, integrating to a PSPs, or payments service providers, and what role that in those integrations play within the broader payments orchestration system. But before we do, I'd love to hear from yourself about your background, your role here at Spreedly as well.

Swarup Bandyopadhyay:

Sure. I guess, given where I am in my life, you could consider me a veteran. I've been in the industry for over 20 years. I started in '98, and I like to call Spreedly the culmination of my career. I went through a lot of different companies, including small companies to big companies, and a variety of industries, travel, MarTech, and so on. Love being in FinTech right now. It reminds me a lot of things that I did in the early stages of my career. I did a few payments related projects early in my career. So coming here, I heard a lot of familiar terms that jog the old all memory from way back when. So that was really fun coming in here and coming full circle almost.

Peter Mollins:

That's terrific. Well, let's jump in and have a little discussion about those integrations.

Swarup Bandyopadhyay:

Awesome.

Peter Mollins:

So maybe just some context, I'll start off on a little bit of context, but I'd love to hear if you've got some extra context that you'd like to provide. Some of the terms we're going to be throwing around are things like gateways and PSPs, so maybe we can start with PSPs, or payments service providers. Do you want to maybe just give a quick recap on what a payment service provider is or how a merchant might use one?

Swarup Bandyopadhyay:

Sure. I mean, the way I talk about this when someone asks me, "What do I do for a living? What company do you work at?" And the easiest way I tell my folks is, "You know that button you press when you go to Amazon and you want to buy something? We do stuff from that button when that button gets pressed." So just as if you were going to a grocery store and swiping a card, something happens in the backend somewhere that actually figures out how to send payments and do that entire process. So a payment service provider does exactly that. It takes in credit card information, some payment information, and it goes to an entity like a bank and figures out how much money needs to be taken from that account. At a very abstract level, that's what it is. We can get into a lot more nuances there, but if you want to tell anyone what a PSP is, that's it right there.

Peter Mollins:

Okay, perfect. Well, I've been hearing certainly a lot more in the market about this increasing trend where merchants and platforms are looking to integrate with multiple PSPs. So not just one, but have multiple. And so we've seen data from the 451 Group where almost 70% of companies are now seeing that it's just the default mode where they want to have multiple integrations. Now, I'd like to get your perspective because you're right there in the bullpen seeing this happening. So maybe you can tell me a little bit about what you're seeing, what trends you're seeing across payments integrations.

Swarup Bandyopadhyay:

Well, I think, first and foremost, when you think about multiple integrations, there's a few ways to think about it, one of them specifically being from a risk standpoint. So I think back to my days when I was a software developer at Hotwire, and what we did there is that we had multiple payment PSP integrations as well. But our specific use case was around fail-over. If our primary PSP was down then we had a secondary to always fall back on. So that was our primary or primary use case, which is also the use case pf a number of customers that we may have. Another use case that people can think of is if you're an international business, an international company. A payment service provider you're using in one country may not work in another country or even across different currency codes and whatnot. So as businesses become more international, this need to have multiple payment service providers does increase.

Peter Mollins:

Got it. So in a way it's the optionality, you have more options when you have more integrations so then not only the fail over, so if one goes down, then another one, you can redirect to another place. But also, like you said, if I'm going into Brazil and my payment service provider is not great in Brazil, I might end up with 30% declines or even more, right?

Swarup Bandyopadhyay:

Exactly, exactly. What we're trying to do here is helping people out with that choice and making it easier for folks to make that choice and not worry about having to integrate with multiple providers.

Peter Mollins:

Right. And at your time that other software organizations, I imagine that, that must've been, it's only integrating, it's maintaining it [crosstalk 00:04:59].

Swarup Bandyopadhyay:

Exactly. Yeah, exactly, and that falls back into what we do here at Spreedly, and the integrations that we have are the heartbeat of Spreedly maintaining all of these integrations so that we take away the burden of those integrations from our customers. So we take that on and that's our value prop for our customers.

Peter Mollins:

Right? Yeah. Because I talk to a lot of our customers, and for many of them, what they want to do is they don't want to focus on building and maintaining those integrations. They want to focus on giving a great customer experience, right?

Swarup Bandyopadhyay:

Exactly. So if you're a journalism site, you want to focus on getting the best content out there for your readers and whatnot. Do you want to build an entire expertise around payment systems? That's something that you don't want to focus on. You really want to focus on journalism articles. Let us handle that for you.

Peter Mollins:

Right. Right, absolutely. Yeah. And for some companies it's even like it's just part of their business. I think about, like you said, journalism companies, I think about some of our customers that are media platforms that are supporting newspapers and the like where, for them, if they want to sell to customer A that's using Stripe and then customer B that's using Braintree and customer C that's using authorized.net or CyberSource, or who knows what, if they don't offer that possibility they're going to lose out on deals, aren't they?

Swarup Bandyopadhyay:

Exactly. And like I was saying before, it's all about choice. You come in and work with us and we have, I forget the exact number at the moment, but 120 plus different gateways and PSPs that we integrate with. So you come in and you figure out which ones you have relationships with. We probably have integration with that already.

Peter Mollins:

Right. Great. Now, you've mentioned about integrating with PSP, these payments service providers. There's other kinds of integrations though, too, aren't there? What else do you see as connections that might be an option for a merchant or platform?

Swarup Bandyopadhyay:

So it's interesting. I think as we're looking at our table stakes and what we are offering, our PSPs offer a bunch of other things too. It's not just a regular, hey, swipe a credit card, get payments, or get a refund, or what have you. They're offering other services such as fraud services. Is this going to be a potentially fraudulent transaction? They're offering other services like buy now pay later for folks who don't have funds at the moment, but we can at least try to turn a transaction and be able to be able to get payment later. And there's also other things out there like PSPs are looking to onboard new customers and how do they do that in a clean way that doesn't have a lot of hoops? They can look to us because of our customer base on how to onboard other customers. And then there's crypto, but we're not going to open up that can of worms right now.

