Finding Payments Innovation In All The Right Places

[“Finding Payments Innovation In All The Right Places” originally appeared on PYMNTS.com.]

The payments landscape is only getting bigger. As more stakeholders and players join the fold, there’s a ripe opportunity to find innovative ideas in unlikely places. As part of the Commanders In Chief series, YapStone President David Weiss explained why it’s necessary to search both internally and externally for a growing number of partners and constituencies when carving out the path to innovation.

Here is an excerpt of the conversation.


PYMNTS: How would you define your company’s approach to innovation?

DW: I would define our approach to innovation as solving problems for trillion-dollar vertical markets and multibillion-dollar partners, not so much innovating for innovation’s sake.


PYMNTS: Where do you look for innovative ideas, and why?

DW: We look to customers and partners — not just to solve problems and pain points but also to identify new revenue and profit streams. We look to our own people across functions — not just product, engineering, QA and dev ops but risk, customer service, sales, business development, strategy, corporate development, finance, legal, compliance and HR.

We look to the card networks, issuers, banks, back-end acquirers and regulators — not so much for innovative ideas from them but how to answer the question, “Do we best innovate for our customers in the most commercial, compliant fashion we can, while satisfying what we need to do to serve all those partners and related constituencies?” Lastly, I get a few great ideas every day from Angie, my eight-year-old daughter — you’d be surprised.


PYMNTS: What is the most innovative thing you’ve ever done?

DW: We built a global payments platform from scratch for one of the largest and most successful global marketplaces in the world — HomeAway — and did it in a fashion that was singularly unique in the industry.

We are the merchant of record, we take all chargeback and financial liability, we built a world-class decisioning engine that has auto-onboarded hundreds of thousands of customers and we built sophisticated split payments functionality, allowing our partner to triple its own revenue and profit opportunity. Unlike other vacation rental marketplaces, we can get property owners paid upon booking a trip that is often several months in advance of the stay (and plan to incorporate instant payments in minutes for all our partners).

We expanded globally with HomeAway and continue to broaden our geographic footprint for all our partners. We provide a wide range of alternative payment methods, disperse funds directly to customers, offer auto-refundable damage deposit functionality and provide 24/7 customer service, which is not the sexy part of payments but critical to customers in our verticals. We are now expanding our unique offering and platform to other partners in our verticals, as well as to other sharing economy marketplaces and softwares.


PYMNTS: What do you wish you had more time to do?

DW: There’s never enough time and money to do what we want to do. We often have to resist the urge to chase every shiny object that comes along. Having said that, there are some interesting new verticals we’d love to penetrate now, but we have our hands full for the next year or so on a few trillion dollars’ worth of market opportunity.


PYMNTS: What do you think that most people underestimate about innovating in payments?

DW: I mentioned earlier the number of partners and constituencies involved: the banks, the back-end acquirers, the card networks, the regulators and, of course, the almighty consumer — innovating in payments often involves having to solve for each of those parties.


PYMNTS: What keeps you up at night? What concerns you most in the payment solutions space?

DW: Security and data protection. We’re investing millions of dollars in people and infrastructure and will continue to do so to vigilantly protect our customers and partners.


PYMNTS: What trends and changes are you watching that are affecting the industry and your role?

DW: We spend quite a bit of time thinking about how we convert cash, paper check and ACH payments to card payments, and we believe strongly we are uniquely qualified and well-positioned to accelerate this trend across verticals. We are also watching and following the regulatory environment very carefully as we believe we’re also competitively positioned quite well in this regard.


PYMNTS: What product has had the most impact on payments in the last five years, and why?

DW: I view this one very much through the YapStone lens and would say the advent of global marketplaces, bringing payments online and large enterprise software and other partners realizing the enormous commercial opportunity and financial returns that can be generated from integrated payment solutions.


PYMNTS: What person or company do you think “gets” innovation, and why? And, conversely, who or what has missed it, and why?

DW: We believe the path to multibillion-dollar payment solutions opportunities run through CEOs, CFOs, CTOs, heads of product, heads of strategy — not necessarily always directly through the developer community — and those large opportunities are where we remain focused.


PYMNTS: What advice would you give a young innovator in this space, and why would you tell them to heed it? 

DW: It’s extraordinarily difficult to build a payments company in this market environment, in large part due to many of the challenges I referenced above. I would advise seeking meaningful partnerships that accelerate and de-risk the business plan. We look at Money20/20 and imagine how many of those companies will have thriving businesses three to five years from now. We often refer to the great line from the movie “Jaws” in regards to most of those companies: “We’re gonna need a bigger boat.”