Getting Paid Faster and More Securely with Ionia’s Marshall Greenwald

Episode Overview

Marshall Greenwald is the visionary founder and CEO of Ionia, a fintech company that is revolutionizing the payments industry by simplifying the transaction process between merchants and consumers. With over 20 years of experience in payments and financial services, Marshall has built a reputation as an industry disruptor, addressing long-standing inefficiencies in traditional payment systems. His career began in banking, where he saw firsthand the slow, outdated processes and high costs associated with payments. Frustrated by these barriers, Marshall left his path in law to dive into entrepreneurship and create Ionia, a company dedicated to delivering faster, more secure, and cost-efficient payments to businesses of all sizes.

Under Marshall’s leadership, Ionia has grown from a small startup to a platform processing over $10 million monthly in its beta phase, with demand from enterprises and small businesses alike. His approach focuses on cutting out the middlemen that slow down transactions, reducing costs, and utilizing AI technology to eliminate fraud at the source. His innovative solution allows merchants to receive payments instantly without the typical delays of 2-3 business days, empowering them to improve cash flow and navigate financial challenges more effectively, especially in times of economic uncertainty.

Marshall’s vision for Ionia extends beyond fintech innovation; he is driven by a passion to help small businesses thrive. By creating a platform that reduces friction between consumers and merchants, Marshall aims to transform the way payments are processed on a global scale. His work is not only changing the landscape for business owners but also setting a new standard for customer-centric, secure payment systems. With an eye toward the future, he continues to push the boundaries of what’s possible in the world of digital payments, ensuring that both merchants and consumers benefit from the advancements in financial technology.

Episode Transcript

Kevin Rosenquist: Hey, welcome to Paypod Where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is Kevin Rosenquist and thanks for listening. I made a joke during my interview with Marshall Greenwald and said that what he’s building at Ionia is pretty punk rock, and honestly, it is. He’s working hard to disrupt an industry that has been largely the same for a long time. He’s speeding up the payments process, helping merchants get paid far faster than ever before. No more waiting 3 or 4 days to get your payments. As a merchant, that sounds pretty awesome. I hope you enjoyed this episode as much as I did recording it. Marshall is a fascinating person with a great vision and a huge desire to help people. So enough of me introducing him. Please welcome Marshall Greenwald. You founded Ionia almost ten years ago now, but you have over 20 years of experience in payments. What led you to the decision to become an entrepreneur?

Marshall Greenwald: That’s a great question. I actually started my payment career working for a bank that banks no longer got absorbed by a bigger bank, but I think I kind of started my thing out of frustration, right? I was seeing things that weren’t working. I was 18 years old and the bank had a big credit card division, but it was very poorly run in my opinion, and I saw things that could be better. So I just kind of went out and tried to figure it out on my own.

Kevin Rosenquist: Just that simple.

Marshall Greenwald: Oh yeah. It might have been a little harder than that. I’m sure I had some tough days, but, you know, I had the privilege of being in a spot where I could take some time to kind of. I had multiple kind of side gigs and so I could kind of take some time to learn that business and, and try to put the pieces together. But, you know, ultimately what it came down to was, you know, I really am passionate about helping people and starting to learn what small businesses need. I would just go out and talk to them and they’d kind of educate me on what they do, what they pay, how it works. And so I was I was very lucky to have a lot of very patient first customers who would kind of teach me the ropes so I could help them in return.

Kevin Rosenquist: So is fintech something that you, you were always interested in, or did you kind of fall into it?

Marshall Greenwald: Before that time? I actually thought I was going to be an attorney, pretty different. I was on the school path and I was a couple years into school and even had a full ride. But my mom still laments that I left school to pursue entrepreneurship because she’s a teacher and, you know, wishes I would have gotten my degree in college. But, you know, I had this opportunity to kind of jump in and do something. And no, I definitely never pictured myself when I first heard about merchant accounts, which is an industry term that’s thrown around a lot. I thought it had something to do with, , you know, merchant Marines or something. I had no idea what that meant. So I definitely had a lot of learning to do. But I think the sales background and the customer service background and really caring about the individuals and their businesses and trying to help them, I think really drove me to look at this as a long term career path. And, you know, within a couple of years, I grew the company and was really loving it and could never see myself doing anything else at that point.

