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Managing Card Spend with David Blaha of Extend

The use of virtual cards is on the rise, but large issuers and legacy systems can often leave midmarket and smaller businesses behind. In this episode, we sat down with David Blaha, Chief Revenue Officer at Extend to discuss innovation around the use of corporate cards and spend management.

Payments & Fintech Insights In This Episode

  • The value of functioning like a large organization culturally while building products at the pace of a start-up.
  • Why virtual cards are the most secure way to make a purchase.
  • The power of diversifying card information through a series of virtual cards to reduce risk.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to “PayPod.” I’m your Host, Heather Bodi. And today, we’re gonna be talking about redefining the way credit cards are issued. Joining me is David Blaha, Chief Revenue Officer at Extend, an innovative digital credit card distribution platform for banks, fintechs, businesses, and their customers. David, welcome to the show.

David: Hey, thank you so much, Heather. Great to be here. Excited.

Heather: We’re excited to have you. I love to start off every episode getting to know our guests just a little bit, so give us a little background. What are you all about? What led you to your role at Extend?

David: Well, I am a 30-plus-year veteran of the payments space, about 25-plus years with American Express, so most of my time with American Express, but I have worked across the consumer businesses, corporate businesses, roles in marketing, sales, account, and customer support, all types of things over those years at Amex. About four years ago, I made the decision to leave the company and really wanted to work with early-stage fintech startups, sort of felt called to that.

I’d worked in a large corporation my whole career and was ready to make a difference in a smaller organization. So I started working with a couple of different incubators, one here in Atlanta called ATDC, and mentoring some different CEOs, and getting closer and closer to the space, and really helping these younger organizations in the areas of their go-to-market strategy, and how to build relationships, how to price their business, how to think about what growth would look like, and even became connected with a few different VCs along the way.

But what led me to Extend was that one of the founders, in fact, two of the founders I knew from my time in American Express, but one of them Andrew Jameson, our CEO, had a pretty prominent role at American Express. He ran products and B2B payments, and I was a pretty big customer of his because I ran a big piece of our large market business and our global accounts business. So often, Andrew and I would spend a lot of time working on big deals, big opportunities with large customers around capabilities.

So Andrew had left Amex a couple years before I did, and we maintained contact. And I saw what they were doing at Extend, and really excited about what they were doing. So, you know, about 16 months ago, he asked me if I would like to join him in some capacity, and started out in an advisory role. So for about 12 months, I worked behind the scenes hiring people, building out a rep strategy, all the things that we had to do to sort of grow new partners and build a business.

After doing that on the sidelines for, you know, however many months, he was like, “Okay, I think I need to jump in.” So we started talking about the chief revenue officer role, which they had not hired for yet, and it was just a perfect logical fit. So I started 4 months and 10 days ago. I officially joined the organization, and here I am today.

Heather: Incredible. What a gift to have a new creative project to be sinking your teeth into during a global health crisis. When so many people were trying to figure out what’s next or what they were doing at all, it sounds like you already had the wheels in motion to guide you to the point that you’re at right now.

David: Yeah, absolutely. I think, Heather, the thing that hit me was I was doing advisory work for a number of different companies, including Extend, and I was doing some other work around diversity, equity, inclusion. I was doing a whole bunch of things around leadership because I’ve got a passion for leadership, and written a few things on it, and I thought that might be my path. But what I really missed was actually leading a team, leading a business, having accountability for something.

And it’s one thing to be a consultant or an advisor on the outside, it’s another thing to actually be part of. And I guess the closer I got to Extend, the more excited I became about the business model and what Andrew, and Guillaume, and Danny were building and the partners that they were forming. So it just became a no-brainer for me.

Heather: I absolutely love it. I’m curious before we go into more details about Extend and all the great work that you’re doing, when you decided to move from this sort of larger company to saying that you were looking to make that impact in a smaller organization, what’s been your biggest surprise in that transition?

