episode 16

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Epi 16: How Tech Companies Can Streamline Their Payment Processes with Ralph Dangelmaier, CEO of BlueSnap

Learn more about BlueSnap at: https://home.bluesnap.com/

Find Ralph Dangelmaier on LinkedIn here: https://www.linkedin.com/in/ralphdangelmaier/

JC: Welcome to another episode of The Future of BizTech. I am your host, JC Granger. I have the CEO of BlueSnap with us, Ralph Dangelmaier. Ralph, thank you so much for coming on the show. Why don’t you tell the audience a little bit about yourself and BlueSnap?

Ralph: Sure. Hi, JC. So I’ve been in payments. BlueSnap is a payments company and I’ve been a payments professional, I guess you call it or in FinTech now for about 30 years. BlueSnap is a company that helps businesses accept payments globally, either B2B or B2C. So it’s been a crazy time during the pandemic and it’s great to join your show and talk to your listeners.

JC: Awesome. Thanks. So a couple of questions here for you. What is the biggest pain point that your company solves for businesses and what businesses specifically do you really target?

Ralph: Yeah. So a pain point we solve, there’s a couple of them. Right now, the biggest pain point, and it’s almost like you’ve got to do this pre-pandemic and post-pandemic almost, but the biggest thing we solve is helping to automate and let businesses pay digitally through invoicing or through websites or through any kind of digital manner that they want. So right now that has been hot. We’ve been working with manufacturing services companies, SaaS companies, and trying to help them get their invoices out, embed payment links of either bank transfers or cars, whatever it may be and get those to their customers so they can pay their bills, receive them, give them a portal to look where the payments stand at the particular time.

Ralph: Because quite frankly, these businesses have created great technology. But when you look on the back office and look how they’re doing payments, a lot of this stuff is the same as it was doing 50 years ago. So a lot has evolved, but the payment piece has it. And very, very few payments are actually done digitally right now. So there’s a huge opportunity to get paid quicker, to save money and to automate this, and have a better experience for your customers, and it’s just not something that businesses have been thinking about really until the pandemic when people couldn’t come into the office and send out invoices and open mail and process checks and all those things.

Ralph: That’s very similar to what unfortunately happened in 9/11 when we moved from mailing paper checks across country to digitizing those checks and actually being able to process those on your phone or in your office. So that’s the biggest pain point we see right now during the pandemic. There’s lots of other pain points that happened with cross border payments, with fraud, with dealing with partial payments, dealing with returns and refunds, and all these other things that happens in payments. But most, I think companies think of payments as a nuisance, and our job is to make that a pleasurable experience and not a nuisance anymore.

JC: Is there any kind of specific industries that use BlueSnap more than others? Do you find like a lot of mom-and-pops are doing it within retail or do you find that it’s like you were saying, SaaS companies are coming on a lot?

Ralph: Yeah.

JC: With a marketing agency, for example, we use digital. So where do you kind of find the majority or is it kind of all over the map?

Ralph: It’s really all over the map. I mean, just recently we’ve done a ton in education. So a lot of invoices on schools. We work with a lot of digital PR agencies when they’re invoicing their clients. Tons of manufacturers of all kinds of things, auto parts, jet engine parts, tractors, all kinds of things that are equipment.

Ralph: You can imagine the logistics. We’ve signed up dozens of logistics companies and how they bill for logistics online. Services companies, oh my god, pools, lawyers, doctors. Huge entry this year to us for healthcare. So then nobody wants to do anything anymore in a healthcare. So now a payment gets texted to you. We did our first restaurants this year, of course, QR codes, pay at the table, order ahead.

Ralph: So anybody that has to make a payment, the technology is flexible enough that it can be embedded into whatever your invoicing platform is, or it could hang off a website or it could be old fashioned. You call it in and get into a portal. So there’s many ways to do it and it’s pretty straightforward. And it’s just something that people haven’t put on their priority list until recently.

JC: So let me ask you a question here. You talk about how it can be embedded. You say that a lot, as far as embedded into the platform. Is that something that most payment processors are able to do or is this something that kind of makes you guys stand out? Is there something unique about your code that allows a flexibility to put your… Like you said, embed your platform.

Ralph: Yeah. I think we do stand out. So there’s two ways to think of this. One way is a bank or payment processor. It gives you a toolkit of technology and you as a business have to really become the system integrator. You have to go out, find the code. You have to do the embedding yourself. You have to set up your fraud. You got to set everything up and you’ve got to process it. So it’s kind of like going to Home Depot and building your own shed. What we’ve done is we’ve prefabricated the sheds.

