Easily Monetize SaaS Payments w/ Tilled Founder & CEO Caleb Avery

Avery | Tilled, Founder & CEO: 00:00:00

the reality is traditionally that payment

Avery | Tilled, Founder & CEO: 00:00:02

facilitator model and the benefits of that payment facilitator model have

Avery | Tilled, Founder & CEO: 00:00:06

really been reserved for the, the largest companies that could afford to

Avery | Tilled, Founder & CEO: 00:00:09

spend, years and millions of dollars

Avery | Tilled, Founder & CEO: 00:00:11

building out all the infrastructure and the teams and the security to be able

Avery | Tilled, Founder & CEO: 00:00:15

to, to take advantage of that model

Tedd Huff | Fintech Confidential, Host:

: 00:00:49

Caleb, welcome to the show.

Caleb Avery | Tilled, Founder & CEO:

: 00:00:51

Thanks for having me on today.

Tedd Huff | Fintech Confidential, Host:

: 00:00:53

Payment facilitation is like

Tedd Huff | Fintech Confidential, Host:

: 00:00:54

one of my favorite topics.

Tedd Huff | Fintech Confidential, Host:

: 00:00:56

I've helped lead a number of companies to become ISOs and PayFacs over the years.

Tedd Huff | Fintech Confidential, Host:

: 00:01:02

Tilled has a unique approach to helping software companies optimize their

Tedd Huff | Fintech Confidential, Host:

: 00:01:06

integrated payment processing solution and generate some additional revenue.

Tedd Huff | Fintech Confidential, Host:

: 00:01:11

Before we dive into Tilled and how it's changing the integrated payments with your

Tedd Huff | Fintech Confidential, Host:

: 00:01:16

PayFac as a service program, why don't you

Tedd Huff | Fintech Confidential, Host:

: 00:01:19

Tell me how did you fall into your FinTech journey that has

Tedd Huff | Fintech Confidential, Host:

: 00:01:22

spanned well over a decade?

Avery | Tilled, Founder & CEO: 00:01:24

Sure.

Avery | Tilled, Founder & CEO: 00:01:24

So I, I started in college at 19 years old going door to door to sell payment

Avery | Tilled, Founder & CEO: 00:01:29

processing to small business owners.

Avery | Tilled, Founder & CEO: 00:01:31

And after scaling up, That business.

Avery | Tilled, Founder & CEO: 00:01:34

I started getting brought in on these consulting opportunities for software

Avery | Tilled, Founder & CEO: 00:01:37

companies, and it was really through that consulting work over a few years

Avery | Tilled, Founder & CEO: 00:01:41

where I started to realize how broken that the integrated payment landscape

Avery | Tilled, Founder & CEO: 00:01:45

really was and really saw that opportunity, , for what became tilled

Avery | Tilled, Founder & CEO: 00:01:49

and our, our PayFac as a service model.

Tedd Huff | Fintech Confidential, Host:

: 00:01:51

So how did you end up selling

Tedd Huff | Fintech Confidential, Host:

: 00:01:55

merchant services to even begin with?

Tedd Huff | Fintech Confidential, Host:

: 00:01:56

What?

Tedd Huff | Fintech Confidential, Host:

: 00:01:57

Like, that doesn't, that isn't like something that

Caleb Avery | Tilled, Founder & CEO:

: 00:01:59

That's not what everybody

Caleb Avery | Tilled, Founder & CEO:

: 00:02:00

does at, at 19 years old

Tedd Huff | Fintech Confidential, Host:

: 00:02:02

no.

Tedd Huff | Fintech Confidential, Host:

: 00:02:03

I mean, I think you and I, I think I started it at, uh, 22, 23, so yeah, I,

Tedd Huff | Fintech Confidential, Host:

: 00:02:10

I can, uh, , I, I, I didn't fall much far behind you, but how did you end

Tedd Huff | Fintech Confidential, Host:

: 00:02:15

up getting pulled into, uh, Payments?

Caleb Avery | Tilled, Founder & CEO:

: 00:02:17

So my, my partner in the business, his

Caleb Avery | Tilled, Founder & CEO:

: 00:02:19

stepdad, really had a, an entire career within the, the payment, ecosystem.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:23

I think it was between my, my sophomore and junior year, uh, of college that

Caleb Avery | Tilled, Founder & CEO:

: 00:02:27

we really started to learn more about.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:29

The, the payment ecosystem and the potential opportunity within

Caleb Avery | Tilled, Founder & CEO:

: 00:02:32

the, the iso uh, landscape.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:34

the, The reality was when we started, it wasn't like we, we were planning

Caleb Avery | Tilled, Founder & CEO:

: 00:02:37

to go build this, this gigantic,

Caleb Avery | Tilled, Founder & CEO:

: 00:02:38

payment empire.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:39

Uh, it was really, you know, how can we, you know, as college students go out and,

Caleb Avery | Tilled, Founder & CEO:

: 00:02:43

and earn a little bit of extra money,

Caleb Avery | Tilled, Founder & CEO:

: 00:02:44

on the side.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:45

And so we started going out and having conversations with small

Caleb Avery | Tilled, Founder & CEO:

: 00:02:48

business owners in the Greenville, South Carolina, uh, area.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:51

And I think, uh, at least for me, I, I was just surprised at how

Caleb Avery | Tilled, Founder & CEO:

: 00:02:54

receptive these business owners.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:57

To somebody coming in,

Caleb Avery | Tilled, Founder & CEO:

: 00:02:58

, to speak with them.

Caleb Avery | Tilled, Founder & CEO:

: 00:02:58

And I think it really spoke to, uh, the problems that these small

Caleb Avery | Tilled, Founder & CEO:

: 00:03:02

business owners were facing, working with the, the big banks and the big,

Caleb Avery | Tilled, Founder & CEO:

: 00:03:05

, processors for, for their merchant services.

Caleb Avery | Tilled, Founder & CEO:

: 00:03:07

And they were really eager to find, you know, a, a better solution.

Tedd Huff | Fintech Confidential, Host:

: 00:03:12

What do you feel is the biggest

Tedd Huff | Fintech Confidential, Host:

: 00:03:14

lesson you've learned so far about payments and FinTech?

