Greg: I am your host, Greg Myers and this is episode two featuring Tom West, CEO of AffiniPay. Tom’s a big Indiana basketball fan, but now lives in Austin, Texas. We’ll be discussing the products and services that AffiniPay provides primarily to accountants and attorneys. We’ll also hear where Tom thinks the industry is headed and advice for those just starting out. So let’s get started.
Hi Tom. Thank you for being here and welcome to the Leaders in Payments podcast.
Tom: Thanks for having me, Greg. Happy to be here.
Greg: So let’s just dive right in. Tell our audience a little bit about yourself, where you grew up, where you went to school, where you currently live, things like that.
Tom: Sure. Happy to do it. Well, I’m originally a midwesterner from Fort Wayne, Indiana. Grew up in Indiana, which is basketball country. So became an Indiana basketball fan early on and ended up going to Indiana University. It was not until probably in my thirties that I ended up moving down to Austin and it was, it was pretty unique for us. I came down here to join Dell, kind of back in the gogo days when Dell was really growing and it was quite a culture shock to come from basketball country to football country here in Texas. But currently, I’ve lived in Austin, Texas for the last 20 plus years and you know, we absolutely love it.
Greg: Great. So are you a big Bobby Knight fan?
Tom: You know, I am and I know it’s controversial, but I was fortunately there for the 87 championship and it was, one of the best experiences I’ve had. It’s just unfortunate that the Hoosiers haven’t made it back to the championship since.
Greg: I’m sure they will. I’m sure they will. Yes. Now let’s just discuss AffiniPay. Tell me what your company does.
Tom: AffiniPay is the leader in payments for professional services. So we view ourselves as powering payments for professional services. And what that means is we’ve created vertical specific solutions to allow lawyers, CPAs, and associations to accept credit card and e-check payments into their firms and practices.
Greg: Okay. And you have specific brands for those different verticals?
Tom: Yes, we do. Yes. In legal our brand is LawPay. For CPAs it’s called CPA Charge and with associations it’s called AffiniPay for Associations. And those are the three vertical markets that we’ve specifically built our platform around.
Greg: Okay. So how big is AffiniPay?
Tom: Well, we’re very fortunate. We’ve been in existence since 2005 and have really been growing with these markets. We’re up to over a hundred thousand customers on our platform.
Greg: Okay. And what would you say differentiates your company from the competition? We know payments is very, very competitive. So what would make you better or different?
Tom: Payments is competitive and it’s increasingly becoming a commodity. And I think what makes us very different is that we are designed specifically for our vertical markets. We integrate with all the leading ISV in those verticals. You know, for example with LawPay, our solution is fully IOTA compliant, which is really about, it’s a trust accounting ethics requirement that all lawyers are subject to and something very specific to, you know, how they take payments into their trust account. And you know, we’re fully IOTA compliant. Plus we’re integrated with over 40 legal software solutions and it is approved and endorsed by all 50 state bars. The ABA, the Canadian Bar, you know, we very much partner with the industries we serve in order to better solve the problems and the challenges and the workflows of those specific industries.
Greg: So talk a little more about that sort of vetted in that process. What does that like to go through?
Tom: t’s pretty intense. Some of our, the ABA for example, spent four years looking at our technology. They talk to customers that were on the technology. They talked to partners that worked with us. They looked at our methodology and approach to compliance in a great amount of detail before finally making the decision that we were the solution they wanted to recommend. And they don’t take their recommendation lightly because you know, the lawyers look up to the ABA, they look to the ABA for guidance, they look to their state bar for guidance in a similar way because states have different laws and subtleties that they need to address. And so we take those relationships very seriously and are really proud to have had all 50 States, uh, select us as the solution they recommend.
Greg: Okay. Yeah. So in my past life, you know, we had partnerships at various companies that I’ve worked for with different associations and it was often just sort of a referral kind of deal where you just, you know, got a list and you market it to that list. How do you guys approach that?
Tom: Yeah, it’s really, I think ours is, is very different than that. The state bars particularly and the ABA are really engaged in trying to create value for their members. And it is our job. We view it as our job as their partner to help create value for their members through payments. And so we spend a tremendous amount of time with them helping to understand what are the issues and the challenges in the world of payments and we write content articles as a result on those issues, opinion papers if needed as they’re related to different laws and things that may be changing in the case law that’s occurring. And then we really try to help them by supporting all of their events. So we’re frequently not just sponsoring their events, but we will be a keynote speaker or in there trying to help them create more value for their members, which ultimately is about creating better law firms, better CPA firms, better performing associations. Those are the, that’s really the end state goal for the state bar, the state CPA society.
Greg: Okay. Where do you see AffiniPay heading in the future?