Ralph: So we’ve said here is… You have an invoice of $5,000. We’ve embedded an invoice. It’s probably going to be a bank transfer. Do you want to charge a fee or not to do that? This is most likely how it goes. We also have the technology to create the invoice for you.

Ralph: So if you’re using a Quicken, or QuickBooks, or a NetSuite, we can actually create the invoice and embed the payment as well. So we have more technology that’s built out, so the business doesn’t have to do the building. And most businesses don’t have enough invoices in reality, to put a team on it, to build out the right infrastructure.

Ralph: Now, of course, if you’re a $5 billion business, you’d do, but many don’t. So these businesses that are 20 to 30 million up to say, 5 billion, just need help in packaging the technology to meet the needs of cross border clients, bank transfer clients, car clients, invoices, non-invoices. So think of it as sort of a package solution that you can deploy depending on what the needs are of your payments or your customers.

JC: Okay. That’s really cool. And I like the simple integration of it. Essentially saving time. Now, you said that the company before in our pre-interview, you were saying that the company started in Israel, you said.

Ralph: Yeah.

JC: So tell us a little bit about what you know about the origins like how that started in when? And then what brought you into the company? Where did Ralph come in?

Ralph: I know. I’m still wondering that myself. Great question, Israel, which I’ve learned a lot about, and I got to say, I didn’t know a lot about Israel about eight years ago when I came in is as people… I generally know Start-up Nation. So what they did is not only they started a lot of really cool technology companies we all use, the ways and the wicks and folks like that, but they built an innovative payments company to help these startup agents sell outside of Israel. And that was BlueSnap.

Ralph: So what happened is, it was very focused on Israeli selling outside of Israel. And about 10 years of doing that, a bunch of US private equity firms bought the company and brought the idea to the United States and said, “If this works for Israeli customers selling outside of Israel. Why not use the same technology to help American businesses, sell outside of America? So they were early on in the idea of selling cross border. So that’s what happened.

Ralph: And after they did that in 2011 as well, about a year later, I came in the company to really bring in new investment, bring in new management and bring it to a level of scale that we are today, where we’re operating now in dozens of countries with thousands of merchants all around the world and helping them sell or collect invoices all over the world. So that’s a little bit of how the story happened.

JC: Let’s talk about that growth too. So as a marketer, I’ve always got that marketing brain on, right?

Ralph: Yeah.

JC: So I always like to ask on the show for the benefit of the audience too is what are you guys doing right now marketing wise to help grow your company? I’ve got to talk to Brie for a second there on your PR team. So I know you’re doing some PR, right?

Ralph: Yeah.

JC: But what else are you guys doing to help grow, and what kind of advice could you give or that the story you could tell that can help other business owners listening?

Ralph: Yeah. So we have a multi-pronged sort of marketing effort that goes on, right? The multi-facet is where I really get at. So we really do believe heavily in content. We think we’ve got a lot of really great content that we put out all over the place. We think people are going to start reading and absorbing your content maybe before they start to get to know who you are, and we think that content drives search engine optimization. We think it drives partner growth. That’s a core piece of what we do.

Ralph: I think we’re pretty active on social. We got tens of thousands of hours on myself and the company and we’re pretty active on posting. I think we’re very good about posting things about customers too, and how they’re solving problems, whether it’s music or whether it’s performance socks, or whether it’s buying cars online. All the things we sell, let’s talk about how they solve their problems because you may sell candy online and go, “I don’t have a payment problem.” Maybe you do.

Ralph: So we’re trying to do a lot of that. Yes, we do press releases. I mean, that’s sort of a second thing. We do account-based marketing as well. So we really look at similar like we signed up a lot of shipping companies or freight companies. So we said, “Geez, we have 10 that just signed up last month. Why don’t we go to the other 10 that are similar to them? And why don’t we send them customized notes and say, geez, happier clients do payments with us. Well, maybe you should look at how you’re doing your payments and work with us.” Because a lot of this is just awareness and time.

Ralph: We think within payments were really well-known around the banking communities and around the card brands, but we may not be around, there’s about 10 million businesses that we think we can serve around the world. It’s very hard to get your brand recognized there. So by using Google for search, by using the content, by doing account-based marketing, by doing some LinkedIn posts, by doing these press releases, we think we’ve got a touch point that’s going to reach partners and then to reach businesses.