David: There’s a whole bunch of surprises. Now, the good thing for me is I got a trial period with Extend, and they got a trial period with me. So that was pretty cool. We got to, you know, see how one another worked, and if it was a good fit culturally, and there was a few things. The first is, in a start-up, early-stage company, venture-funded company, things move really fast. You make decisions fast, you better be nimble. So, I knew that going in.

I knew the pace would be fast. I’ve been on the job for four and a half months, and there’s two weeks that I haven’t been on the road, been in front of a bank, or process, or a network. It’s fire hose drinking all the way, and I expected that. So, I think that was the expected. The unexpected was, I didn’t realize just how good of a leadership team Guillaume, Andrew, and Danny were, and then other members of our team, like our Head of Product, Orna, and our Head of Human Resources, Savan.

We just have this great team…and Mike in finance. We just have this great group of folks that we are moving fast like a fintech. But culturally, we are respectful of holidays, and vacations, and we’re culturally diverse. And all these things that you do in a large organization that you sort of take for granted, some of those things we do here in a small organization, which is incredibly impressive to me while at the same time moving really fast, building products, deploying things to our partners.

Yeah, that was a surprise. And maybe it’s because the founders, myself, some others have been around a little while, and we came out of large businesses. But we’ve got this team of young excited folks building product and technology, front-end, back-end, all the web design, you know, so it’s a cool space that blends a lot of different types of folks. So yeah, those are the surprises.

Heather: I love to hear it. So let’s talk about Extend. You’ve been there just over, well, a year and a half, even though your formal role, you said, has been just over four months now or so. Tell me about the company. How does it work? What makes it so special?

David: Well, we’re a fintech, but we are not a fintech that is built to compete against banks and processors’ networks. We are a fintech that is built to support this ecosystem that is supporting the 31 million small businesses in the United States. Most of them are banking with larger banks, or regional banks, or credit unions. They’re with traditional banks.

And while there are a ton of fintechs out there that grab the highlights or the information because of their valuations, or because of the news, or because of the money they raised, the truth of the matter is most small businesses, midsize businesses are with traditional banks. But those traditional banks are challenged in developing tech. So for the past few years, and the pandemic, I think, really brought it to light because now you had people that could not go into their offices to pay bills, to do invoices, to reconcile statements, and everyone was working from home or…

Heather: Right.

David: So everything changed, and the explosion of fintechs became even that much more prevalent. All of a sudden, contactless activities and payments were all the rage because they needed to be. So, the pandemic fast-forwarded innovation at an incredible pace. But a lot of the larger banks or a lot of the banks themselves didn’t have certain capabilities that they needed. So, again, Brexes, and Ramps, and DiDis, and others out there that compete against these larger banks, I’ll call them neobanks, became pretty prevalent and somewhat successful in a short period of time.

But at Extend, we saw the need and we saw the opportunity that maybe we just don’t have to, I think Andrew use this quote, “burn down Rome and then build a new Rome.” Maybe we can work with the Amex, and Visas, and Mastercards, and the TSYSs, and we can work with these larger banks and then, ultimately, regional and smaller banks to create technology that could sit as middleware and provide amazing services and support around expense management, and payments, and virtual cards, and tokenization to these mid-market smaller customers that were with these banks.

Because I spent a lot of time with a large issuer, and we were phenomenal, like all big banks or large issuers, phenomenal, with our enterprise customers. And consumers had great products, but sometimes that midmarket customer is the one that gets a little bit left behind, or that smaller customer gets left behind. They’re not consumers, but they’re not enterprise companies that need giant platforms, but they need to be able to issue a virtual card. They need tokenization. They need services that just weren’t being offered.

So a lot of them had moved to these neobanks, while at the same time, the larger banks still hold so many relationships and offer so many services that I think the neobanks always struggle to. So yeah, that’s Extend. We’re five years old. We’re near 80 people. We’re on the backside of a series B. We’ve raised, I think, $55 million to date. You know, we’ve got thousands of customers, and we’ve got great partnerships with some of the names I threw out just a few moments ago.