Tom: Well, we’re just really getting started. Even though we have a large number of folks on our platform, there are a lot more that need us. We have about one in five lawyers on our platform and believe it or not, there’s still quite a few that don’t accept cards at all. Don’t accept electronic payments. We are very much an industry that is behind the times in terms of adopting technology.
The legal industry particularly is behind, and you’d be surprised, even some of the folks that are accepting cards tend to use a PayPal or a Square reader and don’t even recognize that those things aren’t IOTA compliant. And so there’s a lot of education for us to help those firms understand the power of electronic payments and what that can bring to their practice in addition to helping them get compliant, both PCI and IOTA compliant.
Greg: Okay. Let’s talk about the payments industry, the larger industry. This is sort of a two-part question. Where do you see it headed in the next two to three years and then maybe out 10 years from now?
Tom: Sure, sure. Well, I think in our industry, because our folks are so far behind in the adoption curve, the next two to three years is that process of recognizing the power of payments and what electronic payments and what that can mean is, you know, think about the situation where the typical attorney does their work for you. And then they may be 30 days after they’ve completed the case, they will bill you, most will send you a PDF invoice and then their hope is that you send them a paper check in return. And not surprisingly, that process breaks down quite a bit. And lawyers really struggle to drive collections and typically have to discount bills the further they get away from kind of the original due date. And if you take that and you compare it to our payment links, when our payment links are sent to clients, the average 57% of our payment links are paid within the same day that they’re sent with an average payment time of two hours from the moment that it was sent to the moment that it’s paid in full. And it’s a really powerful difference that these firms start to feel in the, not only their collection rates and their cash flow, which are really obvious benefits, but also in the amount of time they’re spending.
Because what typically happens is they’re having to follow up on these invoices again and again and again. And you know, attorneys, CPAs are paid by the hour. And so if your billing rates $500 an hour and you’re spending an hour on collections, you’ve just lost $500 in revenue that should have been spent elsewhere. And so our belief over the next two to three years is that we can really help educate attorneys on how we can more automate their billing practices and allow them to spend their time focused on driving billable revenue.
Greg: Any view on 10 years out?
Tom: Yeah. You know, I do think that payments, we certainly have a vision for what we believe the payments world is going to look like in professional services as we go through this transformation. And it, you know, very much our vision is around the seamlessness of payments, that it just becomes integrated behind the scenes. I mean very much like the experience of today when you take an Uber and you realize that you know the driver is not, you’re not worried about the payment, the drivers and worried about the payment, the payment is going to happen behind the scenes. It’s really about delivering the service and we very much believe that professional services can move to that model over time where they can focus on really just delivering value to the client and the client and receiving the best possible value versus you know, worrying about the invoice and the timing and the likelihood of payment. And I think that’s where we’re trying to work towards. We work with all the leading ISVs in each one of our verticals to help power their payments inside of their solutions. And that’s a big part of how we’re trying to make it just seamless. Wherever you’re working, wherever you are, tracking your time, wherever you’re managing your caseload, it will be very easy for you to integrate a seamless electronic payment into that process or workflow. So you no longer have to worry about will I get paid. It’s more about let’s do high quality work.
Greg: Yep. Makes sense. Makes a lot of sense. Let’s switch gears a little bit and let’s talk about you tell us about your journey to your role as the CEO of AffiniPay.
Tom: Yeah, thank you. It’s um, it’s been a fun journey. My background really is, I’m a long time digital and ecommerce leader, so I’ve run a number of ecommerce companies. I was fortunate when I came to Austin to get involved with Dell.com very early and grow that business. And so that’s really been my background. And I was running a company called Springboks, which is a digital agency here in Austin. When I had a chance to work with AffiniPay back in 2013 and the AffiniPay founder, an amazing woman named Amy Porter. And Amy hired us, hired me and our team to really build the first lawpay.com where that was back in the day where we weren’t sure that anybody would sign up for an electronic payments account online. And you know, we envisioned a model that really had the ability to drive people through what we call the frictionless process back in 2013 and so I, I had a chance to work with Amy really for the last five to six years as a partner and when she was looking for that next chapter leader to take the business and continue to grow it to that next level, I was a very logical choice in that I already knew the business and had the right skillset from a direct marketing perspective to be able to help grow it and help serve our professionals in the way that she had been serving them. You know, throughout the growth of the business. I’ve been here for about a year and a half and it’s really been a fantastic journey for me, getting to know our customers and our partners and really transforming the way professionals get paid.
Greg: Sure. So what’s something that you’re passionate about, whether that’s work related or not? I think I may know basketball might be one of your answers, but I’ll let you answer that.
