Greg: Hello, this is your host, Greg Myers and this is episode nine of the Leaders and Payments Podcast, featuring my special guest, Shaun Abraham, the Co-Founder and CEO of Transaction Insights. This episode is a little different than what I’ve been producing. Given what is going on in the US around the Coronavirus, I thought it would be advantageous to have someone on this show that could talk about the impact, both short-term and long-term of the Coronavirus on the payments industry. Shaun’s payments career includes time at both Bank of America and J. P. Morgan, and he has worked with large enterprise companies to help them understand trends and opportunities in the space. He has a deep expertise in market intelligence around the payments space and has been a presenter, panelist and moderator at numerous events. It’s an uncertain time, but it’s also a time where we all need to stay informed both personally and professionally. So, let’s get started.
Greg: Thank you for being here and welcome to the Leaders In Payments podcast.
Shaun: Thank you so much for having me
Greg: Tell our audience a little bit about your career in payments.
Shaun: It’s been a wild ride and I think, like many others in the payments space, often say, I didn’t choose this path. This path chose me. I’ve always been an entrepreneur at heart, and I think that that really stemmed from my first kind of entrance into entrepreneurship when I was 18 started an events management company while I was getting my computer engineering degree. That kind of gave me a foundation and an interest in commerce and business. So that led me to want to pursue business school to kind of round out what I’ve been learning from doing my business and more of a practical sense. And then, out of sheer proximity, I was able to get into a leadership development program at the Bank of America in Charlotte, and that really opened my eyes and kind of changed my life, really introduced me to the world of e-commerce into corporate strategy, corporate development, M&A activity, working with some great leaders, mentors and peers. For many years there, Bank of America and we worked on a number of things. Everything from the emergence of Internet banking, online banking to mobile banking all the way through to early days of mobile payments. I often say, before mobile payments became cool when we were just doing stickers and sim-based payment technology to make payments. But really a fascinating time in my life – learned a ton there and then had the opportunity to move from Bank of America over to J. P. Morgan and kind of see the other side of the equation of any kind of payment, which is the acceptance side. So spent the last seven years at J. P. Morgan’s Merchant Service’s businesses, leading market intelligence and enterprise marketing. Well, that really kind of solidified what I think is kind of one of the biggest opportunities in the space and kind of pushed me to partner with one of my original mentors, Wendy Humphrey and another colleague and friend, Chris Scheidel to established Transaction Insights, our current business really centers around this massive opportunity to give clients the ability to be in the know, understand what’s happening in their particular space, equipping them with the information that matters when it matters, so they could make the best decisions possible. So, all that was just a fascinating ride and kind of stemmed from proximity, and kind of a chance to get into payments. I often say I got kind of a dual degree in banking and payments from those institutions you know, bachelors in banking from Bank of America, the masters in payments from J. P. Morgan. I consider those Ivy League schools, by the way.
Greg: Absolutely. Obviously, part of what you’ve done in what you’re kind of passionate about is following industry trends. And now, of course, you know with what’s going on with the Coronavirus and how it’s affecting the payments industry. Can you talk a little bit about the impact of that on the industry as a whole?
