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Navigating Payouts Verification with Ben Turner of Verituity

In this episode we explore the transformation of payouts. Founder and CEO of Verituity, Ben Turner, joins us to take a look into their unique approach to wholistic verification easing the complexity of the payouts process, reducing risk and cost.

Payments & Fintech Insights In This Episode

  • How reducing payout complexity for both businesses and consumers is essential.
  • Why the cumbersome nature of legacy systems can increase risk and cost.
  • The role of both integration and transformation in platform adoption.
  • A look into the “zero trust” approach to data privacy and security.
  • The importance of really knowing your customer.
  • The art of possibility and disruption as a technologist.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to another episode of PayPod. I’m your host Heather Bodie, and today we’re going to be talking about easing the complexity of verified payments. Joining me today is Ben Turner, CEO of Verituity, a verified payouts platform strengthening payout speed, accuracy, and visibility, all while reducing the complexity, risks, and costs. Ben, welcome to the show.

Ben: Thanks for having us.

Heather: Absolutely. So before we turn our attention to Verituity, let’s take a minute. I want to learn a little bit more about you. Tell us about yourself and what led you into a career in fintech.

Ben: Sure. So, the way I got into fintech actually goes back to the early days of the internet. I was part of a…started a company called Network Solutions where we were one of the early e-commerce players. In fact, so early, that there was no fraud detection. Payment gateways were in their very early stages, there was no Shopify. You had to build everything yourself. And what I learned through that process is that as technologists, our job is to take the complexity away so that your customer, or the consumer, or business can quickly get what they want, which could be purchasing a product, could be receiving a claim. And as I looked at the market over the last five years, I saw the same hole existing in the world of payouts or disbursements. So I decided to start Verituity at the beginning of the pandemic.

Heather: Wow. So it’s new?

Ben: It is new. We’re a little over 2 years old.

Heather: Congratulations. So, let’s talk about Verituity. Let’s get into a little bit of detail. You just mentioned sort of the need you saw, but what was that aha moment? What was that moment that led you to say, “There has to be a better way. We’re gonna tackle it right now?”

Ben: When I started looking around at what the challenges were in the world of B2B and B2C payouts or payments, one of the biggest blockers I saw is the lack of end-to-end, what we call verification or holistic verification. And what I mean by that in the world of payouts, failures happen because of fraud, they happen because of data gaps, they happen because of just errors. And so the complexity of dealing with people is hard. So, when we saw that gap in the market and we realized we had some technology that we could assemble to address that and automate that process, add intelligence so that the business or the consumer doesn’t have to worry about the complexity. It can just happen.

Heather: And how does that work when you’re talking about the importance of verifying these payments? I guess the heart of Verituity’s value statement lies in verification. So what kind of impact does that lack of end products that aren’t yours, in the processes that existed and were functioning before Verituity existed? What was the impact of that lack of verification having on various industries? You know, like the ones that are operating in sort of cumbersome legacy systems, right? Like large banks, for example.

Ben: Yep. Well, it’s not just large banks, it’s large payers, insurance companies, auto finance companies, gaming companies. They all have challenges that come down to how do you remove complexity and in the end result you’re removing risk and cost. So we were very purposeful in the way we thought out about how to solve that problem. We talked about first-time and on-time verified payouts and pay-by-anything experiences. We’re very deliberate in those words because in the world of payouts you want that claim payment, you want that escrow payment, you want that account closure to happen on the first time because if it doesn’t, there’s a cost to the payer or the business both in terms of economics and customer satisfaction.

And we were very deliberate about choosing the word on time. Because in the world of payouts, on-time is the term that the payers or the business and the person they’re paying, the payee or the business they’re paying, agree to. So, on-time could be right now. So real-time payments or ACH, it could be in 3 days, it could be in 20 days, it could be in 90 days. And then the verified is really important because the cost of a misdirected payment is high. You have to deal with resolving it for the person or the business that was supposed to receive it. You may lose the amount you sent. So, we focus on verifying “Are you paying the right payee? Are you paying the right account? And did that payment settle when you expected it to?”

