Greg: Hi Brandon, thank you for being here and welcome to the Leaders in Payments podcast.
Brandon: Hey Greg, it’s great to be with you. Thanks for having me.
Greg: Thank you. Tell our audience a little bit about yourself. Maybe where you grew up, went to school, where you currently live. Maybe a few things like that.
Brandon: Yeah, sure. So, I actually, as you can probably tell from the accent, I didn’t grow up in the United States. I grew up in South Africa. I did electrical engineering at college. I moved to the States about 14 years ago. Now, I was based in Dallas initially when I moved to the U. S. I’m now currently based in Overland Park in Kansas.
Greg: Okay, great. Let’s pivot a little bit and talk about MSTS. Tell the audience exactly what MSTS does.
Brandon: I think. Yeah, thank you for that. I think the best way to describe what we do is if you’re a seller and you’re dealing with business to business buyers and you’re trying to figure out how to help your business grow and really, how to be in a position to offer payment terms to those customers. Then we’re a company that can either help you do that through some of our technology, and some of our service, or we can actually also help you with the working capital and taking on the credit risk. So, the simplest thing, the simplest way to think about it is we’re like an accounts receivable department in a box, and it’s the reason we’ve branded a lot of our service that we’re offering – we call it Credit as a Service.
Greg: Okay. And how big is the company?
Brandon: We process just right around $6 billion a year worth of transactions with our various customers on our various platforms. We have about 1/4 of a million buy side customers that we deal with. We have about 12,000 sellers that we work with. We operate in 24 countries. We operate in 19 currencies. So, for this business that’s based in Overland Park in Kansas, we’re a relatively global operation. We’ve got some pretty interesting global customers that we work with and really, I think on the cusp of becoming a much larger businesses as we go forward.
Greg: Great. You mentioned Credit as a Service. I just wanted to maybe dig a little bit deeper into that. I don’t think that’s necessarily a term a lot of people have heard. So, could you maybe explain that in a little more detail?
Brandon: Yeah, sure. So, when we were trying to come up with a name for what it is that we do, we felt like that was the name that might resonate the most with prospective customers, with people who are trying to understand and navigate the space. So, in detail, what we do is we do everything from the initial credit and on boarding process for a new customer all the way through to the production of the invoices and their collections of the money from that particular customer. So, think of yourself as a seller, if you’re a B2B seller, and you have a number of customers that you interact with. Those customers typically want payment terms, so they want to be able to pay you in 15 days, 30 days, 45 days, maybe 60 days. So, there’s a credit offering that you have to have. There is working capital that you have to deploy. Also in the B2B world buyers are becoming more and more specific around wanting specific data on the invoices that they received from users. They know where to send them in accounts payable in a way to process the payments, too. And so, we really take all of that headache away from you as a seller. We can literally do all of that for you. We can do the credit and underwriting. We can do the onboard the buy side of the customers. We can produce the invoices of your behalf. We can integrate the invoices into your buyers’ systems. We can provide you the working capital so we could pay you in two days as a seller, even although there might be 30 days or 45 day terms with your buyers and then we ultimately take the risk of collecting the money from the buyers.
Greg: Got it. That’s a very intriguing product and obviously it’s in the B2B payments world. Are there certain segments or industries that it works better or is it pretty much anyone that is sort of a business that’s buying and selling – it makes sense to look at.
Brandon: Yeah, great question. Interestingly enough, we’ve had a lot of success in a couple of verticals like you’re suggesting. So, we specifically have had a lot of success in the manufacturing sector, and the reasons for that are that in the manufacturing world, there’s often a complicated, multi-tier set of relationships. You’ve got someone who’s making the products, you have a distribution channel, and then you have the end customer. And very often, if you have end customers that are very large, they are typically going to want to negotiate deals directly with the manufacturer. They usually don’t do them with the distribution channel. And so our solution fits particularly well in that scenario, where if you want to be able to, for example, offer uniform pricing to a specific large national customer and your the manufacturer but you’ve got independent dealers or distributors all over the country that might be actually selling on your behalf, it’s very difficult to execute a nationally price contract like that without working with someone like us that can actually help produce the right price and put the right data on the invoice for that national customer. So, we’ve been very successful in the manufacturing sector, and that’s the one use-case of manufacturing. The other use-case in manufacturing is there’s a lot of companies that are exploring whether they should be going more direct in terms of how they approach their customers and whether there’s some of the existing distribution channel’s that still makes sense for them, and when they do that, they essentially run into a problem of they’re not typically used to breaking the bulk, so to speak. They’re not used to dealing with thousands of end customers and thousands of credit lines and everything else. And so, we fit in that world very well. Just quickly, one of the other verticals that we’re very successful in is retail. So similar story you would expect most retailers obviously b2c businesses, but almost all retailers we talked to there’s an element of their customer base that’s B2B, and there’s an increasing focus on how they can target that B2B customer base directly. But if you think about a retailer’s competency set, they really are not necessarily geared to do credit and underwriting, to have specific pricing by customer, to onboard customers in that fashion. And so, we fit that market very well as well. And then the last point I’d make is we also work with anyone really that has an e-commerce website. So, anyone who is selling to B2B customers that has an e-commerce site, and they want to offer a paying on terms option, in other words, have an account with the buyers – that they have an account with them as the seller. We fit that model very well as well.