Avery | Tilled, Founder & CEO: 00:03:19

Whew.

Avery | Tilled, Founder & CEO: 00:03:19

Biggest lesson that, that I've learned, uh, thus far.

Avery | Tilled, Founder & CEO: 00:03:23

I think

Avery | Tilled, Founder & CEO: 00:03:23

when you look at the, the mission,

Avery | Tilled, Founder & CEO: 00:03:24

behind, uh, what we're doing at, at Tilled, I think a key part of that

Avery | Tilled, Founder & CEO: 00:03:28

mission is the, this idea of changing.

Avery | Tilled, Founder & CEO: 00:03:30

The, the payments landscape for, for the better.

Avery | Tilled, Founder & CEO: 00:03:32

And I think one of the, the things that I've consistently seen throughout

Avery | Tilled, Founder & CEO: 00:03:36

my career is that a lot of the,

Avery | Tilled, Founder & CEO: 00:03:38

incumbents in the space seem to view the, the industry as this zero sum

Avery | Tilled, Founder & CEO: 00:03:42

game where for, for them to win,

Avery | Tilled, Founder & CEO: 00:03:44

, the agent or the small business owner, you know, has to, to lose.

Avery | Tilled, Founder & CEO: 00:03:47

And I, I just don't really agree with that, that premise, uh, or, or the ethos,

Avery | Tilled, Founder & CEO: 00:03:52

be behind that.

Avery | Tilled, Founder & CEO: 00:03:53

And so it's been really important, uh, for me.

Avery | Tilled, Founder & CEO: 00:03:55

The, the business here at Till to, to really approach the, the business

Avery | Tilled, Founder & CEO: 00:03:59

with that mindset of, of transparency and, and fairness and really,

Avery | Tilled, Founder & CEO: 00:04:03

looking to, to change the landscape for, for the better and, and really use that

Avery | Tilled, Founder & CEO: 00:04:06

as a lens to, to view, you know, all of the key decisions that, that we make,

Avery | Tilled, Founder & CEO: 00:04:10

within the business.

Tedd Huff | Fintech Confidential, Host:

: 00:04:13

Software seems to be eating

Tedd Huff | Fintech Confidential, Host:

: 00:04:15

everything, including payments.

Tedd Huff | Fintech Confidential, Host:

: 00:04:18

How big of a market is there for embedded payments with payment facilitation?

Avery | Tilled, Founder & CEO: 00:04:23

The market for software led payments is, is

Avery | Tilled, Founder & CEO: 00:04:25

how I, you know, typically categorize.

Avery | Tilled, Founder & CEO: 00:04:27

It represents somewhere around a trillion dollars, uh, o of processing volume,

Avery | Tilled, Founder & CEO: 00:04:31

which, uh, sounds quite large and, and frankly is, you know, quite large.

Avery | Tilled, Founder & CEO: 00:04:35

But it still represents a relatively small, uh, percentage of the overall.

Avery | Tilled, Founder & CEO: 00:04:40

Payments, uh, landscape or, I think today it's, it's something like 16,

Avery | Tilled, Founder & CEO: 00:04:44

17%, you know, of the overall, uh, payments ecosystem, whereas the, the

Avery | Tilled, Founder & CEO: 00:04:48

point that you made, I, I fully agree with this idea of software eating

Avery | Tilled, Founder & CEO: 00:04:51

the world and I, I feel like when you look at where, where software

Avery | Tilled, Founder & CEO: 00:04:55

led payments will be, 5, 7, 10 years.

Avery | Tilled, Founder & CEO: 00:04:58

from now I really believe it's only a matter of time before this software led

Avery | Tilled, Founder & CEO: 00:05:02

payments movement really represents the majority of the processing volume within

Avery | Tilled, Founder & CEO: 00:05:07

the, the payments landscape, which, if you look at where it's starting, today

Avery | Tilled, Founder & CEO: 00:05:10

obviously represents a tremendous, you know, growth opportunity for, for those

Avery | Tilled, Founder & CEO: 00:05:13

that are getting involved, uh, today.

Tedd Huff | Fintech Confidential, Host:

: 00:05:15

With there being such a big.

Tedd Huff | Fintech Confidential, Host:

: 00:05:17

Opportunity in the software led payments, as you called it, and

Tedd Huff | Fintech Confidential, Host:

: 00:05:21

at the current state of the payments ecosystem, it's severely disjointed,

Tedd Huff | Fintech Confidential, Host:

: 00:05:26

disconnected, fragmented from how people want to pay and get paid what is

Tedd Huff | Fintech Confidential, Host:

: 00:05:33

being done by Tilled to enable better experiences for the players in the market?

Caleb Avery | Tilled, Founder & CEO:

: 00:05:37

When I look at where embedded payments,

Caleb Avery | Tilled, Founder & CEO:

: 00:05:40

uh, started, uh, a a lot of software companies, you know, in the olden

Caleb Avery | Tilled, Founder & CEO:

: 00:05:44

days were, were partnering with the legacy processors and they were really

Caleb Avery | Tilled, Founder & CEO:

: 00:05:47

suffering through pretty painful, uh, technical integrations, lack of

Caleb Avery | Tilled, Founder & CEO:

: 00:05:51

features, lack of support, uh, and they had to go through all of this

Caleb Avery | Tilled, Founder & CEO:

: 00:05:54

manual, P d f, you know, merchant onboarding, uh, you know, solutions.

Caleb Avery | Tilled, Founder & CEO:

: 00:05:58

And about 10 years ago, you started to see this evolution of the, the stripes

Caleb Avery | Tilled, Founder & CEO:

: 00:06:03

and the, and the squares and the brain trees of the world really coming into

Caleb Avery | Tilled, Founder & CEO:

: 00:06:07

the market with this payment facilitator model and really revolutionizing the, the

Caleb Avery | Tilled, Founder & CEO:

: 00:06:12

SMB, you know, merchant, uh, processing.

Caleb Avery | Tilled, Founder & CEO:

: 00:06:15

Landscape.