Heather: So walk me through your suite of products, and then we can kind of pick away at that and hone in on one at a time.

David: I think a core product today that we offer, you know, revolves around virtual cards. And so what we have created is the opportunity or the ability for you, if you carry a card with one of our bank partners, you’re an existing cardholder, you can literally register that card with Extend and issue virtual cards within minutes. And I’m talking about all different kinds of virtual cards, you know, recurring limits, all types of budgetary things that you can build an organization within an organization, so all these web capabilities, as well as mobile capabilities where on your phone right now, Heather, I could send you a card right after this call…

Heather: I can’t wait. Send me a card.

David: I can send you a card, you can load it, and you could take it on that vacation you’re about to go on and actually load it to a digital wallet, and there you go. Apple Pay, Google, whatever, you are ready to go. So that’s the core product that we launched with. And from that come a whole other host of expense management capabilities, receipt uploads. And then, ultimately, product roadmap leads us down this path of a really full card management integration, taking the plastic card and payment capabilities that you already have integrating with the virtual.

Where we then sit on top as middleware for the banks is really a full suite of solutions to offer to their small midmarket customers. But what we’re also seeing is some of their larger customers really like it, too, because it’s wildly flexible, and I think the word we use, it just has very little friction. You don’t have to apply for a new credit limit, you don’t have to get a new card. It’s not central build, it’s off of the product that you’ve already got in your pocket. That plastic card in your pocket, we just extended its ability to do so, so, so much more. So, you know, that’s the core of the product, and it really takes you, I think, a little bit towards the roadmap, as well.

Heather: Is anyone else doing this? I mean, it sounds like you’re disrupting a space that’s been functioning in a very stagnant way for a long time.

David: There are definitely fintechs out there that offer accounts-payable solutions, AP automation, invoice. You know, there’s a lot of those. Some offer solutions to banks. I think the card-in-pocket capability that we have is unique. I think some of the provisioning, the digital wallet that we have and the way we do it on virtual cards is unique.

And I think the capabilities that we’re building down our roadmap around full card management and what that looks like ultimately becomes quite unique, as well. I would also say our partner approach that, again, MasterCard, American Express, Visa, across multiple banks, multiple processors, we wanna provide great technology to the ecosystem. We don’t wanna compete against it, we wanna deliver great solutions for it.

Heather: Have you come up against any roadblocks when it comes to consumer protections and regulations?

David: That’s a great question. Today, the solutions we provide in the market are geared to business. So they are on business platforms. They’re small business, medium business, and I said some large business, too. But the sweet spot’s definitely small midmarket companies. Consumer is wildly attractive. And we look at that as an area that, at some point, that likely will become part of the roadmap. But when you enter into consumer, obviously, there are very different set of consumer protection things that you have to be prepared for. But I absolutely love the idea of giving you an Extend card off of one of the pieces of plastic I have in my wallet to one…

Heather: I mean, you already promised you’d send me one, so…

David: Well, I mean, if you want because this is a podcast-business relationship. But to your point, though, to be able to issue a virtual card to someone that is doing work for me personally or for one of my kids, you could just imagine the possibilities and all the different ways that you could leverage that. So yeah, I think that happens at some point, but again, there’s 31 million small businesses.

We believe virtual cards are gonna grow from about 1.9 trillion, I think Juniper says 1.9 trillion to over 6 trillion in the next five years in spend. So there’s so much to do here. You know, at some point, we’ll go there, I would assume, I believe, but we got a whole lot of work we can do right now and a whole lot of things to get after that are pretty exciting.

Heather: Let’s pivot to security and privacy. I noticed your website touts that virtual cards are the most secure way to make a purchase. Can you talk a little bit about that? I mean, it’s not necessarily that I personally don’t understand, but I do imagine there’s this social barrier to overcome. Because if we don’t have it tangibly in our possession, it feels as though it’s at risk.