Shaun: Absolutely. Just being in this kind of unprecedented time and faced with just an impressive challenge, it’s fascinating to first, I’ll just think about the widespread ramifications of Covid-19, Coronavirus and clearly on any kind of seismic event like this, you see kind of near-term and long term economic impacts? The market data from other events, I think, point to the fact that you see kind of a spike in commerce during the what I call the prepping phase of things. And we’re seeing that too. Now, if you try to go buy toilet paper, you will know what I mean. But then you’ll see kind of this lull naturally afterward from people start to hunker down a little bit and I think things like discretionary spending in certain areas, in this case, probably short-term impact on physical retail and then possibly kind of broader impact in spaces like entertainment that we’re seeing where you have just sports leagues, deciding to delay events and such. But it’s hard to kind of talk about it, given that this is different. This is not a hurricane, you know this is not a typical kind of natural disaster, so the long-term impacts are unknown. At this point, there’s not a lot of track record there. At the same time, there are a number of really interesting subplots that I think are worth considering. One of those being the space, Greg you’re very familiar with as well, contactless payments. There’s probably never been a more appropriate time to call those contactless payments – kind of the essence of what they were meant to be. Today that’s bringing your mobile device, perhaps for your Apple watch close to a terminal to make a payment. But you know, who knows where it might go in the future when it becomes much more seamless and more about identity and verification, as opposed to this physical device that has to be either pulled out of her pocket to make a payment for swiped or dipped whatever might be. that, to me is interesting. Is this a pivotal time for contactless payments, but we didn’t really see that kind of make the move. So that’s interesting. The other one is around just the rise of Fintech becuase I think this is a great test bed for Fintech companies to really prove themselves, and we’re seeing some success and we’re also seeing some challenges. For example, they came up in the news of the last couple of weeks with markets going up and down and high volatility there, RobinHood was in the press for having issues with their mobile app. Their customers need to be able to take advantage or protect themselves. You know, you’re real-time as they’re trading in the market, and having issues like that, I think, really test the mettle of Fintech companies that are out there. So therefore, really, I think if you’re a Fintech you’re listening in, this is actually a great opportunity to prove yourself and to really to ensure that your business is built for the scale of the volatility of the business that we’re all in.
Greg: Absolutely so any sense of sort of recovery time. I mean, when you look at China, it seems as though things are settling down a little bit there and who knows how quickly that may happen here in the U. S. But any sense of sort of once that starts happening sort of what’s going to happen in the industry or how that will affect the payments industry specifically?
Shaun: I call that the trillion-dollar question and you’re right there are some kind of historical trends, perhaps that we could look at even China in this case and look at their recovery curve as a potential proxy, which would be one way to think about it. And if you did, if you look at, I think it was this week, Alibaba had said that their logistics and distribution volumes are back to pre-Coronavirus levels. And so, if you think about the first case in China was somewhere in mid-November is what they’re saying now all the way through you’re talking about four months roughly, which is quicker than most people would have thought. But obviously it’s hard to tell right. What trajectory are we on here in the U. S. Compared to other countries that we’ve seen of China or South Korea? Or, you know, the kind of worst case with Italy. But there’s also, I think, some other questions that need to be thought through, which is what really signals that recovery. Is that the warm weather, as we talk about potentially having an impact on this, at least in the short-term, is a decline in known cases, is it the creation, or at least the announcement of a vaccine that starts to kind of get us moving in the right direction. So, a lot of that still unknown, obviously hard questions asked. But I think tracking these things and making sure that we are prepared knowing how other countries have performed would be a good start.
Greg: You touched on a couple of verticals or markets. You mentioned entertainment and a few others. Are there any others that will be greatly impacted? I mean, obviously, I think it’s impacting almost everyone. But are there any specifically that you can think of that you want to talk about?
Shaun: I think you’re right. Everyone’s impacted, every vertical here, the more obvious ones, obviously being hotels and lodging, airlines. I think Delta recently announced they are cutting about 40% of their capacity, and that’s unprecedented, that even didn’t happen during 911. So, a lot of drastic kind of decisions being made in those kind of industries cruises, entertainment, physical retail all being impacted here. I think the more interesting piece of this is the tentacles or almost the cascading of those decisions at the corporate level, kind of the rest of the ancillary businesses or commerce, whether it be cruises impacting kind of the ports that they serve and the businesses around them or just generally think about small businesses around corporate locations. If employees are working from home, folks are not going into their local cafes and restaurants or what not. And, you’re saying that trickle-down effect really being, I think the next wave of impact here. If there’s a positive side to some of this, when I think about industries in e-commerce is definitely one to think about. I think this could be potentially a boon for e-commerce more than just a temporary spike. Does this further kind of shift some of that de facto shopping online? I think it’s something to consider. I’ve heard that Amazon’s distribution centers have given their employees over time during this period for the last kind of a couple of weeks and in the near future. And all of that just points to increased demand for online purchases.
Shaun: As bad as all this is I think everyone’s pretty confident that it will pass. Is there a silver lining in this whole thing that you want to talk about?