Caleb Avery | Tilled, Founder & CEO:

: 00:06:16

And

Caleb Avery | Tilled, Founder & CEO:

: 00:06:16

, the reality is traditionally that payment

Caleb Avery | Tilled, Founder & CEO:

: 00:06:21

that payment facilitator model have really been reserved for the, the largest

Caleb Avery | Tilled, Founder & CEO:

: 00:06:25

companies that could afford to spend, you know, years and millions of dollars

Caleb Avery | Tilled, Founder & CEO:

: 00:06:29

building out all the infrastructure and the teams and the security to be able

Caleb Avery | Tilled, Founder & CEO:

: 00:06:32

to, to take advantage of that model.

Caleb Avery | Tilled, Founder & CEO:

: 00:06:34

And the general idea behind PayFac as a service is making the benefits of

Caleb Avery | Tilled, Founder & CEO:

: 00:06:39

that PayFac model accessible to every,

Caleb Avery | Tilled, Founder & CEO:

: 00:06:42

software company out there from startups all the way to, we have a publicly traded

Caleb Avery | Tilled, Founder & CEO:

: 00:06:46

company, you know, operating on our platform without these companies having

Caleb Avery | Tilled, Founder & CEO:

: 00:06:50

to go through the regulatory and the compliance process for they themselves,

Caleb Avery | Tilled, Founder & CEO:

: 00:06:54

to go become a PayFac

Caleb Avery | Tilled, Founder & CEO:

: 00:06:55

. And so in my mind

Caleb Avery | Tilled, Founder & CEO:

: 00:06:56

there's this technology component, there's a managed services component,

Caleb Avery | Tilled, Founder & CEO:

: 00:07:00

and then there's a regulatory component.

Caleb Avery | Tilled, Founder & CEO:

: 00:07:02

And that combination of the three of those pieces is really the

Caleb Avery | Tilled, Founder & CEO:

: 00:07:05

secret sauce that makes tilled and our PayFac as a service approach.

Caleb Avery | Tilled, Founder & CEO:

: 00:07:09

So, Special.

Tedd Huff | Fintech Confidential, Host:

: 00:07:12

With there being so many

Tedd Huff | Fintech Confidential, Host:

: 00:07:13

different ways that you just, you mentioned a handful there, right?

Tedd Huff | Fintech Confidential, Host:

: 00:07:16

There's so many different ways for software companies

Tedd Huff | Fintech Confidential, Host:

: 00:07:19

to monetize their payments.

Tedd Huff | Fintech Confidential, Host:

: 00:07:20

Can you tell us about a little bit more detail about how the different models

Tedd Huff | Fintech Confidential, Host:

: 00:07:26

that there are out there in the market and how they really stack up when you

Tedd Huff | Fintech Confidential, Host:

: 00:07:31

start looking at the bank account?

Avery | Tilled, Founder & CEO: 00:07:33

Sure.

Avery | Tilled, Founder & CEO: 00:07:33

So, you know, when I think about

Avery | Tilled, Founder & CEO: 00:07:35

the.

Avery | Tilled, Founder & CEO: 00:07:35

Different options available for software companies that are looking to

Avery | Tilled, Founder & CEO: 00:07:38

embed payments within their platform,

Avery | Tilled, Founder & CEO: 00:07:40

I think today a lot of companies start with managed PayFac solutions like Stripe

Avery | Tilled, Founder & CEO: 00:07:44

, but they typically don't offer much in the way of an actual monetization opportunity

Avery | Tilled, Founder & CEO: 00:07:49

for, for these software platforms.

Avery | Tilled, Founder & CEO: 00:07:51

And so it's a fantastic solution for an early stage startup that, you know, the,

Avery | Tilled, Founder & CEO: 00:07:55

the technical co-founders just want to get payments embedded over the weekend.

Avery | Tilled, Founder & CEO: 00:07:58

Typically is not the, the right solution for these businesses as they scale.

Avery | Tilled, Founder & CEO: 00:08:02

And so when you look at the, the mid-market, Historically, that

Avery | Tilled, Founder & CEO: 00:08:05

mid-market for, for embedded, uh, payments has been dominated by

Avery | Tilled, Founder & CEO: 00:08:09

the, the legacy, uh, providers.

Avery | Tilled, Founder & CEO: 00:08:11

You know, the, the publicly traded, uh, you know, ISOs and, and acquirers.

Avery | Tilled, Founder & CEO: 00:08:15

the, The reality is the, the, the technology that those guys have

Avery | Tilled, Founder & CEO: 00:08:19

available, the merchant experience, uh, that they provide really

Avery | Tilled, Founder & CEO: 00:08:22

leaves a a lot to, to be desired.

Avery | Tilled, Founder & CEO: 00:08:24

The kind of other end of the spectrum, Being these PayFac in a box, uh,

Avery | Tilled, Founder & CEO: 00:08:28

solutions like a FInix or an Infinicept where they're really helping companies

Avery | Tilled, Founder & CEO: 00:08:31

go become fully registered PayFac s themselves and giving them the tools

Avery | Tilled, Founder & CEO: 00:08:35

that they need to, to operate, uh, you know, as a fully registered PayFac.

Avery | Tilled, Founder & CEO: 00:08:40

For me, The decision point often comes down to the size and scale

Avery | Tilled, Founder & CEO: 00:08:44

that companies are operating at.

Avery | Tilled, Founder & CEO: 00:08:45

Which of those buckets really ends up being, you know, the right

Avery | Tilled, Founder & CEO: 00:08:48

decision for, for their business?

Avery | Tilled, Founder & CEO: 00:08:49

Stripe is a great fit for certain companies, Infinicept is a great fit,

Avery | Tilled, Founder & CEO: 00:08:53

uh, you know, for, for certain companies.

Avery | Tilled, Founder & CEO: 00:08:55

where I really see the opportunity for Tilled is this mid-market, , for

Avery | Tilled, Founder & CEO: 00:08:59

vertical software businesses.

Avery | Tilled, Founder & CEO: 00:09:00

I typically define that mid-market as companies between

Avery | Tilled, Founder & CEO: 00:09:02

50 million and 2 billion.

Avery | Tilled, Founder & CEO: 00:09:04

Of annual processing volume, where there's enough volume that it really

Avery | Tilled, Founder & CEO: 00:09:07

makes sense to look at monetizing the payments going through your platform,

Avery | Tilled, Founder & CEO: 00:09:11

but you're nowhere near the size and scale that it really even makes sense

Avery | Tilled, Founder & CEO: 00:09:15

to, to entertain going and becoming a, a fully registered payback.