Peter Mollins:

Oh, that's good. That's fair. Great. Well, back to something that you had mentioned earlier, you were talking about how some PSPs might offer certain currencies for support. In addition to currency or geographic support. There's also other kinds of support, isn't there? So there might be support for regulatory frameworks, and I guess the one that comes to mind is secure customer authentication or SCA and 3DS, the approach to SCA, it's been on a lot of people's lips recently. How do you think about integrations in the context of 3SS and SA?

Swarup Bandyopadhyay:

Sure. And just for folks who may not understand fully about 3DS and SCA and whatnot, think of it as those little capture things that you get when you're logging in somewhere, just a way to authenticate you are who you are. So from a payment service provider standpoint, what's another way to prevent someone from using a fraudulent card or using a stolen credit card? It's authenticating them in a secondary manner like you would do with those captures. There other ways that you're seeing on the web right now. So yeah, the EU, obviously, in recent memory, January 1st of this year, they decided, "Hey, all online transactions need to have this." So yeah, it's a huge thing for us. From an integration standpoint, we're taking two stances here really. We understand our customers are already integrating with Stripe and other folks and whatnot, so we have these things that we call direct integrations, like 3DS direct integrations, that are directly integrated with our current gateway integration.

Swarup Bandyopadhyay:

Sorry, if I used the word integration way too much there, but it's there. But we're also offering something that's very Spreedly like too, which is our 3DS Global product, which you can go in and it's not tied to any gateway. We're utilizing a partner of ours to drive this. And you go with that and you get an authentication, and then we pass on how that authentication has done to our gateways for the remainder of the purchase. And also, the fun thing is, in the last couple of days or so we just released a standalone authentication as well using our 3DS Global provider as well. So if you wanted to not even worry about the purchase aspect of it right now, but we want to do a standalone opt for, say, a future recurring subscription, you can go ahead and just do that standalone right away and retain those authentication values for future purchases.

Peter Mollins:

Got it. Now, you're talking about retaining those payment methods for future use.

Swarup Bandyopadhyay:

Mm-hmm (affirmative).

Peter Mollins:

So what does that actually mean? When I'm a merchant and I'm storing it, I presume that's like me locking it away in some kind of payment vault.

Swarup Bandyopadhyay:

Yes.

Peter Mollins:

So how does that vaulting, restoring of credit cards or payment methods, how does that relate to the integrations world?

Swarup Bandyopadhyay:

Here's a great thing about where Spreedly really comes into all of this, it's independent to that. What we consider our vault is independent from all our payment partners. Yes, there's keys into which payment methods are with which gateways, but it's independent from our integrations itself.

Peter Mollins:

Okay, got it. Okay, so when you say independent, what does that actually mean for me as a merchant? Does that mean that I have the ability to report that to or connect that to other PSPs or to move that around as I wish?

Swarup Bandyopadhyay:

So yeah, when we vault, we do something we call tokenization. We tokenize that credit card. That's an independent entity of our own. And then you can use that token for multiple PSPs. So you don't have to go in because you have an integration to Stripe and authorize.net. You don't have to create two payment methods for both. You can utilize one that you had retained on Stripe and then utilize that same token for another PSP.

Peter Mollins:

Okay. So that must be why I'm able to do things like smart routing, because now I can direct things to the right PSP depending on what the transaction looks like.

Swarup Bandyopadhyay:

Exactly. And that's a culmination of a lot of things that we've been building over the years. Here's buzzword time, it's a synergy that we've been building over the years. We've been building all these tokens over time, and then now we're starting to bubble up smart routing and figuring out when to route specific transactions in which direction. And we can do that because of all the things that we've built up to this point.

Peter Mollins:

Got it. Okay. Now, we've spoken a lot about the business value, but you yourself as a Director of Engineering, how do you think about the technical advantages of having an orchestration platform as that intermediary between a merchant or platform and their payment services?

Swarup Bandyopadhyay:

The biggest thing I think about is separation of concerns. Going back to an earlier statement I made, with Spreedly, you just come in, you integrate once with us, and you let us handle the burden of the integrations and keeping up with those integration with the PSPs and whatnot. Of course, you can reach us whenever you want to as a customer whenever you have questions and comments or problems, because problems do arise, but you concern yourself with us versus reaching out to, "Oh, is that Braintree issue, is it a Stripe issue, or so on?" So that's what we will do, one integration and you've got everything you need.

Peter Mollins:

Right. And I just actually think back to the idea of the storing of the payment methods. Also, that's got to be a savings from a PCEI compliance perspective, too, I imagine?

Swarup Bandyopadhyay:

Yeah, exactly. So one of our biggest value props is not only this integration part of it, is that we handle the PCI burden completely from you. We'll handle the transmitting of sensitive data, we'll handle all that, that's something, again, going back to the journalism example, you handle what you know best and we will handle what we know best. And we'll make sure that you get the payments your company needs for any transaction.

Peter Mollins:

That's great. And just the power of the platform to be able to welcome all these new payment services into the fold, it's very exciting. So congratulations to you and the team. It seems like great work.

Swarup Bandyopadhyay:

Thank you. I really appreciate it. I'm very proud of the team and everything that they've accomplished and we will be accomplishing in our future projects.

Peter Mollins:

That sounds great. Well, Swarup, it was great to connect with you, I guess. And I'm sure that joke has never been used. I appreciate the time.

Swarup Bandyopadhyay:

Thank you. I appreciate your time too.

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