Kevin Rosenquist: if it makes you feel better. I’ve known a lot of people over the years who started out in law and are doing something completely different. I’ve known people who got their degree and were practicing and then went and did something totally different afterwards. So yeah, good thing you figured it out when you did, I suppose, right?

Marshall Greenwald: Yeah, I guess, the good news is I didn’t spend years and years pursuing a career that I may not have been happy in. And I think a lot of people don’t have that luxury right to do they don’t discover what they want until much later in life. So I’m glad that I love what I do and found it pretty early in life. So yeah.

Kevin Rosenquist: That’s that’s great. I would imagine the payments industry looked a lot different when you started between technological advancements and consumer habit changes. You know, as I talked to more people in the fintech world on this show, I feel like we’re sort of maybe on the precipice of even more significant changes, like, like we’re going to look back in 5 or 10 years or even 2 or 3 and be amazed at how different the landscape is. Do you agree with that?

Marshall Greenwald: I do, I think in the US market it’s very fragmented. There’s thousands of banks, thousands, tens of thousands maybe of people who are in the fintech space or companies in the fintech space. And so it’s a little harder to adapt, get new technology to market here. I think if we look to other markets where it’s a little bit faster for innovation, fewer moving parts, we can see some of the things that might be coming our way. And I think, you know, the great American entrepreneurial spirit, we do see a lot of innovation here as well, things that might only be possible in the US market because of its size or because of some of the consumer behaviors or whatever. But yeah, I think, you know, I think back to 1999 when I bought a kit that was just a black case with a old credit card terminal with a separate printer that you had to connect to it, you know, this big old clunky thing that I would carry around, and I would go tell businesses like what it meant to accept credit cards and debit cards, right? Because not everyone did. Yet, although many businesses had started to, not everyone did. So you’d go into a hair salon or a nail salon or whatever, a restaurant you’d tell them about, you know, accepting cards, how it works, that they pay a fee, and now it’s just kind of necessary for most businesses that are consumer goods and services. They’ve been taking cards all along, and they kind of have to in most businesses. E-commerce being born, you know, during that era, a couple years later, really starting to pick up, was a huge change. But yeah, I think the next decade or two are going to see significant improvements to user experience, significant innovation on, , ways of financing a payment. We saw that in recent years with the buy now, pay later kind of, which wasn’t a new thing, but kind of a new flavor of that. Yeah. Conser financing.

Kevin Rosenquist: So you’re right, it’s not new, but it’s definitely more prevalent in a lot of different spaces now too.

Marshall Greenwald: Yeah, I think of it like the dentist had care credit for forever like flooring companies. A lot of those had small businesses. What was it called? Capital one small business. No. GE small business. So these things existed, but they’re kind of niche and they were kind of clunky. And now they’ve got like the consumer app or the consumer kind of controls that experience, can choose who they want to finance it through, do it instantly. They can use their bank account to qualify, not just credit. Like all of that made it kind of prevalent in many industries that wouldn’t normally have, you know, you can’t normally think of going to like, you know, a consumer electronics store and getting a consumer finance option for your, you know, $100 purchase. Right, right. But now you can do that in a heartbeat. And there’s probably, you know, a dozen or more options on where you could go do that.

Kevin Rosenquist: So I was actually just a little while ago on the Lowe’s website and not a sponsor, by the way, but they like they had a buy now pay later, you know, and, and, you know, back in the day, I mean, you could still get a Lowe’s card, I’m pretty sure. But you know, I remember my parents having the, you know, Sears card and the, you know, like everything else, the all the different cards for different places. And now it’s almost like you don’t need that because you’re just doing. They’re just you’re just doing a buy now, pay later instead of that.

Marshall Greenwald: Yeah. And the buy now, pay later has gone from kind of paying for, which is what we kind of traditionally think of for buy now, pay later to also being longer term financing options as well. So they’ve definitely cut into that same, same opportunity of customers that the store card was really taking. So it’s definitely cut into some of the existing businesses. But I think what we’re going to really see is the the continual iteration of these products and then the merging of these. Right. We’re already seeing companies like Klarna and Sezzle start to integrate rewards, start to integrate other payment options, like as all of this becomes more and more popular, there’s going to be more opportunities to build them into like one cohesive solution for the consumer and the merchant.