Tom: You guessed that for sure. It’s hard to be passionate when you’re not as successful as you’d like to be. But, uh, I would say on the business side, I’m really passionate about culture and I believe that in order to create a great customer experience, you have to have a passionate team that authentically, truly believes in what they’re doing, the product and support that they’re providing and the end state outcomes that they’re creating, truly solving a real problem. And we have a real problem in the professional services world. And what’s most fun for us is I always say we have the best job in the world because we do, you know, the lawyers or the accountants do all the hard work and then we get to come in when they’re getting paid. So this is the glory moment. This is the finish line. This is where it’s really fun and you know, and that level of energy is just something that we try to harness, you know, throughout the company and create a really exciting payments company. As a result, as you probably know, it’s pretty rare for people to love their payments company. That’s just really not a thing. However, people love AffiniPay, people love Lawpay. We’re very proud to have a 72 net promoter score. And when you compare that to the industry, as an industry it is a negative 10 and I think a huge part of that difference is the passion and the energy and the excitement which our people deliver our service specifically to these professionals and the way we help solve their problems. You know what’s pretty amazing, I think, is that we have a month to month cancel at any time contracts. It’s not a very expensive solution, but you can still cancel at any time. We have no longiterm, but yet our average customer stays with us for over 14 years. And you know, we’re very proud of that. And it’s something we’ve worked very hard on doing. And you don’t get to that without having a culture where people are just truly believers and committed to the cause. And so I spend a lot of my time as a leader working to help motivate, coach, and develop. That kind of excitement within our teams because I think it really is the thing that makes the ultimate difference.
Greg: Absolutely. No, that’s got to be a lot of fun working in that kind of culture.
Tom: It’s a blast. And we’re also very fortunate to have very low turnover when people come here, they love it and they stay and, and I think that is a function of the fact that we’re creating this great environment where people want to win. We have a part of our value systems, we call it surprisingly great and we really try to create surprisingly great experiences for every single interaction. You know, typically when you’re calling, when you have a professional who’s calling their payments company and as I already mentioned, they get paid by the hour and you know, this is their source of revenue. So you know, this is their money. So they’re calling with a real issue. You know, we answer the phone 92% of the time by the second ring and then we try to delight them. And provide something value added in the process, not just solve their issue, but provide something value added in that process that does ultimately make a difference. And our hope is that our clients walk away saying, Hmm, that was surprising, surprisingly better than I expected when I called with the issue. And you know, we’re not just doing that with our clients, we’re doing that with our partners. We’re doing that with each other and we’re trying to do that even with people who come in and interview with AffiniPay. So it’s a, it’s a pretty powerful system when you can unlock it and everybody’s trying to practice it in their own roles.
Greg: Great. I think that the answer segues into the next question really well over the last five years, maybe 10 the payment space has become a pretty hot industry to work in. A lot of money has come in, a lot of younger people coming into the industry. What would be some advice you’d give someone just starting out in the payments industry?
Tom: Yeah, that’s a great question. And I agree it’s a hot place to be and I think it’s only in the early innings of its growth. So I think it’s a great place to really build a career. I was that person 18 months ago. I joined the payment space without a lot of payments experience. And so you know, my journey, some of the things that made the most impact for me in the process was pretty early on. I took my CPP exam, so the certified payments professional exam, and I found that to be a great way to get introduced to the industry and really understand who all the players are and how the dynamics of those are changing and the impact of those changes over time as things go from traditional terminals to much more electronic driven card not present type transactions, integrated payments. And so that was a really powerful foundation for me. But most importantly, I would say the number one thing that I would do if I were coming new to the industry or what I would recommend is go and meet with your target customers, spend as much time as you can, understanding the problems you’re solving, the how the current solutions are working in their environment and you know, what the holes and opportunities are for improvement. And I think that to me, that’s a little bit of the theme that gets lost in the traditional payments industry is, you know, there’s so much focus on clicks and transactions and volume and velocity, which understandably is part of the equation for sure. But what seems to get lost in that mix from my perspective is that you’re solving a real problem at a business and the person that’s better at solving that problem, the solution that’s better at solving that problem, the sales person that’s better – that connecting the solution to that problem is going to be the winner in the end. And so the earlier you can get out as a new person in the industry and meet with your target customer, the better.
Greg: Yeah, I think that’s some great advice. Well, Tom, we’re about to wrap up. Is there anything else you’d like to add before we go?
Tom: Well, just happy to be here. This has been a great discussion and appreciate you guys having us on, you know, AffiniPay has sort of been an under the radar payments company, but we are growing like crazy and looking forward to continued success as we serve the professional services market going forward.
Greg: Great, great. I know your time is incredibly valuable, so I really appreciate you being on, so thank you very much for being on today.
Tom: Well thanks Greg. Enjoyed it. Have a great day.
Greg: You too. And to all you listeners out there, I thank you for your time as well. And until the next story,