Payments Unpacked: The Future of Finance

Over a 20-year career in fintech and payments, Michelle Beyo has learned that collaboration and the right partnerships are critical to success. Now as CEO of Finavator, an award-winning Payments and Future of Finance consultancy, Michelle's mission is to connect financial institutions with fintechs that can help them stay ahead of the innovation curve.

In this episode of Payments Unpacked, Yuno Chief Business Officer Carol Grunberg and Michelle discuss what have been the most transformative payment innovations, the rising threat of fraud, and how partnerships can be a win-win for fintechs and incumbent financial institutions.

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Transcript:

Carol Grunberg:
Hello everyone, I'm Carol Grunberg, I'm your host and the Chief Business Officer of Yuno

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Yuno is a global payments infrastructure company, allowing businesses to do payments all over the world.

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And I'm excited to kick off today's episode with Michelle Beyo. She is the CEO and founder of Finavator And Finavator is an award-winning payments and future finance consultancy. She has over 20 years of expertise from multiple industries, including payments, loyalty, telco, digital identity, and open data.

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She's got this amazing masterclass, which you should all check out. And I'm hoping, Michelle, that you'll talk a little bit about it throughout the course of our conversation.

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And whether you're tuning in for inspiration, for knowledge, or simply for curiosity, you're in the right place. So grab a seat.

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Get comfortable and let's jump into today's episode.

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So Michelle, welcome to the podcast. So, to start, can you share a little bit about your background and what drew you into the world of payments and FinTech?

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Michelle Beyo:
Thank you.

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Yeah, really happy to be here, Carol. Thank you for the invite and the mention of the masterclass, which you're in. So to give a little description, I actually spent 20 years in the corporate space. Like you mentioned, I did actually six years in telco, eight years in online shopping, affiliate marketing, largely working in the US, working with like Alaska, Lufthansa, Delta United, online shopping mall platforms and kind of seeing the shopping experience from that online and then how the points were incurred but I wasn't so familiar with how all the payment was working. And I actually got stolen to go work for a payments company called Income out of Atlanta.

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And I was working out of their international head office that had 30 countries running out of it. And I got to see how prepaid is actually the innovation rail powering so much of the FinTech world from challenger bank infrastructure to buy now pay later infrastructure to allowing the consumer who only has cash to digitize that cash to be an Uber gift card for their kids or to allow them to have a virtual visa so that they could pay for their kids lunch at school or ensure that they're able to buy something online if they don't have any type of credit card. So I was seeing how prepaid was shaping and changing the future of finance. The reason I left the corporate space is largely because I helped them launch WeChat at 7-Eleven as a test pilot in Vancouver in 2017 and I got to see what QR payment infrastructure could facilitate. And I was so excited for what it could enable, but also quite nervous that it was so far ahead in Asia and yet so far behind in North America. So I went and took the first Ivy course focused on blockchain, digital identity, and fintech back at Ivy in Toronto. It was an 80 hour pre-read and a three day course.

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I learned so much. My eyes were open. I could no longer shut them. I saw the future of finance and it touched quite a bit of things that I had touched in my past. And when I won Money2020 Rise Up, where they pick 30 women out of 500 at the biggest payments conference in Vegas in the world in 2019, they called me and that next day I basically called them back and said, I am so excited, but I'm actually now the CEO of Finavator.

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So I started Finavator overnight largely because I realized everything I had worked on is a part of the future of finance and that the future of finance is where I want to spend my time helping people not only understand it but enable it.

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Carol:
I love that. I love how you captured kind of everything you had seen and really turned it into something that was going to help the industry as a whole. And so with that, you you've seen these significant changes, not just, you Yuno, over the past couple of decades that you've been in this industry. So in your view, you've touched on some of them, but what would you say have been some of the most transformative in the payment space?

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Michelle:
Yeah, so one that's changed our everyday lives, believe COVID was the push and the catalyst to North America finally using tap to pay in masses. I still remember the day that my mom in the pandemic called me and she's like, I don't want to touch the credit card machine. And I said, yes, I don't want you to touch it either. Here is how you enable your credit card in your Samsung wallet. And all you have to do is tap to pay and walk away.

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And I think that was transformative because there was a need. No matter how many times you cleaned down that terminal, nobody wanted to put their pin in. Most of North America has chip and pin at this point, so they could tokenize it directly into their phone. And then you've just seen this trend continue to grow. And I think digitized tap payments have largely been one of the biggest transformational trends because though it costs a little bit more, it also allowed for less fraud. When that card is embedded in your phone and you're tapping from your phone, there's a lot more authenticated payments.

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Carol:
That's so true. You Yuno, when we launched Contactless when I was at Google in 2012, so eight years before, it became almost ubiquitous, right, post-COVID. One of the key benefits of that was that the secure element in NFC was, it was more secure by having it in your phone, but I think it was the safety aspect that really got everyone using it, but you're right, it is a much more secure way of managing your payments.