Avery | Tilled, Founder & CEO: 00:09:19

And there is a scale where it makes sense to, to consider, you know,

Avery | Tilled, Founder & CEO: 00:09:23

becoming a, a PayFac , but the reality is it's, it's pretty large.

Tedd Huff | Fintech Confidential, Host:

: 00:10:17

you just laid out the, a nice map of,

Tedd Huff | Fintech Confidential, Host:

: 00:10:20

of kind of a journey that's happened with with payment facilitation.

Tedd Huff | Fintech Confidential, Host:

: 00:10:24

I still remember way back when it was not allowed, and I'm using air

Tedd Huff | Fintech Confidential, Host:

: 00:10:29

quotes, um, by the card brands.

Tedd Huff | Fintech Confidential, Host:

: 00:10:31

It was really frowned upon cause it was looked at as, as payment aggregation and

Tedd Huff | Fintech Confidential, Host:

: 00:10:35

now they put some tools in place in it in order to manage it a little bit better.

Tedd Huff | Fintech Confidential, Host:

: 00:10:40

When you're looking.

Tedd Huff | Fintech Confidential, Host:

: 00:10:42

All these different things, and especially when you were bringing

Tedd Huff | Fintech Confidential, Host:

: 00:10:46

up tilled, there are a lot of moving parts and there's a lot of things that

Tedd Huff | Fintech Confidential, Host:

: 00:10:50

could go wrong and it jeopardizes the profitability of integrated payments.

Tedd Huff | Fintech Confidential, Host:

: 00:10:56

If you were to call out like the top three mistakes that software companies

Tedd Huff | Fintech Confidential, Host:

: 00:11:01

make when they go into monetizing payments, what would they be?

Avery | Tilled, Founder & CEO: 00:11:06

For one, uh, companies underestimate, uh,

Avery | Tilled, Founder & CEO: 00:11:11

the importance of the, the partnership.

Avery | Tilled, Founder & CEO: 00:11:13

With the, the company that, that they're choosing.

Avery | Tilled, Founder & CEO: 00:11:15

For a lot of vertical software companies, they believe that they're gonna do,

Avery | Tilled, Founder & CEO: 00:11:19

you know, a lot more on their own.

Avery | Tilled, Founder & CEO: 00:11:21

I think consequently don't spend enough time really getting to know,

Avery | Tilled, Founder & CEO: 00:11:24

you know, the potential partners that, that they're going to work with.

Avery | Tilled, Founder & CEO: 00:11:27

Unfortunately, uh, which leads to mistake number two, really

Avery | Tilled, Founder & CEO: 00:11:29

getting too hung up on, on pricing.

Avery | Tilled, Founder & CEO: 00:11:32

we have companies all the time that'll come to us and say, oh,

Avery | Tilled, Founder & CEO: 00:11:34

well, world Pay has offered us, you know, 2 cents and two basis points.

Avery | Tilled, Founder & CEO: 00:11:37

You need to match it.

Avery | Tilled, Founder & CEO: 00:11:38

Uh, and it's like, we don't need to match the pricing that World Pay is offering.

Avery | Tilled, Founder & CEO: 00:11:41

We're offering substantially better technology, a substantially better

Avery | Tilled, Founder & CEO: 00:11:44

experience, and we're actually gonna help you, you know, scale your, your business

Avery | Tilled, Founder & CEO: 00:11:48

much better.

Avery | Tilled, Founder & CEO: 00:11:48

And I think these software companies that, that get too hung up on that schedule

Avery | Tilled, Founder & CEO: 00:11:52

A and the, and the pricing structure.

Avery | Tilled, Founder & CEO: 00:11:54

Lose sight of the, the bigger picture and, and really, uh, end up not

Avery | Tilled, Founder & CEO: 00:11:58

achieving the, the type of success, you know, that they want because they

Avery | Tilled, Founder & CEO: 00:12:01

end up not bringing the right product to market with the right partner.

Avery | Tilled, Founder & CEO: 00:12:05

Which leads me to, to 0.3.

Avery | Tilled, Founder & CEO: 00:12:07

Um, Really underestimating, uh, the, the difficulty in actually

Avery | Tilled, Founder & CEO: 00:12:12

going to market with an integrated payment, uh, you know, solution.

Avery | Tilled, Founder & CEO: 00:12:16

Lot of companies put a lot of emphasis on the, the technology

Avery | Tilled, Founder & CEO: 00:12:18

and the, and the pricing.

Avery | Tilled, Founder & CEO: 00:12:20

And really the, the go-to-market strategy is an afterthought,

Avery | Tilled, Founder & CEO: 00:12:23

for these software businesses and for me, even before tilled in my consulting

Avery | Tilled, Founder & CEO: 00:12:28

days, a lot of what I ended up doing after helping them negotiate the contracts

Avery | Tilled, Founder & CEO: 00:12:32

and get the technology integrated.

Avery | Tilled, Founder & CEO: 00:12:34

Was actually staying to help them think through

Avery | Tilled, Founder & CEO: 00:12:36

What's the pricing strategy?

Avery | Tilled, Founder & CEO: 00:12:37

How do we advertise this to the customers?

Avery | Tilled, Founder & CEO: 00:12:40

Oh wait, we need to analyze statements.

Avery | Tilled, Founder & CEO: 00:12:42

How do we, how do we do that?

Avery | Tilled, Founder & CEO: 00:12:43

And so there's all these nuances of how you actually sell payments to your small

Avery | Tilled, Founder & CEO: 00:12:48

business customers and create the right program, you know, to attract them.

Avery | Tilled, Founder & CEO: 00:12:51

For a lot of software companies becomes this afterthought and really, um,

Avery | Tilled, Founder & CEO: 00:12:56

ends up being a drag on the overall performance of that integrated payment.

Tedd Huff | Fintech Confidential, Host:

: 00:13:05

When you're looking to bring somebody on

Tedd Huff | Fintech Confidential, Host:

: 00:13:07

board, uh, with tilled and you're building out that program, kind of walk me through

Tedd Huff | Fintech Confidential, Host:

: 00:13:14

the identification of, of where they're at, um, in their overarching journey.