David: Yeah. So let me give you a few different, maybe perhaps bring it to life, a few different use cases because not all virtual cards are actually going to a person. I could issue myself a dozen virtual cards today off of my account and use those virtual cards to pay recurring bills. So if every month I get a Verizon or an AT&T bill for $100, I could issue a virtual card tied to that that auto refills for $100 that pays that bill. And, all of a sudden, all these recurring bills that I have as a small business, I don’t have to have my one card everywhere. So if a card’s ever compromised, it’s…

Heather: Oh, brilliant.

David: …simply a virtual card. So, there’s a large percentage of our cards that are issued to or for the purposes of tailspin vendors’ recurring payments. We also have a lot of eCommerce, you know, small businesses that are using virtual cards to cover shipping costs. So, you come on my website, you buy a product and pay with your card, I now have to pay the shipping because perhaps I’m a reseller, I’m buying that product from someone to have it shipped to you.

So I’m using a virtual card, perhaps, to buy it and using another virtual card for shipping costs to ultimately get that product to you. So, again, there’s not necessarily a person or social barrier involved. Now, when Andrew and I were working together and I was advising, I wasn’t yet an employee, I traveled regularly to New York to do work for him, and virtual cards were the way that I went. He issued virtual cards for a certain amount, I inputted that information into my Expedia app.

That’s how I got my travel, that’s how I got my hotel, into my Uber app, that’s how I got around, uploaded into my digital wallet to pay for things along the way. So, in some cases, they are issued to people and contractors. But in many, many cases, there’s not an actual person that it’s being issued to.

One other thing we do, though, is we do sanction-screening for our bank partners that want that because some banks want to actually know, even though it’s David Blaha who is issuing cards and everything ties back to me and my limit off of my account, some banks look at that as the need to know, “Okay, well, where are you sending virtual cards? Who are they going to?”

So we actually have a process where we sanction-screen. So when the person registers that card, we run against the database to make sure that this is a person that should be receiving a card, so all the protection that, you know, our government expects of us in those kinds of situations.

Heather: Talk to me a little bit about integration. I know that change management, both emotionally, but also sometimes from a technical standpoint can be really complicated. And I know another tenet of Extend is to streamline that process.

David: Yeah.

Heather: So, I guess what’s happening in my head is I’m seeing this potential situation where I’m running a small to medium-sized business. And in an effort to remain secure and to properly utilize this concept, I’m issuing cards for everything. I’m issuing cards for individual consultants. I’m issuing cards for my employees. I’m issuing cards for particular projects. What does that customer journey look like? Does it really complicate the sort of accounting, and bookkeeping, and tracking?

David: Well, think about a law firm that has 50 different cases happening at one time, and each one of those cases has court cost, or court fees, or maybe paralegal charges, things that you have to pay for. And today, that law firm, that attorney, or attorneys may have a couple of cards that they’re paying everything for. And here comes the bill at the end of the month, and it’s just ginormous and it’s got all these charges. What if I can issue virtual cards, you know, through Extend, and those cards actually have the name on them of the case or the reference number of the case?

And so now I’ve got 50 virtual cards that I’ve issued against my 50 cases. And then we provide data, you know, in a file to that entity or to that law firm where they can see, okay, what those charges were, which cases they were tied to. And that can actually be integrated into QuickBooks, and we continue to build out more integrations. There are just so many players to integrate with on the accounting side.

So, we continue to build out those integrations to make that process of reconciliation much, much easier. But, again, I’ve just taken something of a massive bill, like, “Well, who are all these charges? Where did they go?” And now I’ve given you really clear information on what they tie to, reference numbers, and through actual names that you could assign the accounts, and you can stop and shut ’em down however in a matter of minutes via desktop or phone. But one other thing that we do that I think is probably even much, much better are more sophisticated larger clients.