Greg: Okay, great. Thanks for going into that detail. I did notice on your website that the company, or at least the service somehow originated out of the fleet business. So, can you talk about that background a little bit?
Brandon: Yeah, sure. So, we’ve actually got a really interesting history to your point. The company started out in the seventies, so the company’s been around for a while. It started in the late seventies, and during that time, the energy crisis was going on in the U. S. and the original founder of the business owned a fleet, and he was trying to figure out how to basically prevent fraud and also find a more efficient way for paying truck stops when his fleets were traveling around the country. And so, basically at the time created the idea of a fuel card. In other words, an ability for someone to pay for fuel specifically at a truck stop. And that was a pretty innovative idea and a lot of the competencies that you have to have in offering a solution like that we’ve been able to morph, extend and move out into businesses like manufacturing, moving to retail and other e-commerce solutions that we have.
Greg: Okay. And you, in your description there you mentioned the word crisis. I think we’d be remiss not to sort of mention what’s going on now globally. Do you have any thoughts on that? Anything you wanted to say about your business and how you guys were dealing with what’s going on?
Brandon: Yeah, I think it is kind of hard to now switch on the television station or look at any news with the pandemic we’re dealing with not being completely front and center. From our point of view, we’re dealing with it in two ways. On the one hand, we really are in the fortunate position that almost our entire team, almost our entire workforce, is able to work remotely. And so, we put everybody out into remote work as of last Friday, and it’s actually working remarkably well. I think that we’ve even been pleasantly surprised, sort of the ease of transition and just having everything work the way we thought it would. So that’s what we’re doing in terms of our staff and making sure our staff are healthy and able to basically distance themselves, socially distance themselves. In terms of the customer base that we’re working with, obviously, we’ve really been taking some interesting measures around credit lines and available credit for several key customer segments that are really spending more than they usually would right now. So, some of the buy side customers that we have in the different programs that we run are places like school district, so places like hospital groups, places like first responder groups. And so, we’re making sure that those segments of the buyer base really have enough credit to be able to, for a school district and all the kids were going to need to be learning or working remotely. A lot of the school district’s these days provide Chrome books, or iPads or other digital devices for the kids to be able to study remotely. So, we’re making sure that they have enough money to be able to go out and make those purchases. And then similarly, with the hospital groups that are obviously really trying to gear up and stockpile for whatever eventuality we end up in with this virus.
Greg: Okay, yeah, it’s what I’ve heard from other CEOs that I’ve talked to is they have been surprised, pleasantly surprised at how people have really embraced the work from home. And productivity seems to be what they expected. So, I think that’s all positive for all of us. And then to your point what you guys were doing to help companies right now that need that help. I’m hearing about that and reading about that across the U.S. Really everyone, it feels like we’re all in this together and we’ll come out better at the end.
Brandon: Yeah, that’s exactly the experience that we’re having as well, you know, really good productivity. And I think also just to your point around the whole country pulling together around this and saying that this is a crisis that you can’t solve individually. We’ve got to solve it collectively. And it was pretty inspiring last Friday to see the CEO’s of some of the top companies in the US really banding together on offering their services, or availability of their parking lots or whatever to try to help stem the tide here and get more people tested, to get more people in front of doctors. It was pretty inspiring to watch that. And so, in a small way, we trying to do our piece for that as well.