Tedd Huff | Fintech Confidential, Host:

: 00:13:21

I'm assuming you probably have a handful of folks that are.

Tedd Huff | Fintech Confidential, Host:

: 00:13:25

That have done a ton of research but haven't implemented anything.

Tedd Huff | Fintech Confidential, Host:

: 00:13:28

You have some people who have done literally nothing other than said,

Tedd Huff | Fintech Confidential, Host:

: 00:13:31

Hey, we integrated to Stripe.

Tedd Huff | Fintech Confidential, Host:

: 00:13:33

What's our next step?

Tedd Huff | Fintech Confidential, Host:

: 00:13:35

And then you've got folks who are, have been working with the legacy

Tedd Huff | Fintech Confidential, Host:

: 00:13:39

players forever and are trying to simplify their overall process.

Tedd Huff | Fintech Confidential, Host:

: 00:13:43

Pick one I guess, and uh, kind of walk us through like how you approach that with

Tedd Huff | Fintech Confidential, Host:

: 00:13:49

. Caleb Avery | Tilled, Founder & CEO: Sure.

Tedd Huff | Fintech Confidential, Host:

: 00:13:50

So I, I'd say a, a use case that, that we get quite often are actually

Tedd Huff | Fintech Confidential, Host:

: 00:13:53

quite large, uh, businesses that may have had a, an integrated payment,

Tedd Huff | Fintech Confidential, Host:

: 00:13:58

Solution previously, but it was powered by authorized.net and they were just allowing

Tedd Huff | Fintech Confidential, Host:

: 00:14:02

all of their customers to bring their own processor, you know, to, to the table.

Tedd Huff | Fintech Confidential, Host:

: 00:14:06

And so we've actually got a couple of customers that have.

Tedd Huff | Fintech Confidential, Host:

: 00:14:08

A billion plus dollars in volume flowing through their platform.

Tedd Huff | Fintech Confidential, Host:

: 00:14:11

But historically they were making $0 in revenue on, on those payments.

Tedd Huff | Fintech Confidential, Host:

: 00:14:15

And so they'd gone through the technical integration to get authorized.net,

Tedd Huff | Fintech Confidential, Host:

: 00:14:19

set up.

Tedd Huff | Fintech Confidential, Host:

: 00:14:20

They'd really struggled on the, on the pricing aspect cause they weren't

Tedd Huff | Fintech Confidential, Host:

: 00:14:22

generating, you know, any revenue and then they weren't really involved in

Tedd Huff | Fintech Confidential, Host:

: 00:14:25

the sales or the go-to-market aspect.

Tedd Huff | Fintech Confidential, Host:

: 00:14:27

Of selling that solution.

Tedd Huff | Fintech Confidential, Host:

: 00:14:29

Starts out with, you know, helping them understand technically, you know,

Tedd Huff | Fintech Confidential, Host:

: 00:14:32

how does our integration differ from, from authorized.net and getting them,

Tedd Huff | Fintech Confidential, Host:

: 00:14:35

integrated onto to the platform.

Tedd Huff | Fintech Confidential, Host:

: 00:14:37

But really the key in my mind to the success of that program comes

Tedd Huff | Fintech Confidential, Host:

: 00:14:40

down to those next two components.

Tedd Huff | Fintech Confidential, Host:

: 00:14:41

How do we think through the pricing strategy and how do we think through,

Tedd Huff | Fintech Confidential, Host:

: 00:14:44

that go-to market?

Tedd Huff | Fintech Confidential, Host:

: 00:14:45

And so, you know, with one of our, our customers, In particular, we, we

Tedd Huff | Fintech Confidential, Host:

: 00:14:49

work with them to, to actually think through a repricing of their core,

Tedd Huff | Fintech Confidential, Host:

: 00:14:53

platform.

Tedd Huff | Fintech Confidential, Host:

: 00:14:53

Where historically I think they were charging like 59, 99 a month for

Tedd Huff | Fintech Confidential, Host:

: 00:14:57

their, their checkout, uh, software.

Tedd Huff | Fintech Confidential, Host:

: 00:14:59

And now if you choose the integrated payment solution, they're going to

Tedd Huff | Fintech Confidential, Host:

: 00:15:03

market at 1999 a month for the software fee if you bundle in the payments.

Tedd Huff | Fintech Confidential, Host:

: 00:15:07

And all of a sudden that change in the strategy has driven, you

Tedd Huff | Fintech Confidential, Host:

: 00:15:10

know, pretty exciting adoption,

Tedd Huff | Fintech Confidential, Host:

: 00:15:12

, of the, the payment.

Tedd Huff | Fintech Confidential, Host:

: 00:15:13

And then we're helping them with sales and marketing, uh, support.

Tedd Huff | Fintech Confidential, Host:

: 00:15:17

And so from a marketing perspective, working with them to design in-app

Tedd Huff | Fintech Confidential, Host:

: 00:15:21

messaging campaigns, email campaigns, landing pages to actually help drive the

Tedd Huff | Fintech Confidential, Host:

: 00:15:25

conversion of the underlying merchant,

Tedd Huff | Fintech Confidential, Host:

: 00:15:27

portfolio because they have a very sizable existing customer base

Tedd Huff | Fintech Confidential, Host:

: 00:15:31

that's already using their software.

Tedd Huff | Fintech Confidential, Host:

: 00:15:33

That's already processing payments, you know, through their platform

Tedd Huff | Fintech Confidential, Host:

: 00:15:36

today through authorized.net.

Tedd Huff | Fintech Confidential, Host:

: 00:15:37

And so those are captive accounts,

Tedd Huff | Fintech Confidential, Host:

: 00:15:38

, that we should be able to transition, you know, over to till.

Tedd Huff | Fintech Confidential, Host:

: 00:15:41

But that marketing campaign, uh, is something that's an

Tedd Huff | Fintech Confidential, Host:

: 00:15:45

incredibly important part,

Tedd Huff | Fintech Confidential, Host:

: 00:15:45

and then if they need assistance with statement analysis or speaking, you

Tedd Huff | Fintech Confidential, Host:

: 00:15:49

know, with some of the underlying merchants to help convert those over,

Tedd Huff | Fintech Confidential, Host:

: 00:15:51

you know, we're happy to do that.