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But yeah, but it was really funny that it was ultimately it was the fact that it was safer and quite frankly easier at the end of the day. But it took eight years though for people to be able to finally adopt it. But okay, so let's switch gears a little bit. As you touched on, you've worked across the gamut of the sizes of organizations, large organizations, small organizations, fintechs, MNOs. And so with that,

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What do you see as the key differences of these organizations and how they manage their payments operations?

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Michelle:
Yeah, I think it's having a lens on the fact that this payments aspect touches every business. So you need to understand it. And not a lot of organizations have payments experts or engage payments experts. They just sign up and then end up with a payment system. And the finance looks at it, but they don't understand it. And once you understand it, you can optimize it. And I think having this opportunity to spend time on what are our payment systems, how do they interconnect to everything, and how can we improve them could save companies, Yuno, bips, which could save them thousands, if not millions of dollars. And I think it's about taking that intentional time. It is a complex thing. It's a complex web. And therefore it can be very nerve wracking, I think, to look at your payment system. You don't want to be taken. You don't want to be paying too much. But you also, if you don't understand it, you don't want to dive into it and end up making it worse. So I think engaging a payments consultancy or the right fintech partner can truly help people save money, but they have to truly understand that their job as a business is to focus on what they sell and improve that product at all times to ensure the customer is happy.

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But what goes along with it is the payment infrastructure. So they should really take a look, spend some time, spend some focus, especially with the innovations that have happened over the last 10, 15 years they could be using an antiquated ecosystem and be charged an amount that is no longer the market rate because they just haven't negotiated or they haven't changed. And there just could be a lot of savings and wins.

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Carol:
That's really insightful. And that's one of the things we found too at Yuno is as a payments infrastructure company and enabling companies to just plug in through a single integration to have access to hundreds of PSPs or networks, payment types all over the world. And being able to manage all that through a single portal has been really helpful for, especially for large enterprise companies who traditionally would have to plug into all of these, you Yuno, independently and have to manage all this, right? And all the updates that come with all these disparate systems, which is really, really hard to manage and various regulations all around the world. Yeah, really interesting. It's a complex web.

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Michelle:
Well, to layer onto that, like I think it's really complex. People go to grow the company, then they have to grow their payment system in the UK, which has open banking and they don't really use credit cards. And you need to have different optionalities to be able to take in payments from that region, but you don't understand that region because you're not living there. So having a way to simplify it is crucial because you could end up with the wrong payment infrastructure or not giving the right optionality. So consumers aren't not into your product, they just don't want to pay in that way.

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Carol:
Right. Do you see having a payments team almost as an antiquated way of doing business where what I mean is a company should really focus on their core business and a payments company should really focus on their core business, which is payments. Right.

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Michelle:
Yeah, I think having a payments team could be, depending how big the company is, could be an asset. But as long as that payments team is going to conferences, is continuing their learning, is engaging with different fintechs so that, you Yuno, it's not just old payment insights, it's evolving payment insights. And it's actually why we built the masterclass in the first place. It's just too complex. Things are changing so often that if you don't understand the future, like the future of finance, where enablements of what is web three and digital currencies and CBDCs or crypto or open banking and digital identity and cybersecurity and embedded finance. If you don't understand the basics of these, you can't truly innovate your core products because you don't understand how it might interact with how you could make it better.

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Carol:
So partnerships play a really crucial role in fintech innovation. So how do you think, what makes a fintech partnership truly successful?

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Michelle:
Yeah, I see, you Yuno, I've worked with banks and I've worked with fintechs and I've worked with credit unions and different organizations. When you look at a bank, their expertise is building really strong rapport, having long-term relationships with these clients and offering them many different services. But they don't normally have an innovation hub that is successful because they're too focused on risk and they're too focused on maintaining the ship.

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What fintechs do really well is they find a really small niche that is broken, right? Like small business banking is kind of a broken offering. We don't have a lot of good options, but there's great fintechs who have gone out there, spoke to entrepreneurs, built out a really truly innovative, you Yuno, business bank that has an expense-based credit card that loads back into your accounting system and it doesn't want to make the business owner move all of their accounts of their business over to this FinTech. What they really want to utilize is that credit card, that Excel based infrastructure. And so they'll probably just use them as a micro bank and keep their core bank. But the bank could partner with this new FinTech for SMEs and create a partnership so that they can A get a commission maybe by passing them over to this opportunity and help their customers with something they're not good at. So I think those are the best partnerships when you have like a company or a bank that is really solid, has a very solid base of customers, but just isn't great at innovation and then finds the right fintech, especially in open banking ecosystems where these fintechs have been accredited, meaning they've had to hit a certain bar of compliance and security and how they hold their data to a part of the ecosystem. So it kind of removes that 18 months of due diligence once they're already accredited in an open banking ecosystem. So that partnership can happen quickly. Instead of them missing the market, they can actually grab the market pretty early on if they find the right fintech to partner with.

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Carol:
Right. And I think also being a part of payment teams that a lot of these enterprise companies also working with fintechs as an extension of the existing team is also a really successful formula.

