Greg: Hi, I’m your host, Greg Myers. This is episode four of the Leaders In Payments podcast featuring Ralph Dangelmaier, the CEO of BlueSnap. In this episode, Ralph and I discuss his upbringing in Boston and his journey to becoming the CEO of BlueSnap. Ralph talks about key trends in the payments industry including cross-border payments and removing friction in payment transactions. Ralph has a passion for FinTech and meeting with clients in and out of the office and has tasted wine in over 20 countries around the world. Ralph also gives some great advice to those just starting their career in the payments industry. So, let’s get started. Ralph, thank you for being here and welcome to the Leaders In Payments podcast.
Ralph: Hi Greg. Thanks for having me.
Greg: Let’s just dive right in. Tell our audience a little bit about yourself, where you grew up, where you went to school, things like that.
Ralph: Sure. I’m a Boston guy. I’ve spent my whole life in Boston. However, I’ve traveled everywhere. I think I’ve got over 2 million miles of flying to multiple countries. And my whole career has been in banking, payments and finance. I went to school in the Boston area, a small school named Stonehill, which was founded by the Notre Dame group out in South Bend, Indiana, left Stonehill and joined Bank of Boston, which is now Bank of America. And got my first sort of indoctrination into payments. We didn’t call it FinTech back then, but I was in the back office working on things like wire transfers and ACH and card processing. So that was my first entree into banking and finance. And then from there worked my way into four or five other payments and FinTech companies, which sort of got me to BlueSnap.
Greg: So let’s discuss BlueSnap. Tell us what does BlueSnap do?
Ralph: BlueSnap is a payments platform for merchants and for other sort of SAS or what we call ISV platforms to allow them to process card-not-present transactions as well as alternative payment transactions like PayPal and AliPay and Ideal and other bank transfers. So, it’s a platform that initiates payments on behalf of merchants to their shoppers or businesses.
Greg: How big is BlueSnap?
Ralph: We have about 175 people around the world. We have offices in places like Israel, Ukraine, Poland, Canada, the United Kingdom, United States for example. So, we’re fairly global company for the size we are.
Greg: And you’ve had an acquisition I think back in October. Do you want to talk a little bit about that?
Ralph: Sure. We started to do a lot of work with businesses to accept B2B payments and we noticed that it was taking a little longer and we wanted to get a business live. And what I mean by live is meaning taking the data from their accounting system, integrating into BlueSnap so that we could send out invoices on behalf of the merchant to their shoppers or other businesses. So we can process the credit card payments, so the card payments. We worked with this intermediary company called our Armatic A-R matic that automated the data flow from the accounting systems like Quickbooks, Zero, Netsuite into an automated invoicing system so that the merchant didn’t have to do any integration or coding. We thought that was kind of a fabulous idea.
We did about a dozen clients together and went live quickly. It was very successful. And so we decided, geez, wouldn’t it make sense for us to join forces so we could better promote really the automation of accounts receivable for a larger pool of merchants. And that was the product and that was the idea behind the acquisition and that closed in October and now if you come to a BlueSnap, you really can have absolutely no manual work to create an invoice from an accounting system and get paid by your shopper or business. So, it’s a real neat workflow that the two of us work together. And so now the Armatic team is now part of the BlueSnap team minutes one offering.
Greg: What would you say differentiates BlueSnap? You know, payments is incredibly competitive, but what would you say differentiates BlueSnap from all the competitors out there?
Ralph: You know, it’s never just one thing, Greg. There’s always a series of things and it sort of depends on the merchants, but we tend to focus a little bit more on merchants that are, I’m going to say have graduated from a platform like Stripe and they need a little more sophistication on the reporting side. On the reconciliation side, we’ve integrated with really cool partners like Kount and Chargebacks911 and things like Ethicon and Verify so that there’s a suite of products that these merchants can use to have a more sophisticated tool set in their e-commerce offering. We’ve also integrated in all currencies and lots of payment types and all the wallets like ApplePay, Google and PayPal. So, it’s very robust if the merchant wants to grow across borders. So usually when the merchant gets a little bigger, they’re looking for more sophistication on cross-border, on reporting, on ways to manage fraud and chargebacks. And that drives a lot of the differentiation for BlueSnap.
Greg: Let’s talk about the payments industry as a whole. And this is sort of a two-part question. Where do you see the payments heading in the next say two to three years and then let’s try to get the crystal ball out and say 10 years from now?