Shaun: There is at a human level I think because we all kind of connected to build up the companies that exist today as human beings. And you know, there’s this opportunity or this value I think in just having the time to stop and think about the effects and the importance of our roles in the companies that we worked in no matter if you’re in middle management or leadership doesn’t really matter we all play a role there, and I think this is one of those moments to kind of evaluate things both at a personal professional level, motivations and vision as well as an opportunity to grow as an individual. To learn more. What are the roles that we are play in solving big problems in really pushing our industry forward. Then more the immediate kind of mindset, how do we become champions of change for good and play our part in this epidemic?
Greg: And I know through your work with Transaction Insights that you guys were putting together some information that talks about the impact of the Coronavirus. Can you talk about that a little bit?
Shaun: Absolutely yeah. I actually, if it’s all right, start with just anchoring everyone on what Transaction Insights is and then I’ll definitely share some of the things we’re doing to play our part.
Greg: Go for it.
Shaun: Transaction Insights was formed by industry practitioners from the payments, financial service and insurance world. We represent folks that have held leadership roles or member rolls across industry, associations and events and all of that to say that we’re not consultants per se. But we’re operators who walked in our clients’ shoes, and we faced many of the same challenges they have. Our fundamental principle or perspective is about familiarity with those that we support in our business. What it centers on is a market intelligence platform. We developed this platform to help enterprise organizations find what we call the signals through the noise. But because of that immense flexibility of our platform, we just announced that we’re going to adapt our platform and our insights to deliver information that relates to banking, payments and insurance related to the global pandemic around Covid-19. And so, we’re going to be pushing out this information through LinkedIn and on our website. So those that are interested in learning more about the impacts and the information that’s happening there, whether it’s competitive or just general market movements as it relates to the pandemic check us out on LinkedIn or just come to our site.
Greg: And then outside of the Transaction Insights and what you’re doing is providing information. Are there other initiatives that you guys were working on?
Shaun: We’re expanding our presence in providing that kind of rapper of staying in the know to a myriad of industries today. That’s everything from Fintech, to competitive movements in the insurance space and Insuretech space or Regtech space. And so, the flexibility of our platform and our ability to operate as industry experts using some of the most advanced technology to provide those insights really are kind of bread butter.
Greg: We’re about to wrap up. We’ve covered some ground here on the Coronavirus and its impact on the industry. Any final thoughts for the audience?
Shaun: I think this is a critical point, and Covid-19 highlights this – and that is it is incredibly important to stay in the know and understand what’s happening in your space so that you’re able to be well equipped to make decisions, and that’s kind of a fundamental thing here, both at a personal and professional level. I think about these industries moving faster and faster and becoming more complex. And all that makes connecting the dots harder in with that kind of layers in a growth and kind of fear and apprehension about what to do next. And so, I think it’s really important to find a way to stay informed with the level of objectivity that kind of alleviates some of that fear and helps everyone make quality decisions. It’s really important, and I think, as far as feedback and thoughts just round those that are, we’ve all been there right, just entering this space of payments. I could just say that I’ve been in it for over a decade and I still have so much to learn. So, if you’re just coming in, make sure you learn. You listen, you ask questions. You know, there’s a lot of great insight from incredible mentors and just veterans in the space. And there’s that other side of that equation, if you’re a veteran in payments, I tell you it is so important to gather your thoughts and share them with a broad audience. You know, Greg, you’ve built this incredible platform here, and I think this is an example of bringing some of that knowledge to the masses. And we’ve got great tools to do that. Great people to do that. I think this idea of what might seem like common knowledge to those that have just been in this game for a long time might be that kind of colonel to spark the next great idea in our industry. So it just takes the right young mind to maybe plant that idea and really scale it to really make your impact on the world.
Greg: This has been great information, and I’m sure the listeners are really going to appreciate you taking the time to do this. If someone wanted to get in touch with you, how could they do that?
Greg: Well, Shaun, thank you for your time today. I know it’s very valuable, so I really appreciate you being here.
Shaun: Thanks for the opportunity and I love what you do. Thanks Greg.
Greg: Appreciate that and all you listeners out there Thank you for your time as well.