And then we were deliberate about choosing pay-by-anything. We believe fundamentally that in the world of payouts and payments, businesses and consumers shouldn’t have to think about payment rails. That they should just be able to say, “This is how much I want to pay to whom and when it needs to be paid,” and the intelligence of the network handles the rest. And that’s pay-by-anything.

Heather: Let’s talk about that user experience. I started my career in financial services, specifically in insurance. You mentioned insurance in that last answer. And I have a distinct memory of craving more seamless technology just across the board, but specifically, in those transactional moments I had with my clients. What does the customer journey look like for the companies who adopt Verituity as their payout platform?

Ben: Yeah. So, companies that adopt us, we call them payers, we literally say, “Just send us your check file.” And what we mean by that is, however you’re doing business today, we’ll connect to you, we’ll ingest your data, and we’ll transform it into a modern payment file or payment instruction. Early in my career, I had a CEO who taught me a big lesson, which is, as technologists, we shouldn’t expect our customers to figure out technology. So, we focused on that, on how we make it easy for payers or the businesses that are our customers or the banks that are our customers, to rapidly modernize their payouts by saying, “Connect to us with anything, send us anything, and we’ll take it from there.”

So our customer experience breaks into really three areas. There’s the payer experience, which is sending us the instruction to pay someone, but then we have to give back to them the information they need to reconcile that that payment happened. We have a payee experience, which is really streamlined. Payee comes in, they tell us who they are. That’s part of the verification process. They get to pick how they want to receive that payment, whether it’s RTP, PayPal, Zelle, even check, and then they accept the amount and the payment happens. And then our third customer experience is the banks. So, our primary customers are banks and large payers, direct customers. And the bank experience is we’ll connect to their payment rails, we’ll connect to their treasury platform, we’ll connect to their commercial clients, the payers, and handle that complexity so they don’t have to, and they can quickly deliver value to their commercial clients.

Heather: This sounds like the name of your game is integration every day, all the time. Navigating an industry that’s operating with so many various legacy technologies, what is Verituity’s approach to integration?

Ben: Yeah, so it’s integration and transformation. We talk about it as ELT or ETL, you know, depending on how you like to view the world. But our approach is we’ll connect to you. So, whether you can only send batch files. We have one customer who’s on an old mainframe system that can only send space to limited files.

Heather: Wow.

Ben: Right? But that’s not unusual. So you have to be able not to ask your customers to change the way they do business today. It costs them money. They probably don’t have the resources available, and it slows down their modernization. And at the end of the day, making that integration, that transformation of data easy, really accelerates the time to value for our customers. And so, we’ll give you the ability to send us a file, connect to us via an API, we’ll build a connector to you. You can send them 1 at a time, 100 at a time. You can send them in a streaming manner. We don’t really care. And then we’ll transform them into what needs to be a modern payment file and contact your payee to find out how they want to get paid so we can complete that. So payers, businesses, don’t have your checking account information more than likely, if they’re sending you checks. They certainly don’t have your PayPal or Zelle information. So, we’ll collect and verify that, add that to the payment instruction, and complete the payout.

Heather: So that shifts my brain toward security and privacy. Our industry fintech in general, very much plays a key role in protecting both consumers and business data, especially when it comes to payments. So, what is Verituity’s philosophy when it comes to data security?

Ben: My background, our CTO’s background, our head of platform operations background is in the world of finance and identity, where security is paramount. So, our approach is zero trust. We don’t trust anybody or anything or any transaction. We verify everything. We have multiple layers of authentication, but more importantly, we handle that data protection for our payers, our businesses. We’ll make sure their PII, their customers’ PCI is protected and managed correctly. We also fundamentally believe that the payees, the people receiving the payout, own their data, whether it’s the information about their company or if it’s an individual, their personal information, their payment account information. So, they can come in at any time and remove themselves.

Heather: Oh, interesting.