Tedd Huff | Fintech Confidential, Host:

: 00:15:53

those additional.

Tedd Huff | Fintech Confidential, Host:

: 00:15:54

Support services, I think are a major differentiator,

Tedd Huff | Fintech Confidential, Host:

: 00:15:58

for Tilled and something that we're really proud to, to offer to our partners.

Tedd Huff | Fintech Confidential, Host:

: 00:16:01

So you brought up something that

Tedd Huff | Fintech Confidential, Host:

: 00:16:03

I, I find interesting is that.

Tedd Huff | Fintech Confidential, Host:

: 00:16:05

Some of these customers you have are coming from an environment

Tedd Huff | Fintech Confidential, Host:

: 00:16:09

where maybe they had partnered

Tedd Huff | Fintech Confidential, Host:

: 00:16:12

With a merchant level sales partner or another ISO that they

Tedd Huff | Fintech Confidential, Host:

: 00:16:17

would refer the business over to.

Tedd Huff | Fintech Confidential, Host:

: 00:16:20

How are you handling that nice fine line of, of that referral model?

Tedd Huff | Fintech Confidential, Host:

: 00:16:28

To the direct model.

Tedd Huff | Fintech Confidential, Host:

: 00:16:29

Are you offering this also out to the ISOs and the merchant

Tedd Huff | Fintech Confidential, Host:

: 00:16:33

level salespeople as well?

Tedd Huff | Fintech Confidential, Host:

: 00:16:35

As a, as an offering as well?

Avery | Tilled, Founder & CEO: 00:16:38

In terms of the, the ISO offering today,

Avery | Tilled, Founder & CEO: 00:16:41

we work with ISOs agents payments consultants in the capacity that they

Avery | Tilled, Founder & CEO: 00:16:46

refer software companies to Tilled.

Avery | Tilled, Founder & CEO: 00:16:48

Uh, we don't yet offer ISOs and agents the ability to board direct merchants,

Avery | Tilled, Founder & CEO: 00:16:53

uh, you know, through to, to Tilled that.

Avery | Tilled, Founder & CEO: 00:16:55

That's something that's, that's coming soon.

Avery | Tilled, Founder & CEO: 00:16:57

And maybe we can talk about on a, on another episode,

Avery | Tilled, Founder & CEO: 00:16:59

at a later date.

Avery | Tilled, Founder & CEO: 00:17:00

Um, but in terms of the, the first part of your, your question, uh, for us,

Avery | Tilled, Founder & CEO: 00:17:04

it's really trying to meet the customer where they are in their journey, and

Avery | Tilled, Founder & CEO: 00:17:07

understand what their goals are and,

Avery | Tilled, Founder & CEO: 00:17:09

where they, they want to operate.

Avery | Tilled, Founder & CEO: 00:17:10

And so I think we, we really approach every relationship with

Avery | Tilled, Founder & CEO: 00:17:14

a, a consultative approach to understand what are you doing today?

Avery | Tilled, Founder & CEO: 00:17:17

How is it going , and where do you really want to be?

Avery | Tilled, Founder & CEO: 00:17:20

And for a lot of these companies, they really want to maintain that

Avery | Tilled, Founder & CEO: 00:17:24

relationship with their customer.

Avery | Tilled, Founder & CEO: 00:17:26

They want to do the sales, they want to handle the tier one support.

Avery | Tilled, Founder & CEO: 00:17:29

So if their customers have an issue,

Avery | Tilled, Founder & CEO: 00:17:31

They're calling them.

Avery | Tilled, Founder & CEO: 00:17:31

But if you're partnering with.

Avery | Tilled, Founder & CEO: 00:17:34

Uh, you know, a a traditional, you know, ISO or, or sales, you

Avery | Tilled, Founder & CEO: 00:17:37

know, organization to, to offer,

Avery | Tilled, Founder & CEO: 00:17:39

your solution, you really lose a lot of that control and you

Avery | Tilled, Founder & CEO: 00:17:42

lose that relationship, you know, with your, your customer.

Avery | Tilled, Founder & CEO: 00:17:45

And so

Avery | Tilled, Founder & CEO: 00:17:45

there's a huge educational component to what we do to help

Avery | Tilled, Founder & CEO: 00:17:49

them understand what the options.

Avery | Tilled, Founder & CEO: 00:17:51

Are, and then allow them to,

Avery | Tilled, Founder & CEO: 00:17:53

choose your own adventure and, and help them understand like, here's the

Avery | Tilled, Founder & CEO: 00:17:56

different options that are available and, and frankly, different options make

Avery | Tilled, Founder & CEO: 00:17:59

sense for, for different organizations.

Avery | Tilled, Founder & CEO: 00:18:01

And so we have the flexibility.

Avery | Tilled, Founder & CEO: 00:18:02

If you want us to be tier one support, we can do that.

Avery | Tilled, Founder & CEO: 00:18:05

If you want us to operate as tier two support and support your team,

Avery | Tilled, Founder & CEO: 00:18:08

we can do that.

Avery | Tilled, Founder & CEO: 00:18:08

If you want us to train your team how to.

Avery | Tilled, Founder & CEO: 00:18:11

, we can do that.

Avery | Tilled, Founder & CEO: 00:18:11

If you want us to sell it for you, you know, we can help do that as well.

Avery | Tilled, Founder & CEO: 00:18:14

And so it's really having that, that variety of options, the consultative

Avery | Tilled, Founder & CEO: 00:18:18

approach, and really trying to, to meet them where they are and help them achieve,

Avery | Tilled, Founder & CEO: 00:18:21

their goals.

Avery | Tilled, Founder & CEO: 00:18:22

Uh, and, and just being flexible in the process that, that I think, you know,

Avery | Tilled, Founder & CEO: 00:18:25

has led us to, to where we are today.

Tedd Huff | Fintech Confidential, Host:

: 00:18:28

When you look at the diverse

Tedd Huff | Fintech Confidential, Host:

: 00:18:31

group of clients that you have and how they're approaching their

Tedd Huff | Fintech Confidential, Host:

: 00:18:35

payments and FinTech problems,

Tedd Huff | Fintech Confidential, Host:

: 00:18:38

what opportunities do you see ahead in like the next three to five years?