Ralph: So, over the next two to three years it seems like growth in cross-border is going to be phenomenal. Many merchants are trying to sell their products overseas. We recently did a survey that said the retailers’ biggest concern was not necessarily shipping and taxes because they felt there are ways to handle that really was fraud and getting the payments efficiently and low cost being done. And so that is something I think that we can’t go to a meeting or you know, hear someone talking about the strategy on cross border. And of course, we’re sort of fortunate our platform is set up to perfectly do that. The second big thing that happens to the merchants is in the past what we’ve really done is we’ve sort of made the merchant, the system integrator, not we mean BlueSnap but the industry.
We said, “Hey, we’re going to provide you like a simple API, but you better figure out your own taxes and shipping and fraud and currencies and you go get your own banks all around the world.” And so I think what the merchants are now saying is, you know, it’s a big project to go across water and integrate all these different tools that we use as a merchant and get it correct with, you talked a little bit about fraud and getting the multicurrency correct and getting your local bank and relationships set up. So, I think the push now is to try to really have that as a smaller technical project for the merchant. Because most of these merchants are businesses that really want to focus on selling whenever it may be – hats or tickets or wine or project management services, all these different folks we deal with, they don’t want to put money and developers into payments platforms.
They’d like to sort of buy it out of the box. And so I think a trend you’ll see is pre-integrated solutions, maybe, let’s call it the Salesforce model. Really Really works. And I think that’s another big trend you’ll see for merchants over the next couple of years and probably did put a third stamp on that is it’s not just the cross-border and all the things we talked about and it’s not just being able to handle the pre-integration but it’s really around getting the payment easily in the door. We’ve seen payment declines go up, so there’s been a decrease of authorization rates or an increase in declines and so now merchants are becoming aware of that more and more and you hear that discussion in the meetings. That’s a third trend I think that will pick up over the next two or three years with merchants, businesses.
Greg: Any view on the 10-year horizon?
Ralph: Sure. On the 10-year horizon, I think a couple things we see popping out. One is you’re going to see a lot bigger push to automation. About 70% of just accounts receivable is paper-based, paying bills is paper-based. So I think on the receivable side and on the payment side you’re going to see automation just continually grow. There’s a big decline in checks obviously so digitalizing that I think is a big deal. I think the other big trend, which we’re starting to see, and it’s talked about a lot, is this whole omni- channel unified commerce point where I think over the next 10 years, you will see, five to 10 years, you’re going to see almost every retail slash businesses probably going to retool their approach to shoppers, what I call the Amazon effect. So that is just really a much better experience for people.
I mean, yeah, there is still a lot of friction in the checkout process for merchants, whether it’s standing in line to buy a handbag or whether it’s trying to purchase a series of tickets online to a concert, or where they’re trying to check into a hotel. A lot of these things still have a lot of friction in it, and so I think if you can streamline that integration, create a seamless process, whether it includes your identity and the checkout coming together, you’re going to see that be a big place where investments going to happen is merchants or retailers and they’re going to retool their backend platforms.
Greg: Let’s switch gears a little bit and talk about you tell us about your journey to the role of CEO of BlueSnap.
Ralph: I guess I’ll start somewhere in the middle. I was at a company called P&H which was fortunate enough to build one of the first online business payment platform, so it was a lot of people called it a cash management platform, which initiated things like ACH and wires for businesses and was sold through banks and we put it in the cloud, I guess online in 1997 before those terms were really even used, we used to call it Windows Online back then. That was successfully deployed in about 80% of the banks around the country and so a company in 2006 called ACI worldwide and I was the CEO of that company and bought us and I became the president of global markets and services at ACI and we did a lot of acquisitions and had right exposure to global banks around the country.
What was interesting there is I met early on with some of the bigger players in the space, like the Adyen, the Braintrees and the Stripes and I saw that that was really becoming an opportunity to go into this ecommerce world and so a private equity firm in Boston called Great Hill Partners had contacted me and said, you know, we bought a company that’s genesis was in Israel and they really helped Israeli startups globalize their checkout and we think it’s something that we could bring the United States and really scale. And so, after a bunch of back and forth I decided that that was a really good next move for me and I joined BlueSnap in the beginning of 2013 so that was my entree to being a CEO – again of a smaller innovative FinTech company.