Kevin Rosenquist: , yeah. And it’s funny you mentioned it before. Like, it’s weird to think that people didn’t take cards, you know, in 99, like you said, because it doesn’t seem like it’s that long ago. But I guess you’re talking 25 years now. I’ve been watching the Olympics, and they’re like, they haven’t won since 1997. And I’m like, I remember 1997 doesn’t seem that long ago, but you’re but you’re right. It’s funny to think about like now. It’s just like if someone were to say, we don’t accept cards, you’re like, wait, what?

Marshall Greenwald: Yeah, I know of, like two businesses in town that don’t take cards and they’re like, known for it, right? There’s a hot dog place that’s been around since forever. Family owned, and they just won’t take cards, but they have an ATM in there, their little waiting area. But they are always busy. But they’re, you know, most businesses would not have that luxury if you opened a competing hot dog shop and, you know, didn’t take cards, you probably wouldn’t make it very long.

Kevin Rosenquist: So there’s a bar here in town, same thing that doesn’t take cards. And it’s just sort of like.

Marshall Greenwald: Yeah, it’s you know, I think it’s kind of a weird thing that works for a couple of businesses here and there, especially those that have been around a long time and kind of have that reputation. But it’s really hard to think about starting a business and cutting off, you know, 75% of the ways that your customers could pay you.

Kevin Rosenquist: Yeah, yeah, yeah. It’s almost got to be like like you said, like kind of a kitschy thing, like an old school restaurant or something like that. For sure.

Marshall Greenwald: That’s the word I was looking for kitschy.

Kevin Rosenquist: There you go. That’s good.

Marshall Greenwald: Word for it.

Kevin Rosenquist: Obviously AI and quantum computing, you know, are obviously changing the game across all industries, everywhere. You know, many people are super excited. Many are super freaked out. Most are probably somewhere in between. What are you most excited about and what concerns you the most about these cutting edge technologies?

Marshall Greenwald: Yeah, they actually kind of cut against each other, right. So the things I’m excited about are also things I’m scared about. So the opportunity to eliminate fraud using AI is pretty compelling. But then if the fraudsters are using AI, you know who gets there first, right? Who gets that? That implementation right. For their purposes, the fastest and my biggest concern around it is that we tend to be playing catch up with the criminal element. It’s like reactive usually. And I think what needs to happen is we need to be proactive in how we approach the fraud problems. You know, it’s certainly not getting better. I think last month I read 19% increase in fraud for e-commerce. You know, card payments. It’s crazy. And it already was a staggering number. It’s not going to get better. So I suspect that some of the criminal element is already using AI for it. And you know, heaven forbid they ever get to using quant computing to do it. But we just need to catch up. As an industry, we need to be on the forefront of thinking about how we can prevent fraud using AI. I think, you know, moving money securely and quickly and efficiently with very low cost is all possible. And you can see that, like, you know, I can send you money on Venmo right now as a person to person or P2P payment, and it’s going to get to you basically immediately. It’s going to cost you nothing, and it’s going to be fairly secure. Right. And so can we kind of imitate that across all transaction types with all different entity types? I think it’s possible. But there’s a lot of work to be done.

Kevin Rosenquist: Do you think the increase that you said that the 18% increase or 19% increase, do you think that’s because of AI tools or because they’re being utilized?

Marshall Greenwald: Sadly, that’s probably not necessary for the criminals yet. I mean, think about it. Every time you pay somebody with a card, you’re giving them your card information, whether it’s a physical card or you type it into a website. What do they need? What does somebody need in order to use your card, your card nber expiration? If it’s e-commerce, they’ll need your billing address and they need your CVV. If it’s in person, maybe they need a Pin. Not always. And those things are compromised. Like, you know, massive hacks that come into systems with hundreds of millions of card records or tens of millions of card records happen all the time, very regularly, sadly. And so it’s probably not necessary for criminals to use AI. I suspect that they’re using technology like bots and things. Well, we know they’re using things like bots, but I suspect that’s more indicative of why there’s an increase right now. Merchants have this balancing act to play, right. They want to let you through if you’re a legitimate customer and they want to stop you if you’re not. But they don’t have a lot of tools to tell whether you’re the person that this card belongs to or not. So they got to play this balancing act between fraud, you know, letting some fraud through versus cutting off the source of revenue through false positives. You know, saying you’re you’re a bad guy. We don’t take your payment when you’re not. , or on the other hand, just introducing a ton of friction on the checkout process, which consers aren’t very patient with that in the US at least.