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Michelle:
100%. I think when you're working at an organization and you want to innovate, the best way to do so is figure out what's happening in the market. Who are the big players? Who are they already working with? Some reviews on what the product is doing and then figure out how you can strategically partner to do a pilot and then see how your clients are liking it and then scale from there. And you both end up being a win-win.

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Carol:
Okay, now something that's near and dear to your heart. You talk about this a lot. You love it. And one of the things that I've heard you say is the best way to mitigate fraud is to stop it from happening in the first place. So, onboarding. So talk to me a little bit about onboarding and why this is so near and dear to you and why is it that you should really think about stopping it from the onset.

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Michelle:
Yeah, I built a lot of payment products. I built one of the first reloadable products in Canada. And when we built that, we realized that we had to KYC consumers before we were selling prepaid cards under $500 didn't have to do this. So now we had to go out to all the retailers and explain what KYC was, because many of them didn't have financial products, and ensure that our onboarding process was a super simple so that we wouldn't lose somebody on the onboarding, but B, hit all compliance in every single part of the country and federally. And then I've helped launch a whole bunch of products in the U.S. Very similar. Every state is different. Then you have federal. So it's really important to do KYC, but KYC gets you a base layer.

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You want to ensure that the customer you're onboarding is a real person and is who they say they are because that creates a better flow and strong usership that you're trying to mitigate fraud from the onset. So any tools, any additional signals that you can add in, though it's an upfront cost, you can help mitigate fraud, which could skyrocket. I always say to people, I'm happy to come help you innovate your payment system. But first, let's take a look at what does your onboarding KYC system look like?

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Because if you don't fix your onboarding or you already have a leak in the bucket, it's just gonna get really big when you innovate and you have a better product, more customers are coming to you and you haven't solved, you've just exasperated this problem. So I think the thing to look at is the fact that fraud has increased from about 1 % to 2.5%. That's a mass differential that is affecting across the world. And we don't have digital identity here like there is in India or Sweden or other markets, so there is a lot more fraud and we have to figure out how do we get the right signals in and there's great partners that you can utilize and it's not about using one partner, I think it's about having a flow of different signals to create what is the best onboarding flow to ensure you mitigate fraud upfront.

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Carol:
That's great. I love it. I love it. Okay, so this was a great conversation, Michelle. Thank you so much, and I love you taking the time to do this. Super appreciate it. I Yuno you're on the back of an amazing conference, so thank you for doing this with us, with me. Okay, so if I could recap, let me think about this. Digital adoption is skyrocketing, including with older generations like your mom, using tab and pay.

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Banks and merchants really need to adapt and to be able to partner and work closely with organizations like Fintechs and treat them like extensions of themselves. Fraud continues to be a massive issue and to think about really how to offset it from the beginning by doing things like really being thoughtful about the onboarding and how that's being treated.

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And then on the bright side, open banking is really a shrink in an era of financial inclusion. And also the, didn't touch on this, but I Yuno this is really something you think about a lot, the underbanked and the unbanked communities. And so, and I think open banking really touches on that. So anything else you wanted to add to that? I Yuno we kind of touched on quite a few things here in regards to the evolution and transformation of payments.

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Michelle:
Well, I love that you're doing this podcast. think it's so important for people to get excited because I think payments are exciting. I call myself a payments geek. There is a lot of payments geeks within the ecosystem and it's ever changing. So it's one of those industry that there's always something new. You always have to keep your ear to the ground. You always have to be listening to podcasts or hitting events to see what's coming next. And I think having this concept of pay by bank coming out through open banking and how that can drive financial inclusion and how it's actually helping GDP growth in countries like Brazil and how our vision in each country to move towards open data can actually affect and increase our GDP growth should be a really important topic for people to understand because this is not open banking is not just for the banks. It's actually a data movement of putting the consumer first and allowing them to have their data, not just from their cell phone ownership, which happened a good couple of years ago of being able to own our phone number.

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This is bigger. This is about being from open banking to open finance to open data, which would include open health, open energy, maybe even open social, allowing me just like I ported my cell phone number from one telco provider to another, allowing me to move my banking information from one bank provider to a fintech for a microservice to an insurer to our mortgage provider so that everything I do is safe and secure in an API and allowing me to get faster, cheaper, more personalized services.

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Carol:
That's great. That's great. And again, I'm going to plug your masterclass. Once again, I believe you have 10 different topics across the gamut from fraud to I think security to cryptocurrencies. So that's available at Finavator. And so again, I Yuno that's an incredible class. So I'll pitch it one more time for everyone in this podcast, Payments in a Flash brought to you by Yuno. And again, thanks for doing this with us, Michelle. a great, great rest of your day.

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Michelle:
Thank you so much, Carol.

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To join Finavator's Future of Finance Mastercass, please visit: https://www.finavatorfuturefinancemasterclass.com/

Use the discount code "Yuno20" to receive a 20% discount.

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