Caleb Avery | Tilled, Founder & CEO:

: 00:18:43

When I think about the opportunity within

Caleb Avery | Tilled, Founder & CEO:

: 00:18:45

the, the vertical software landscape, I feel like embedded payments is the, the,

Caleb Avery | Tilled, Founder & CEO:

: 00:18:51

the beachhead and, and typically the first opportunity for embedded FinTech.

Caleb Avery | Tilled, Founder & CEO:

: 00:18:55

That a lot of vertical software companies look at, but it's not the only

Caleb Avery | Tilled, Founder & CEO:

: 00:18:58

opportunity for these vertical software companies to, you know, one further

Caleb Avery | Tilled, Founder & CEO:

: 00:19:03

monetize their, their customer base.

Caleb Avery | Tilled, Founder & CEO:

: 00:19:05

But I think for a lot of them, as they look at adding on additional, uh,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:09

product offerings, it's about providing a better experience and a better,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:13

holistic offering to, to their customers and creating a, a stickier offering.

Caleb Avery | Tilled, Founder & CEO:

: 00:19:17

And for me, when I, when I look at the potential, you know, options

Caleb Avery | Tilled, Founder & CEO:

: 00:19:20

available, integrated lending in particular is one that that gets me,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:24

excited where we're starting to, to look at what we could do to offer a

Caleb Avery | Tilled, Founder & CEO:

: 00:19:29

turnkey embedded lending solution to the software platforms that partner with

Caleb Avery | Tilled, Founder & CEO:

: 00:19:33

Till where if they wanna offer their merchants access to, to capital, which,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:37

let's be honest, in the current macro economic environment, a lot of people

Caleb Avery | Tilled, Founder & CEO:

: 00:19:41

are looking at ways to, to get access,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:42

to affordable capital solutions.

Caleb Avery | Tilled, Founder & CEO:

: 00:19:45

And I feel like we are in a great position to offer that infrastructure.

Caleb Avery | Tilled, Founder & CEO:

: 00:19:48

But vertical software companies with the relationship that they have with their

Caleb Avery | Tilled, Founder & CEO:

: 00:19:52

customers are in a fantastic position to be able to offer that type, uh,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:56

of additional, uh, value add product,

Caleb Avery | Tilled, Founder & CEO:

: 00:19:58

to their customers.

Caleb Avery | Tilled, Founder & CEO:

: 00:19:59

And there's other opportunities depending on the, the vertical within.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:03

Um, you know, insurance and, and different types of additional,

Caleb Avery | Tilled, Founder & CEO:

: 00:20:05

FinTech add-ons.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:07

But that's, that's where mine my mind goes is the other opportunities

Caleb Avery | Tilled, Founder & CEO:

: 00:20:10

for embedded, uh, FinTech solutions.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:12

Uh, and if we can help, you know, bring those to, to market,

Caleb Avery | Tilled, Founder & CEO:

: 00:20:15

faster and, and easier for our customers, you know, that's,

Caleb Avery | Tilled, Founder & CEO:

: 00:20:17

that's where we'd love to be.

Tedd Huff | Fintech Confidential, Host:

: 00:20:21

What would you want to share with the

Tedd Huff | Fintech Confidential, Host:

: 00:20:24

audience that could change their business and their personal perspective on

Tedd Huff | Fintech Confidential, Host:

: 00:20:31

monetizing payments for their software?

Tedd Huff | Fintech Confidential, Host:

: 00:20:33

What would that be?

Caleb Avery | Tilled, Founder & CEO:

: 00:20:36

So I think that the one thing that I

Caleb Avery | Tilled, Founder & CEO:

: 00:20:38

would want to, uh, hit home is really the, the order of magnitude of the,

Caleb Avery | Tilled, Founder & CEO:

: 00:20:43

the opportunity for, for these software companies some, some public examples.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:47

Companies like, uh, Shopify companies like Toast.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:50

Uh, for, for these organizations, uh, they make between two

Caleb Avery | Tilled, Founder & CEO:

: 00:20:54

and four times as much money.

Caleb Avery | Tilled, Founder & CEO:

: 00:20:57

on integrated payments as they do on their core software offering.

Caleb Avery | Tilled, Founder & CEO:

: 00:21:01

And so,

Caleb Avery | Tilled, Founder & CEO:

: 00:21:02

if you're a, a vertical software company out there today that has not

Caleb Avery | Tilled, Founder & CEO:

: 00:21:05

even looked at the opportunity to, to monetize your, your payments, you

Caleb Avery | Tilled, Founder & CEO:

: 00:21:09

may be very surprised with how much money you're, you're actually leaving,

Caleb Avery | Tilled, Founder & CEO:

: 00:21:12

on the table.

Caleb Avery | Tilled, Founder & CEO:

: 00:21:13

And especially given how easy it can be to implement.

Caleb Avery | Tilled, Founder & CEO:

: 00:21:16

A solution like till, you know, in under 30 days, you could be up and

Caleb Avery | Tilled, Founder & CEO:

: 00:21:20

running, monetizing those payments and potentially double, triple or quadruple,

Caleb Avery | Tilled, Founder & CEO:

: 00:21:24

your margins on, on your business, which I, I have to imagine for founders out

Caleb Avery | Tilled, Founder & CEO:

: 00:21:29

there, the idea of at least doubling your margins has to be at least somewhat, uh,

Caleb Avery | Tilled, Founder & CEO:

: 00:21:32

appealing to, to any founder out there.

Tedd Huff | Fintech Confidential, Host:

: 00:21:35

So if you were to start tilled

Tedd Huff | Fintech Confidential, Host:

: 00:21:36

from scratch all over again,

Tedd Huff | Fintech Confidential, Host:

: 00:21:39

not regret, but what would you have done differently?

Caleb Avery | Tilled, Founder & CEO:

: 00:21:44

What would I

Tedd Huff | Fintech Confidential, Host:

: 00:21:45

Not from a perspective of regret,

Tedd Huff | Fintech Confidential, Host:

: 00:21:47

but more of like, Hey, we, I, I could have done this differently, or I

Tedd Huff | Fintech Confidential, Host:

: 00:21:52

could have, or would've been able to capitalize on this a little bit better.