Kevin Rosenquist: Yeah, we’ve talked about that on the podcast before, and that’s totally true. I mean, nobody really wants to, you know, we all get so frustrated when we have to do like two factor authentication or you got to do this or that, put in this code. What’s this code I don’t remember this password. Like, I mean it gets frustrating. But you know, I mean, at the same time we want to be secure and safe and and don’t want fraud. So it’s a yeah I could see the balancing act being very difficult.

Marshall Greenwald: Yeah. And merchants don’t have the tools. So some tools are coming to market now that leverage AI or other technologies to help merchants with that challenge. And I think that’s where we’re going to see a lot of innovation on the AI front. And I don’t know how I don’t know a whole lot about the quant computing opportunities. I think that’s a much more nascent. As nascent as AI is, it’s even a younger, you know, industry. For the quant computing. It’s not widely available. But obviously having that kind of computing power can open up all sorts of opportunities.

Kevin Rosenquist: Yeah. No doubt. Yeah. That’s that’s hopefully doesn’t get into the bad, bad guys hands. At least not not to any sort of large degree.

Marshall Greenwald: So let’s hope let’s hope.

Kevin Rosenquist: All right. So let’s talk Ionia. you have an incredible platform in beta right now. , by the time this comes out, you’ll likely be up and running, I would imagine. Correct.

Marshall Greenwald: Yeah. In fact, it is. It is, just to clarify, it is up and running. Oh, it is okay. All right. Yeah. Our beta merchants process about $10 million a month. Okay. , so pretty significant vole on the beta. We were a little bit surprised. We we were targeting, you know, small vole merchants for the beta initially, but there’s just so much demand for it. We got demand from every, every flavor of merchant you can think of, and even some enterprise scale merchants that are wanting to come on as soon as the beta is over. So yeah, it’s pretty exciting.

Kevin Rosenquist: I bonded with one of your team members, John, over our punk rock roots. He told me that what you’re building is pretty punk rock. You’re disrupting, disrupting an industry that is in need of disrupting. So talk. Talk about what Ionia is doing and how you’re disrupting the payments industry.

Marshall Greenwald: Yeah, it’s.

Marshall Greenwald: And I mentioned some of the changes. It’s changed a lot in 25 years. But fundamentally what’s happening behind the scenes has been the same. Right. And so merchants have the same complaints or challenges with payments today as they did in 1999 when I first started on this journey. And there have been some improvements, there have been tools that are built and it’s a really vibrant community of solutions. The the fundamentals are based on the network design and the design of like, how the payment flows and who it has to go through. And what we’re doing that I think is ultimately the core of the disruption is we’re bringing together the conser and the merchant directly. Whereas before we’ve had all these different parties that had to be involved in order to make a transaction occur, so being able to move money direct from the conser to the merchant, , and do so much more efficiently. No fraud risk at all to the merchant and to do it instantly, right. To be able to give them their funds right now rather than a couple of days from now. It really has a significant impact on a business to be able to deliver that value. And by being able to put them together, we don’t need all these different companies involved. So we cut out a lot of intermediaries and middlemen that increased cost, time and risk of a transaction. So we’re going to make some enemies, I’m sure. But we’re also like very co-operative cooperative with would be competition. So that’s kind of our distribution model as well.

Kevin Rosenquist: Why the need for so many middlemen. What is the what is the reason for that?

Marshall Greenwald: it’s.