Ralph: I’d steadily been growing our website. I mean, I think about eight years ago, our website, we cracked top hundred thousand in the world. And I think I just saw us crack a top 10,000 in the world. So we’re doing something right on getting eyeballs on our site. And I think with the pandemic now where people are saying, “I do have to innovate or think about payments differently,” it’s given us a little bit more of a lift. So we’ve tried to help people during this time.

Yeah. That’s pretty incredible. I mean, if you’re hitting top 10,000 or top 100,000, I mean, there’s like billions of websites.

Ralph: I know.

JC: If you’re anywhere near that 100,000 10,000, that’s huge. So the title of the podcast being The Future of BizTech, tell us… This is a two-part question. First off, tell us kind of what’s coming down the pipeline for BlueSnap. Maybe a sneak peek for the audience so they know where you guys are headed as far as technology-wise or features, things like that. And then also the second question is where do you think the payment processing industry is going in the next five years or so? What kind of new innovation or drastic changes do you see coming?

Ralph: Yeah. Well, I think if you asked me that question a year ago, I would have said over the next five years, businesses are going to look to digitize their payments because this whole manual AP/AR stuff is really crazy. It’s very hard to get data. You’re constantly loading things in and out of systems. They don’t reconcile. It’s a little backwards. And now, what I’ve seen happen in the last nine months is those five years is really shrunk to, I think, one or two years.

Ralph: So the industry is moving to digitize itself. I mean, right now, I think my stats are somewhat up to state here. I looked at 20% of the payments are digital and 80% are still manual. So we’ve got a long way to go to convert everyone from manual processes to digital processes. And a lot of them just don’t know how to do it. So I think there’s a big wave coming there.

Ralph: Okay. So if that’s the premise for what’s going to happen then what’s coming down the pike? Well, let’s talk about one of the obvious ones. Security, right? Everybody’s worried about someone hacking into my shop and payments going the wrong way. What happens then? So I think we got to spend a lot more time on security. There’s been some great regulations that have happened in Europe to support security by putting strong authentication on payments that happen. There’s been a great adoption recently by Visa, MasterCard, American Express, to put things like tokenization, which is scrambling up the cards or scrambling the data.

Ralph: We’ve been doing this in Israel for 10 years. These are adopted in the last couple of years. So this is going to be a big deal. Being able to recognize bad IPs, bad cards, bad actors, friendly fraud, all that stuff is going to be a big thing that’s going to happen as you move everything online. So there’s a huge piece of that. So we’ve been developing and have developed and will continue to develop products to help businesses through that transformation.

Ralph: The other thing that’s happening out in payments world is most people in the United States, we got things pretty easy. We have one or two ways to send payments, ACH and wire. We have cards. Well, every single country has its own internal payments network, like their own internal ACH or their internal PayPal. And people don’t realize that. So there’s hundreds of payment methods. Yes. Some become more famous like using Alipay. Then all of a sudden that’s become Apple pay, Google Pay.

Ralph: But there’s a hundred of those. Each country has one. So a lot of the countries want to pay using their own payment methods. They don’t want to be using an American method or a Chinese method. It’s almost insulting culturally. So it’s something that we find that people don’t understand. So we’re connecting to more of these networks around the world and places like Brazil and Holland and in Germany, so the businesses can pay locally, but the money can still settle in the United States. So that’s a big trend that we’re seeing here.

JC: I never considered that issue. I think that’s very interesting. You’re basically helping enable different countries to use their own so that their customers feel better and safer about it, but on the backend, you’re able to provide that infrastructure for them still so they don’t have to build it out themselves, but they can still say this is an Indian company or an Asian company, or Israeli company, things like that.

Ralph: Yeah, that’s right.

JC: That’s cool.

Ralph: People miss that. People miss that. We say there’s a hundred currency. So if you’re not going to use their payment type, at least don’t use their currency. Don’t insult them all the way through. Right? At least recognize you’re from Australia. We’re going to drop you an Australian dollar. Even though you may not offer the Australian payment type, which you should.

Ralph: It is insulting from that point of view and it’s kind of like gives the Americans kind of a bad rep. And so that’s a big deal. Look, the British got so upset about it. They Brexited, right? I mean, this is a big, big deal here and it’s something we don’t always pay attention to. I think it’s obvious now. So what’s going on with the economies and printing of money and inflation, all this stuff, I mean, these cryptocurrencies are going to have a place in the world. It’s still pretty small market. Bitcoin as you know, is coming up around $40,000.