Greg: What’s your favorite part of being the CEO there?
Ralph: I think it’s the challenge of trying to innovate, work with customers, balance what you would call your limited resources, work with a really dynamic and strong team of people.
Those are sort of the fun things to do here. And really at the end the reward is watching things grow and watching your sort of brand take off. And we’ve had so many really cool things that have happened to us. I mean we raised money from another private equity firm called Parthenon Capital Partners, and they’d been really successful as long with Great Hill Partners in growing FinTech companies globally. I think what else has been really cool milestones for us is watching us do a deal with Bank of America, partnering with them and reselling our product to some of their more strategic merchants. I think also just watching us hire a hundred people, 120 people over four or five years, and trying to integrate them into the culture and the fast-paced nature of a FinTech startup like company. So, it’s been challenging, but it’s also really fun watching the company grow and get a reputation in the marketplace that I think is pretty good.
Greg: What are some of the things that you’re passionate about? Could be work related or it could be personal?
Ralph: Well, obviously I’m really passionate about FinTech. I think this global ecommerce space and omni-channel space, it’s just fascinating. We’re still in the first inning that the growth is just unbelievable. There’s so much opportunity and so many things to do. We come into work every day just challenged by our clients and by the market, which is really fun, so it doesn’t feel like work, Greg, if that makes any sense. But also, I like to travel. I like to meet our clients and I like to meet them, if I can social environments, whether it’s golfing or skiing or I tend to have a little passion around wine. Every time I go to a country tend to go wine tasting in that country. I’ve been to about 20 different countries and tastes of different wines and some obscure places, but it’s been great.
I just think that when you get to know people a little more socially outside of business meeting it, it builds a strong relationship and it allows you to understand them and so you can really direct the product of the company to servicing the customers in the market.
Greg: As you know, the payments industry or FinTech in general is a hot industry to be in. There’s been a lot of money invested in the space and honestly, it’s a great place to get a job. What would your advice be to someone just starting their career in the payments industry?
Ralph: Well that’s perfect timing Greg, because one of the things that I’m doing is working with Stonehill College, helping them build actually what we’re calling a FinTech Minor. I think one of the challenges young people have, and you know I certainly had this as well, was you don’t come out of college or university with a degree in FinTech you do in maybe, biotech or pre law or marketing but not FinTech.
So, I think it’s challenging for some of the younger folks who come in and really learn the business. And so I just was down at my school teaching a class in FinTech and I, I think it’s some of the basic information that we may know in the payments were like who issues cards and who acquires cards and what’s the difference between a card network and an alternative payment we take for granted. But a lot of people don’t really understand. And so walking students through sort of the payments flow and some of the different terms being used in the FinTech I think helps inspire people a little bit and trying to understand what’s going on in FinTech and then all the different, what I’m going to call cogs in the wheel, that offshoot FinTech, you know, things like auto boarding or fraud or chargebacks or wallets or all the different things that are going on.
There’s so many little spokes and wheels off of payments. And so I think the biggest thing that the advice I give the students is, you know, try to read articles, try to make sure you understand the current terms, try to make sure you dive in and pay attention to what’s going on in your area or with what you’re using and just trying to make aware of it so that they can come in and act a little more knowledgeable in an interview. And I’ve got some great notes from the students saying that they didn’t really understand FinTech and what it meant and they’re super interested in it and FinTech is gaining as much investment as biotech right now. It’s a real fun place to be. I mean anytime you can get into an industry that’s innovating and changing and getting this investment is amazing. I also point out, look at the investments that some of the biggest players in the world are making in FinTech.
I mean look at Google and Apple and people like AliPay now, Visa and Mastercard and FiServe. For me, it’s just so much investment, some big, big brands going into FinTech that quite frankly it didn’t really happen when I was coming out of school. FinTech wasn’t even a term back then. So learning knowledge, training, mentoring, all those kind of buzz words, you know, they are buzz words, but I think it’s something that all of us in payments could probably do a little bit better job of and helping students or people get into the career.
Greg: I completely agree. There’s a lot of buzzwords in this industry and I think we could all do more to help out those who are just getting started. That about wraps things up, Ralph. I appreciate it. Thank you for being on the show today. I know your time is very valuable, so I really appreciate you being here.
Ralph: Thanks for having me.
Greg: And to all you listeners out there, thank you for your time as well. And until the next story…