And what [inaudible 00:19:15] larger. There might still be smaller clients, but with someone who has some technical ability to program, or maybe a midmarket client, we’ve got really simple APIs. And, we hear it all the time from our end customers. So, they’ll take our APIs, and they will literally build our product, or the ability to request and move virtual cards, raise limits, change limits, whatever, into their own system. They’ll bring that instance into Salesforce. They’ll bring it into whatever their ERP is.

So, we’ve got a company that works for insurance companies, and they place families in houses, you know, after a disaster. Their house is burned down, there’s been a flood. They need to put ’em in an Airbnb, a VRBO, maybe they need to put ’em in a hotel. And they do all that to virtual cards, but they bring our APIs into their system. So as they have cases in Salesforce for all these folks, they can literally key that information without having to go on our site at all. So we’re built-in. So, again, really making things simple for the end customer to bring into their workflow, into their process.

Heather: You absolutely read my mind. That was gonna be my very next question, was a use case for that API. And so I’m really grateful you went there. What is on the horizon for Extend? Is there anything coming up or anything you’re particularly excited about that you can let us in on?

David: We’ve got a number of banks today that we have implemented through the balance of this year. There’s a few more that we are in process of implementing. Next year looks even more exciting given the conversations that we’re involved in, and I think some of our relationships that we have in the marketplace. A couple of weeks ago, an announcement was made with TSYS. And so TSYS is now utilizing Extend as a development partner.

So TSYS, who represents 20 of the maybe top 25 banks for processing, great relationships in the marketplace and capabilities. But, like many, they’re looking for some new capabilities, some things that the end customer, particularly their small, midsize customers would really enjoy using. So, we will be developing product and things with TSYS. So it’s another one of these big partnerships that we’re swimming with giant fish, but it’s cool to see how quickly we can move and what we can develop as far as what the marketplace is looking for.

So yeah, that’s a new relationship that was announced that we’re excited about. And probably before the end of the year, there’ll be another one I can’t say but will be integrated into one of the largest software companies in the world, will be integrated into their payment flow and invoicing tool. And that’s just another thing that is [inaudible 00:21:51]

Heather: Let the secret slip here, David.

David: I don’t think [inaudible 00:21:57]. But again, there’s a lot to do. It sounds fun, you know, but it’s really hard work. I think we got a super dedicated team. It’s not all perfect. I think the challenge we face is…

Heather: It never is, though.

David: No. The challenge we face is we’re working with giant companies that have, you know, really, really complex processes that you have to go through, and vetting that you have to go through, and compliance, and all that. So, sometimes we’re super excited about what we can do, but then we’ve got to wait six months to go through some form of a vetting process. And that’s just part of it, but that’s the exciting part because we can see all those things that are ahead of us, now we just got to deliver on ’em.

Heather: I imagine, and please correct me if this doesn’t align with your experience, I imagine that having come from a place where you were in a company that was the big fish, you know, you said swimming with the big fish, I bet it shifts a little bit the intimidation factor and almost reduces it. It’s so exciting to be swimming with the big fish now, but you’ve been there before. You know that idea of when you get to the endzone, like you’ve been there before and you intend to return. I imagine Extend has a leg up with folks on their executive team having been part of that big fish in the past.

David: I would say, you know, our attorney, June, and other members of our team, you know, Guillaume, and Andrew, and Danny, like I said, by having been there…[inaudible [00:23:20] runs our bank relationships [inaudible 00:23:23], you know. By having been there, we do understand what it takes. So if we respond to an RFP and an opportunity, we’ve all responded to really big opportunities throughout our career so we know what that needs to look like.

We know what the language needs to look like. We know how crisp it needs to be. Now, sometimes that might mean we put a little extra work in, or maybe too much work. I don’t know. But we know if you’re talking to the players that we’re talking to, that’s their expectation. So, I think it definitely helps us. And there is not the intimidation of being in that room, of being in that building in a boardroom.