Ralph: I remember a few years ago it was $300 a share. But it’s still a very, very small market, right? So it’s a very, very small market, but that is going to be a trend. And I think not only are you going to see cryptocurrencies come into play for payments, you’re also going to see governments start to back..

JC: And that’ll calm it down. That’ll make it less volatile. So then I guess you guys, are you guys already setting the groundwork to be able to adopt that, to be able to work with Bitcoin and whatnot? Is that something that’s kind of coming down the pipeline for BlueSnap?

Ralph: Yeah. We haven’t done it yet, but we’re setting the groundwork for it because up until recently, most of the transactions happen in cryptocurrency were transactions that weren’t tracked or traced. So the feeling was those maybe weren’t transactions that you wanted to be involved in. Now, it’s starting to become a little bit more mainstream and transactions will become, I think, less volatile and more like you say backed by countries. We think Bitcoin is backed by the cloud. No one owns it.

Ralph: If the US government or the British government comes out with a cryptocurrency, are they backed? Or even if Apple comes out with a digital currency, it’s at least backed by something that you know and trust versus what is Bitcoin? I mean, it could fluctuate in any way. I mean, it’s such a small market. It can bounce a lot on you. So there’s a lot of risk in that. It’s an interesting thing and it can’t be ignored. And I think it’s here to stay.

Ralph: Bitcoin have been around for 10 years. So it’s going to be around for the next 10 years and there’ll be other cryptocurrencies that come along. So there’s a lot of innovation coming in payments if I kind of back up to this automation and thinking as payments as part of your product and your back office to thinking about, “Oh my God, now it’s digital. How do I protect myself to where’s this thing going, using local languages, local currencies, and eventually cryptocurrencies?” There’s a huge innovation going on in payments.

Ralph: And this is kind of one of the reasons why the FinTech market is kind of hot. I mean, it’s been drawing a lot of investments. The stocks are warring. Private equities are putting money. There’s this new thing called SPACs that are gobbling up FinTech companies. So it’s a very robust market and there’s lots of different angles in it. And it’s kind of interesting. You’re out in San Jose and I have two kids that are out in San Jose.

JC: We’re out in Denver. I was saying, I grew up out in San Jose.

Ralph: Oh, you grew up in San Jose.

JC: Yeah. We’re out in Denver.

Ralph: But you’re in San Jose now. The point is, is that that the market is just funding tons of innovation and payments because there’s lots around it. There’s boarding, there’s fraud, there’s risks, there’s crypto, there’s banking. There’s millions of little pieces that go into the infrastructure that can be optimized as we go from this 20% digital to 80% digital, right? A lot is going to change over the next 10 years. So it’s a fun time to be doing it. When I started payments 30 years ago, I got to say it was a little boring. I got to say, I don’t think anyone’s bored at BlueSnap at this point in time.

JC: No, it’s exciting for sure. So listen, thanks for coming on the show. I wanted to ask you though is there anything else that I didn’t ask that you want the audience to know about whether it be industry-wise, BlueSnap? Is there anything else that you can tell them?

Ralph: Well, the best thing I could tell them is not to get overwhelmed by the back office of the payments and see if they can make that a priority over the next few years, to least automate or look at our efficiencies and handling their payments because wherever they are now, fixing it now is a lot easier than fixing it later. The bigger and badder it gets, it becomes much harder to change. And we’re seeing businesses that have many accounting systems and global invoicing, and it’s these big, huge complicated projects now to fix what they could have fixed when they were maybe a little smaller. So there’s no bad time to start it.

JC: Anyone from one from the audience if they’re interested in BlueSnap at like an enterprise level or individually, how can they reach out to you or to the company?

Ralph: Yeah, it’s super simple. It’s bluesnap.com. Everything’s online. There’s a lot of data out there. You can read up about things we’re talking about whether it’s invoicing online. There’s a form to contact someone with the information and believe it or not, I get quite a few emails myself. I’m at ralph@bluesnap.com and people reach me on LinkedIn or directly. I try to respond to everybody as best I can.

JC: That’s awesome, Ralph. Listen, thanks again for coming on the show. I greatly appreciate it. And here’s to a profitable and an awesome 2021 for you.

Ralph: Thanks. You too.

infinityadminEpi 16: How Tech Companies Can Streamline Their Payment Processes with Ralph Dangelmaier, CEO of BlueSnap