Marshall Greenwald: Almost just because it’s legacy in some ways. I mean, it’s it’s the same infrastructure existed for a long time, and no one’s had the financial incentive to actually go change it. Right? They’re they’re making billions of dollars every year doing what they’re doing. You know, what’s their incentive to go go shake things up and reinvent it? There’s essentially just a couple of ways to connect a merchant to a conser using the the existing systems. And those networks are all the big name networks that we know, and they work phenomenally well for their authorizations and connectivity to all these different. I mean, it’s pretty mind blowing if you think about it. You can take a Visa or Mastercard anywhere in the world. Go tap your card and get an authorization and sub two seconds. Right. Just that fast anywhere in the world. And that connectivity is the hub that everyone goes through. But it was designed so long ago in the way that it was. And they’re they’re they’re very innovative companies, by the way, and they have a bunch of technologies that we’ve partnered with and leveraged to make our systems work. But fundamentally, what’s happening is you’ve got one side of the equation that’s merchant related and one side that’s conser related, and they don’t know each other. And so if you’re trying to get, you know, bank A to talk to credit union B, the only way they can do that is through these networks which have all these intermediaries. , it’s almost like if you built a house, you know, 100 years ago, you would naturally have been using different building techniques and different materials than you would build a house today. And so if you were to go rebuild a house, unless you were intentionally doing it, you wouldn’t use those same techniques and materials. So the way that they had to design the system that long ago, which was very innovative at the time, was necessarily complex, had a lot of parties involved to connect all these pieces.

Marshall Greenwald: You we talked a.

Kevin Rosenquist: Little bit about fraud earlier, and one of the things that that I’ve heard from people before, when you say, you know, when you when you speed up these transactions is there’s less time to catch, to catch the bad, the bad people. Yeah. How do you how do you feel about that? Is that a is that an accurate concern?

Marshall Greenwald: It is. We’ve addressed it in a different approach through a different approach. So if you’re talking about kind of the typical standard method today, which is we know fraud is going to happen after that transaction is authorized because there’s really nothing stopping it from going through that’s significant. How do we catch it before we send the money to the merchant and have to reverse it later? What we’re doing is we’re investing our technology on the front end of the transaction to actually marry the ownership of the phone to the ownership of the card and the information given at checkout altogether very, very quickly. You know, with our proprietary technology saying this actually is Marshall’s card as opposed to letting it go through, and then later trying to scrub it for signs of fraud. And we know that that, by the way, looking for signs of fraud is not super effective. One of the techniques that large banks and payment processors use today is looking for things like, okay, the person’s billing address is in Arizona and this purchase is at a retail location in California. Well, this caught me personally when I was on vacation with my kids, right? I took them to California. We’re at the beach. My daughter needs some new board shorts. I go buy some board shorts and it gets declined. Right. The issuer, my bank was like, hey, he doesn’t live in California. And I’m like, well, duh. But people can travel now.

Marshall Greenwald: People travel. People go.

Marshall Greenwald: Places.

Marshall Greenwald: Besides home.

Marshall Greenwald: And I and I also thought, didn’t they see all the gas stations as I got closer and closer to California? And then when I got into California and then I bought food, you know, but they’re doing their best using the tools that exist today. What we’ve done is we’ve invested in the actual verification on the front end, rather than trying to catch it on the back end. So the time no longer is a concern for the settlement of the funds. We don’t need to hold on to it and scrub it for fraud. We’ve done that on the front end without any friction.

Kevin Rosenquist: Wow. That’s incredible. Thank you. Is that something that. How long have you been working on this?

Marshall Greenwald: The initial technology that we’re using for fraud has been developed over the last nine years. Okay. We started with a totally different purpose, but we had to worry about the fraud rates for our merchants. And so we started investing into that. And we really had an aha about three years ago, two and a half years ago, we were working on multiple projects for different companies. One of them was a top 20 bank globally. We’re under I can’t share their name, but one of the largest banks in the world. They had some specific challenges they wanted. They had tasked us with trying to solve. And in parallel to that, we were continuing to develop our fraud prevention technology. And we ran into exactly what you mentioned, Kevin, which is if we’re going to move the money faster, we have to know up front that there’s no fraud. And so it kind of married the two together, the two projects. And when that all came together, within a few months, we kind of the light bulb went off that this as a total package, can fundamentally change how consers transact with merchants and give merchants better outcomes all the way across the board. So I’d say it’s really nine years in the making and about three years that we kind of had all the pieces under development together. Yeah, we spent millions of dollars and have many, many talented people building this over the last three years, really focused on this effort.

Kevin Rosenquist: You said the merchants, now more than ever, need to be part of the advancements in settlement technology in the midst of inflation. Why is that so important? Right now.