Ben: I think that’s where we diverge a little bit from some of the earlier fintechs, which is we’re not about aggregating a bunch of payees and payers, and collecting their information and doing something else with it. We’re about using the information we get from our three customers, banks, payers, and payees, to enable the data to flow safely and accurately that enables the money to flow. We put a lot of emphasis on that and have the appropriate security to make sure that that is a completely safe and trusted process.

Heather: So would you say that is the statement that makes Verituity unique? I guess my question is, what is the way it’s been done up until now? And, you know, when we’re talking about disruption in general or new approaches to old tricks, what mountains did you have to climb to sort of connect the dots in a new way?

Ben: What I believe from when you look to develop a new product is you have to do three things. One, you have to get out and talk to who you think your potential customers are and make sure you really understand the challenges they face. So we went out, talked to about a dozen banks, half a dozen payers before we even got started with the business. So that gave us an understanding. But then you have to look at what you can do with technology to address those problems. And I don’t mean what services can you put together. What I mean is, what’s the art of…the possibility, given where technology is today, right? So, simple example, our microservices. Microservices make this problem a lot easier because you can break it down into small, discrete components.

The third is don’t look at what everybody else is doing. Focus on solving the customer’s problems. And that’s what we did. That’s how we came up with an approach that’s unique in the market, where at the core of it is this holistic verification and adding intelligence to payment choice so that the payee is only given the payment choices that map how the payer is willing to pay, that map to what are called the thresholds. So for example, PayPal can only accept up to $50,000. So if the payout is $60,000, don’t offer PayPal. And then the risk of the transaction. So if the transaction is highly risky, only provide payment types that can be pulled back versus settle in real-time.

Heather: So talk to me about the future of verified payment technology. I mean, it sounds like what you’re doing is the direction that almost everything payment related is headed, right? Where some of us are going to want to permanently operate out of digital wallets. We’re going to eventually want to be using cryptocurrency in a variety of ways in how we manage our day-to-day lives as individual consumers. But I think businesses are also going to want to adopt that sort of payment type as well. So, what do you think the landscape is going to look like a little bit longer down the road, like, say, 10 years from now?

Ben: Sure. So to set the groundwork for that, in the U.S. today, if it’s in the B2C world of payouts, it’s about 30% check and B2B is about 40% check, which is hugely costly and no one’s really happy about that except the people that run the legacy systems that don’t have to figure out how to change them.

Heather: Exactly. That don’t have to do things a new way and can do it the same way they have for the last 35 years, right?

Ben: Exactly. So when I look out, I mean, let me ask you a question. Do you use Apple Pay?

Heather: Every day. Just used it this morning.

Ben: Why do you like it?

Heather: So many different reasons, but I think primarily because the less amount of physical things that I need to keep track of at any given moment is an ease on my mind and helps me transact throughout the day. And so knowing that everything can happen from my phone in my hand, and I’m not sort of digging around for…you know, I always have the wrong card on me, or I’ve left a card in a different pocket or a different wallet. So being able to design my life and function through my phone is really important to me.

Ben: Right. And I think that is a good indicator of where the world will be in 10 years. So going back to what we talked about earlier, what I think happens over the next 10 years, and one of the reasons Apple Pay is so popular is what you’re hitting, but also because it feels ubiquitous and it feels safe when you do the transaction. You can walk into anywhere and use it. You feel like you’re protected and you’re not having to make any decisions along the way other than, “Yeah, I’m willing to pay this amount.”

So, where I believe the world is going to head is the intelligence of the network will make all the right decisions around the payment rails, around how that payment settlement should be captured, around what kind of user experience fits the way you want to interact. So that’s a long way of saying, well, with the advances in machine learning, with the advances in some of the technology and the payment rails, and with the advancements that are happening around being able to do more dynamic experiences, in 10 years from now, I think you’ll be able to say “How much, when, and to whom.” And that’s it. That’s all you have to do.

Heather: I can’t wait. But what’s next for Verituity? Being two years in, you must just be drinking from a fire hose of learnings all the time. But is there anything on the docket that’s coming up next that you’re particularly excited about, or partnerships or new capabilities within the technology? Anything you can give us the inside scoop on?