Avery | Tilled, Founder & CEO: 00:22:00

Yeah.

Avery | Tilled, Founder & CEO: 00:22:00

It's a, it's a fascinating question.

Avery | Tilled, Founder & CEO: 00:22:02

Kind of thinking back through the, the journey of almost four years,

Avery | Tilled, Founder & CEO: 00:22:05

at, at this point, one of the, the decisions that, that I made, Early on

Avery | Tilled, Founder & CEO: 00:22:09

was to, to really hold off on, on raising outside . Capital, for as long as I could.

Avery | Tilled, Founder & CEO: 00:22:14

Uh, looking back, um, I, I don't know that I regret that decision cuz it still

Avery | Tilled, Founder & CEO: 00:22:19

led me to, to where we are, uh, today.

Avery | Tilled, Founder & CEO: 00:22:21

But I think if I were doing it over again, there's a, there's

Avery | Tilled, Founder & CEO: 00:22:23

a pretty high probability that I would've looked, uh, at raising,

Avery | Tilled, Founder & CEO: 00:22:26

a little bit more outside capital.

Avery | Tilled, Founder & CEO: 00:22:28

Uh, earlier on in the, in the business to really accelerate our ability to, to

Avery | Tilled, Founder & CEO: 00:22:32

bring, you know, the solution to market.

Avery | Tilled, Founder & CEO: 00:22:34

Whereas, you know, we, we didn't raise outside funding for almost

Avery | Tilled, Founder & CEO: 00:22:37

two years, uh, into the business.

Avery | Tilled, Founder & CEO: 00:22:39

it was a lean, mean, uh, operating machine in the, in the early uh, days,

Avery | Tilled, Founder & CEO: 00:22:43

which, um, you know, again, no, no real regrets, but that, that's probably the

Avery | Tilled, Founder & CEO: 00:22:47

one thing that, that I might change if I, if I did it all over again.

Tedd Huff | Fintech Confidential, Host:

: 00:22:51

So we've talked about a

Tedd Huff | Fintech Confidential, Host:

: 00:22:52

whole bunch of things today.

Tedd Huff | Fintech Confidential, Host:

: 00:22:54

I've probably missed a handful of things.

Tedd Huff | Fintech Confidential, Host:

: 00:22:57

So what parting message do you want to give?

Avery | Tilled, Founder & CEO: 00:23:01

I would love for, for listeners just to,

Avery | Tilled, Founder & CEO: 00:23:03

to understand the, the excitement and how large the, the opportunity is for,

Avery | Tilled, Founder & CEO: 00:23:08

for embedded payments and, and integrated payments within the, the landscape.

Avery | Tilled, Founder & CEO: 00:23:12

Especially for, for those, uh, that are already, you know, operating within the,

Avery | Tilled, Founder & CEO: 00:23:17

the payment landscape, maybe out there selling, you know, to, to traditional

Avery | Tilled, Founder & CEO: 00:23:21

Merchants, I think for a lot of ISOs and agents, they're not yet aware of

Avery | Tilled, Founder & CEO: 00:23:25

how exciting and how high growth this opportunity is, you know, within the, the

Avery | Tilled, Founder & CEO: 00:23:29

I S V and the vertical software landscape.

Avery | Tilled, Founder & CEO: 00:23:31

And

Avery | Tilled, Founder & CEO: 00:23:32

if you're curious to learn more, you know, about the, the

Avery | Tilled, Founder & CEO: 00:23:34

opportunity or how to go about,

Avery | Tilled, Founder & CEO: 00:23:36

selling to, to ISVs and vertical software companies, our team would

Avery | Tilled, Founder & CEO: 00:23:39

love, you know, to, to speak with you.

Avery | Tilled, Founder & CEO: 00:23:41

Um, you know about that, about that opportunity.

| Fintech Confidential, Host: 00:23:44

So what is the best way for them to connect

| Fintech Confidential, Host: 00:23:47

with you and the Till team to learn more?

Avery | Tilled, Founder & CEO: 00:23:50

So if you wanna connect with me, I'm very active

Avery | Tilled, Founder & CEO: 00:23:52

on LinkedIn, so following me, Caleb Avery, uh, on LinkedIn is a, is a fantastic way

Avery | Tilled, Founder & CEO: 00:23:56

to stay up to date on, Tilled my life, my kids' life, uh, and just follow,

Avery | Tilled, Founder & CEO: 00:24:00

what's going on in in my world.

Avery | Tilled, Founder & CEO: 00:24:02

If you wanna learn more about Tilled, LinkedIn is a, is a great place,

Avery | Tilled, Founder & CEO: 00:24:05

uh, to, to follow Tilled as well.

Avery | Tilled, Founder & CEO: 00:24:06

Our website,

Avery | Tilled, Founder & CEO: 00:24:07

is a fantastic resource with tons of downloadable content.

Avery | Tilled, Founder & CEO: 00:24:10

Blogs and educational, uh, resources.

Avery | Tilled, Founder & CEO: 00:24:12

If you're already ready to sign up and you want to get in touch, uh, with the

Avery | Tilled, Founder & CEO: 00:24:16

team, you can email us@partnerstill.com.

Tedd Huff | Fintech Confidential, Host:

: 00:24:19

I'm gonna go ahead and make sure

Tedd Huff | Fintech Confidential, Host:

: 00:24:20

all of that is in the show notes.

Tedd Huff | Fintech Confidential, Host:

: 00:24:22

It's also in all the descriptions, everything that way you think can

Tedd Huff | Fintech Confidential, Host:

: 00:24:25

directly reach out to you and the team.

Tedd Huff | Fintech Confidential, Host:

: 00:24:27

I wanna say, man, thank you so much.

Tedd Huff | Fintech Confidential, Host:

: 00:24:29

I've learned a lot from today's discussion and really appreciate the

Tedd Huff | Fintech Confidential, Host:

: 00:24:34

perspective you bring to the table.

Caleb Avery | Tilled, Founder & CEO:

: 00:24:36

Thanks so much for

Caleb Avery | Tilled, Founder & CEO:

: 00:24:37

having me on today, Ted.