Greg: Yeah, I agree. I watched that segment of the different CEOs, and there certainly was no vibe about worrying about the competition and knowing what the competition’s doing. They were certainly not in that mode at all. Which leads me to sort of the next question. Getting back to MSTS a little bit, obviously everyone has a competitor, so what makes you guys different or better than your competitors?
Brandon: Great question. So, I think the primary differences is that we really offer a turnkey solution. If you look at other alternatives to us, you’ll find players who will offer the technology or they might offer the services, or maybe they do the technology and the services, but you very really will find someone that offers the technology, the services and the working capital. In other words, all three of those components. Now you know when we work with customers, they don’t necessarily take all three of those things from us. They might take two of three, but that’s one of the things that I think makes us unique is that we can literally go to a seller and say to them, you can completely outsource your accounts receivable function. We can do everything for you, and we can free up working capital that you might be deploying to offer accounts to your customers. And so that proposition resonates very well with CFO’s. It also resonates very well with the line of business owners, or CEOs, who are focused on how they can grow the business, because very often you’ll find that if you’re a seller, one of the barriers you have to increased sales is your ability to underwrite new customers, is your ability to extend credit and take on credit risk. And it’s we believe our purpose as a company is to help sellers grow. And so that’s a big focus of everything that we do. And I think that’s what makes us different.
Greg: Okay, great. Let’s talk about the industry as a whole and looking at the whole payments industry. I know you guys play in a very unique space of that. It’s a little bit challenging to think about right now with what’s going on, but maybe give some thoughts on where you see things headed in the next say, 2 to 3 years.
Brandon: Yeah, great question. So, you know, I think there’s a couple of trends that are obviously front and center for all of us who are in this space. One of them is that they’re really seems to be an uptick in fraudulent activity in the B2B space. I think for the most part, a lot of the fraudulent activity we’ve seen in the past has been b2c related with things like credit cards. We’re actually seeing a fair amount of business impersonations taking place. So just like you would experience identity theft as an individual, we’re seeing business identity theft occurring. And so, I think that’s a growing trend that is going to have to be systematically solved by the industry, by players in the industry. And so, we watch that very, very closely. I think the other obvious trend is that there’s an increasing automation and digitization of many of the manual processes that have existed for a very long time, and that could be just sheer how you do credit underwriting for new customers, that could be how you actually move the money around. And there’s a big revamp coming to the whole national payments infrastructure that I think is going to change the way money flows can occur and the speed with which they can occur. There’s also a role for something like Blockchain to play in the industry. I think there’s a lot of people experimenting with it and trying to decide which use cases make the most sense for a distributed ledger. So I think there’s a lot of dynamics that are at play at the moment, whether it’s these external forces like fraud or these technology forces like Blockchain and I think it’s going to create a lot of interesting new opportunities as we go forward.
Greg: Great. And if you had a crystal ball, what would you look into that and say, hey, 10 years from now, how does just start to look?
Brandon: Yeah, you know what’s most interesting for me at the moment is that some of the, I think, a lot of the innovation in these spaces has been dominated by smaller players by Fintechs, by startups for a long period of time. And some of the recent announcements with Apple and Goldman Sachs as examples, I think start to really start to point toward some of the really big industry players making moves in this space and starting to become, Fintech players. Somebody like Apple is a great example. So I think there’s going to be an increasing blurring of the lines of technology companies that have scope to become payments companies, you’ve obviously already seen it with companies like Wal Mart and other large retailers that have also had forays into payments and banking. And so I think that trend is probably going to continue and the more the technology evolves, I think, the more likely and the easier that is going to be for those sorts of players to basically leverage either their existing infrastructure, their customer bases or just the access that they have to capital. So, I think the space is going to continue to receive a ton of investment. And I think there’s potential for players to come out of nontraditional competitive spaces and some really big players who I think could enter the market in the coming years.
Greg: Yeah, I think that’s some great insights. We’re going to switch gears a little bit and talk about you. So, tell us about your journey to your role as the President there at MSTS.