Ben: Yeah, I mean, I’ll mention a couple of things. Later this summer we’ll roll out what we call pay by crypto. And the reason I’m excited about that is it gets to what we just talked about. The way we’re going to do it or the way we do it is the payee can say, “You know what, I want to receive my payout in crypto.” The payer pays in their fiat currency. We handle the conversion, we handle the verification of the pay in their wallet so that the risk sits where it should, which is the payee made the decision to receive the payout that way.

The other thing that we’re excited about is KYC is great when you’re opening an account, but when you’re talking about payouts where there can be multiple transactions for an insurance plan, four or five payments to close out an insurance plan. Or in a buyer-supplier relationship there could be monthly or bimonthly or even weekly payments. It’s really about knowing the transaction and the risk of that transaction, and what you expect that transaction to look like. So we’re doing a lot of work and shifting from a know-your-customer like focus to know the transaction.

Heather: I hadn’t even thought of it that way. Incredibly interesting. I’m excited for you. All right, so the time has come. We wrap up every show with a segment where we do five questions. Rapid fire. Are you ready?

Ben: Let’s do it.

Heather: Okay. In the land of predicting the future, give me a prediction about a change we will see in the immediate future of payments. What do you expect to happen in the next 12 to 18 months?

Ben: I think the hype around real-time payments won’t materialize because no one understands the difference between that and other payments.

Heather: All right, what’s one cool piece of payment or finance-related technology that you’ve come across recently that impressed you?

Ben: Verituity. No, I’m just kidding.

Heather: Verituity number one. But what’s your number two?

Ben: Actually Apple Pay. I think Apple Pay has done a tremendous job in building safety into their wallet and pay, and they’ve done a great job of making it easy for merchants to adopt so that it can be used more ubiquitously.

Heather: Beautiful. That was my very next question. So you answered two in one. You’re really honoring this rapid-fire nature. The next question was, in the next five years, most people will make a purchase with either Bitcoin, Apple Pay, or something else? Which one and why? And you just answered it. So, we’re on to number four. What’s one piece of advice that you have for someone who’s considering payments in fintech as a career?

Ben: I’ll give you two for the price of one.

Heather: Great.

Ben: Go out and talk to users of whatever you want to do in fintech, whether you want to wallet play, whether you want to do payouts, whatever it might be so you understand the problems. And the second is, don’t look back. Look forward, because if you look back, you’re going to build something someone already has and not really solve the problems in the market today.

Heather: Oh, I love that. And now to just put a cherry on top of that sundae, what’s the best piece of business advice you’ve ever received and from whom?

Ben: Yeah. Business is all about execution. You can have the smartest strategy in the market, but if you don’t execute, you’re not going to win.

Heather: I like that. I haven’t heard it said exactly that way before. I appreciate that. Well, that does it. That does it, Ben. Thank you so much for talking to us today. If folks want to get in touch with you or learn more about Verituity, where can they find you?

Ben: Yeah, so we’re at verituity.com, and we’re a pretty open company, so I’ll even give you my email. It’s ben.turner@verituity.com.

Heather: Beautiful. Thank you so much for joining us today.

Ben: Thank you. Really appreciate it.

Female Speaker: If you enjoyed this episode and want to hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.

Industry Spotlight

Verituity

Verituity transforms payouts beyond transactions into new sources of value, by delivering faster, safer, verified payments and pay-by-anything experiences, all while reducing payout complexity, risks, and lowering costs.

Verituity’s verified payout platform connects Banks, Payers, and Payees through a digital, intelligent platform that places contextual verification and an adaptive policy engine at its core. We uniquely strengthen payout speed, accuracy, and visibility, and deliver pay-by-anything and anywhere payment choice, all while reducing complexity, risks, and costs.

The Verituity Team has decades of experience in the payouts, banking, tech, and security spaces, formerly holding executive positions at the world’s leading banks, financial institutions, and technology companies. Verituity is headquartered in McLean, Virginia, with an additional office in Atlanta, Georgia.