Marshall Greenwald: Actually, 71% of SMEs are reporting cash shortfalls right now. And they don’t have the advocates. I mean, they have groups that go advocate for specific things, but they don’t have anyone in the payment ecosystem that’s really solving their problems. One of the largest contributing factors to their cash shortfall shortfall is the delay in getting paid. Now that could be a combination of things, but every time that they take a card payment, let’s just imagine that bar that’s decided to take cash only. If they say, hey, we’re going to take cards and they decide to start taking cards on Friday, right? The the conser’s intuition would be, I get my beer and he gets his money. But in reality, what’s happening is you get your beer and they get a promise to get your money right. And that promise to get money is contingent on it not being a fraudulent use, contingent on you not disputing the charge as your as the actual card holder. And it takes about 2 to 3 business days to get to you. So they are not going to have that money until Tuesday or Wednesday, depending on how they’re configured and when they batch and things like that. But that doesn’t sound like a huge problem. But if payroll was having to get funded on Monday and the most of you know, vole that they’re going to do is Friday, Saturday, Sunday. They’re going to continually have some sort of, you know, cash flow bridge they’ve got to think about. And maybe they’re fortunate enough to to have the cash to cover it. And sometimes they’re not. And so as we think about the timing of payments in combination with the cost of payments and in combination with the cost of fraud, you know, merchants have not only inflation stacked against them, but they have the actual systems that they rely on every day for electronic payments actually working against them in multiple ways.

Kevin Rosenquist: You said you’re doing, what, 10 million a month? I think you said with the with the system. Is that so? Is would someone like me would I see it? Would I would I feel it at all when I’m tapping my card? Like, would I notice it as a business? Would I notice it.

Marshall Greenwald: As a business that’s receiving payment? Definitely. As a conser, you really wouldn’t know anything different. We’ve if you’ve ever made a payment through PayPal or through Shop Pay, you know you’re starting to see.

Marshall Greenwald: Where payment.

Marshall Greenwald: Companies are branding and experience with the conser. We have a little bit of that flavor, right? You’ll get just like a square merchant. You’ll get a receipt automatically. So you’ll get a receipt from our system. So you’ll see our name and be interacting with us in that way. But it’s really made to mimic the current checkout process that the merchant has. We’re really focused on e-commerce first because that’s where we have a lot of distribution partners. But you can think of it being like when you go to pay on a merchant site, you don’t really know who they’re taking payments through. As a conser. Obviously, they’ll know all the ins and outs of whether that’s great for them or terrible for them. But we’ve gotten really good feedback from the merchants on on being like a game changing solution for them, is it?

Kevin Rosenquist: So do you work directly with the merchants or do you work more with the banks?

Marshall Greenwald: Definitely with the merchants, though. We distribute our our platform much like the other platforms do through partnerships. So we don’t really go out and try to find merchants. We find partners who are in the payment space. Some of them are banks, some of them are what we call ISOs, and some of them are unrelated to the payment industry today. But they have access to merchants and relationships with merchants. So they kind of sell through sell our system through to the merchant.

Kevin Rosenquist: Okay. Gotcha. I told you before that I’m opening a bar. How can I get Ionia to to get me my payments quicker?

Marshall Greenwald: Definitely hit me up, man. We’re excited to move into retail here shortly. We’ve got a lot of household name restaurant chains that are wanting to use the platform today. So we’re working on some implementations with a couple of POS manufacturers. Uh.

Kevin Rosenquist: My next question, I would imagine you work with the you work within the POS system rather than you’re not a standalone, right?

Marshall Greenwald: Yeah, that’s really critical. We do have a standalone option that somebody can use, but I think nowadays integrated solutions are kind of critical for businesses. It streamlines their operations, cuts down on errors. It’s definitely really important to us. So we’ve got some partnerships that’ll be launching integrated solutions into their software or their hardware options. Those will really be critical, not just to be able to support you at your bar. If you said, hey, I want to use you. We can say you can use these systems, but also for distribution because they have a desire to help their merchants that they already provide these software to. So, you know, they can offer our solution through their existing integrated systems and get distribution to people who already use those.

Kevin Rosenquist: Okay. Makes sense. Got it. Well that’s exciting. Marshall. Thanks so much for being here. The company is Ionia and you guys are doing some amazing stuff. I’m excited to see where it goes.

Marshall Greenwald: Thank you for having me.