Brandon: Yeah, sure. So, like I said, I grew up in South Africa. I did an undergraduate and a master’s degree in engineering. I’ve been involved in technology centric businesses through most of my career. My very first role was actually working in a start-up business that became the largest Internet service provider in Africa. So I started with that, then became involved in really a lot of the Web technology and web platform work that was being developed in the nineties that evolved into running a marketplace business that was based in South Africa. And then ultimately that company, which was headquartered in Dallas in the U.S. they moved me to the U.S. 14 years ago, and I was the CEO of that company. We sold that business to Ariba, and then a Ariba was eventually acquired by SAP. I went along with that whole journey, so work for SAP for a couple of years and then most recently joined MSTS and what I’ve kind of loved about and what I thought was really interesting about the business that I’m at now is that I thought the payments space was going to be one of the new horizons that was going to be one of the new spaces where a lot of innovation was going to occur with those could be a lot of scope for for really creating new markets, creating new niches and so that’s really the journey we’re on at the moment.
Greg: Great. So, what is something you’re passionate about? It could be work related or personal, or maybe one of both.
Brandon: So, from a work point of view, let me answer it that way first. I think one of the things I enjoy and love doing the most is development of people. We’ve got a fantastic team that I work with, and it’s been really fun to basically pull that team together and really get that team performing well. And so building, fine tuning, creating leadership, I think, is something that I personally, really enjoy. From a personal perspective. I’m an absolute sports nut. I’ve adopted the Kansas City Chiefs when I moved here five years ago. Obviously, they just one there second Super Bowl in 50 years, which was fun. Yeah, I love playing golf. I love playing a couple of other sports, skiing and what have you, but really, I am a sports nut. That’s one of my passions as well.
Greg: So not a Cowboys fan?
Brandon: I obviously having lived in Dallas for a long time, I became a Cowboys fan, too, so I convinced myself that it’s okay to have an NFC team and in a AFC team and that that’s not a conflict of interest.
Greg: There you go. That’s a great answer. So, you know that the payment space has really taken off in the last few years. A lot of people are getting interested in actually working in it as a career. I think most people sort of feel like they fell into it. But I think now that even some colleges are starting to teach Fintech or payment type classes that more and more people are finding jobs and careers in that space. What some advice that you would give someone who’s sort of just starting out or just coming into the industry now. What would you tell them they need to do and think about?
Brandon: Yeah, great questions. So I think from our point of view, there’s really two main groups of personnel that you have that work in Fintech businesses like ours. You obviously have the software engineering track, and we employ about 180 software engineers in our business. And so that is a more sort of typical computer science or even engineering background. That’s what we typically look for with those sorts of personnel. And for us, what’s obviously really important is not just the technical competence, but being able to work well in teams being able to work well in a distributed environment because we increasingly have teams that are spread throughout the world. We’ve got a team in Australia, a team in Europe, we’ve got a team in the U. S. And so if you have that sort of structure, you need to be able to communicate well. You may be a be able to operate well in teams, so it’s not just the technical competence. It’s also being flexible in being able to work in that manner. And then the other major group of personnel that we have are really the more business and customer support centric personnel who are talking with accounts payable personnel who are managing accounts, our accounts receivables, doing the credit and underwriting. And so there’s a number of different ways that you can acquire that skill set. Some of it might be with the general business and finance degrees, and so we typically see the personnel that we get into those areas have come up through those sorts of degrees in college. But we also actually, we have somewhat of an apprenticeship model that we deal with as well in some of those areas where you know the life experiences of knowing what to look for, you can learn those. You don’t necessarily have to explicitly learn them at college. So we have a pretty good trainee and trainee development program for new personnel coming in that we’re hiring in those areas.
Greg: Great. So, we’re about to wrap up any final thoughts for the audience.
Brandon: I think, you know, from my point of view, I think this I’m obviously really passionate about this space. I think the space has the ability to really have a direct impact on mid-size and smaller businesses. You know, when we look at our purpose and what we’re trying to do as a company, helping businesses grow is a key theme for us. And I think one of the dilemmas and challenges you have as an SMB is access to capital and access to capital at rates that make it viable for you to operate and run your business. And so what we love and what we’re excited about is that ability to help those businesses grow. And I think that, you know, coming out of this crisis, that we’re in, coming out of this pandemic is going to be even more of a need for any and all of us to help a lot of these mid-size and smaller businesses recover. And so that’s going to be our mission. That’s going to be one of the key things we focus on.
Greg: That’s great. Thank you so much. Well, Brandon, I really appreciate your time today. I know it’s very valuable, so thank you for being here.
Brandon: It’s a real pressure, Greg. It was great chatting with you. Thank you for your time.
Greg: Absolutely. And all you listeners out there thank you for your time as well. And until the next story…