Now, the challenging part is when David Blaha calls from Extend, you may never have heard of me, and so you may not take my call. When David Blaha from Extend calls, I’m calling with TSYS, or with MasterCard, or with American Express, or together we’re having a conversation, you know, then it gets really exciting because now they take the call, and now we’re at the table, and we actually have a role to play. So, that part of it is really fascinating.

Heather: As an individual who has had a lot of consulting, and you mentioned at the beginning of our conversation your passion for leadership, I’ve done a lot of work with leaders as well and do some public speaking, and I found that I’m that person at the party with an anecdote. I’m that person at the party with that nugget of advice. I like to close out our show asking people, and so I’m particularly excited to ask you this. What’s the best business advice you’ve ever received, and from whom?

David: There’s a book that is in the back of my brain that is 30 years, 30 great leaders and just… You know, because you go through periods of time where you interact with so many. And I have a hard time picking one just because there’s so many people that just poured into me along the way. And each leader poured in differently, and I learned something completely different from them along the way. You know, Andre Williams, who is pretty senior at American Express was my leader for a couple years.

He just poured in focus, and detail, and all those things. Then I’ve had other leaders, you know, that just poured in just humility, and love, and kindness, like Kelly Collamore [SP], and Susan Chatenheus, and just great leaders that I just treasure my experiences with. I think the best advice I’ve gotten and I’ve paid attention to it is my role as a leader is nothing more than to enable the people that are on my team. And the more I realize that and take the back seat to them, try to make them successful, be super candid, candid conversations… I’m a huge… You know, I mean, that radical candor matters.

And so I just believe that I have to tell you exactly where you stand and why you stand, but do it through relationship and love and care. And when people see that and they know it’s authentic, man, you can do amazing things. But it has to be real, and you only get there through a lot of candor through relationships. So, I don’t know. That’s what jumps to me, Heather,

Heather: You got me good with that one. Folks listening can’t see us, but you got me all choked up.

David: [inaudible 00:26:18]. Thanks.

Heather: It’s incredibly important. David, thank you so much for joining us today. If folks wanna get in touch, they wanna learn more about Extend, or if they wanna get in touch with you personally, where should they go?

David: Well, paywithextend.com, that’s our website. So just simple, paywithextend. You can find me on LinkedIn. There’s not a lot of David Blahas, but David Blaha, Pay with Extend. Or you can always drop me an email, and it’s just David, I’m the first David, so I get david@paywithextend.

Heather: Is that your first professional email where you got just David?

David: Yeah. Because usually, you got like dot, or maybe your middle initial. You’re an organization with 50,000 or 60,000 people, you know, you get a whole lot. Here, I’m just David.

Heather: I love it.

David: But yeah, hit us up on the website, reach out to me personally. Like I said, I do a lot and try to talk a lot about leadership that matters to me. I think any of us that have a role where we get to influence and play a part in people’s lives, it’s a blessing, and it’s one of most important things, and we need to take it seriously, and I’m grateful for it every day. So, no. You know, reach out to me for anything. I love to meet new people.

Heather: Great, David. Thanks for joining us.

David: All right. Get ready for that virtual card. It’s coming your way, Heather.

Heather: I can’t wait.

David: All right.

Heather: If you enjoyed this episode and wanna 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

Extend

Extend is an innovative digital credit card distribution platform for banks, fintechs, businesses, and their customers, that redefines how credit cards are issued. A certified Visa and MasterCard partner, Extend seamlessly integrates with legacy bank issuing systems to enable modern virtual credit card features and distribution capabilities. Extend offers both a virtual credit card distribution app (paywithextend.com) for business customers that want to instantly equip anyone with a secure mean of payments, and a suite of APIs for fintechs to leverage virtual credit cards to enhance their products, enable commerce at POS, and streamline payment operations.