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Mobile Payment Technology with Osa Gaius of Parrot

Mobile payments have been gaining steam for years, but the pandemic created a boom in e-commerce and a necessity for contactless payment methods, almost overnight. In this episode we spent some time with Osa Gaius the Founder and CEO of Parrot – a mobile payments platform, to talk about the way our mobile devices are destined to become the dominant modality for our daily transactions.

Payments & Fintech Insights In This Episode

  • The reasons for delayed mobile payment adoption in the United States.
  • How the evolution of e-commerce from laptop to mobile is impacting payments.
  • The importance of quick and easy payments processing for consumers.
  • Privacy and security standards in mobile payments.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to “PayPod.” I’m your host, Heather Bodie. And today, we are going to be talking about one of our favorite topics, mobile payments. Joining me today is Osa Gaius, Founder and CEO of Parrot, a mobile payment platform bringing customers closer to the businesses that they love. Osa, welcome to the show.

Osayame: Thank you for having me, Heather. It’s great to be here.

Heather: Absolutely. So, I love to start by just getting to know our guests a little bit. Tell me about yourself, a little bit about your background. How did you get into FinTech?

Osayame: Yeah, my story starts quite early. I grew up in Nigeria. My dad was a banker. I came to America as a kid and I studied computer science. And I worked at various FinTech-related companies in Atlanta, and ultimately, found myself as an engineer working at Mailchimp [inaudible 00:01:07] payments, and realized that, although I wasn’t working at a FinTech company, I was working at a marketing company that had to figure out how payments intersected with marketing. So, again, I found myself kind of back at FinTech. I spent some time at BlackRock, as well, as a VP of engineering there. So, I spent a lot of my time, my career around payments or around banking.

Heather: So, talk to us about Parrot. As the founder, what was that moment? How did you transition from working for another company to saying, “No, I’m going out. I’m doing this on my own?”

Osayame: The aha moment for me came when I went back to Nigeria. I had not gone back there since I was 10 years old. And while there, I had an experience where I was trying to buy something 10, 20 miles away. My cousin says, “Don’t do that. Just pick up your phone.” And in Nigeria, there’s a system for instant payments where you can instantly send the merchant money over text from your phone to their phone, and it all kinda happens. And then, they can bring you whatever you need or you can go pick it up. And so I realized in that moment that the third world, in this case, Nigeria, where I had grown up, and, you know, when you zoom out looking at Asia, had figured out a way to do mobile payments radically differently, than how Americans were doing mobile payments. And so I was humbled, right? I had to come back to America and figured out why were we so behind in terms of payments in America, compared to how ahead Africa and Asia were. So that was the aha moment, realizing that mobile payments needed to look differently and it needed to be primarily focused on getting consumers and merchants to have a real relationship.

Heather: So, what makes Parrot different? How does Parrot do that? And what was stopping companies in the United States from adopting that technology sooner?

Osayame: The big issue we think about day to day at Parrot is, what’s really happening in e-commerce and what’s making merchants’ lives a little more difficult than it was 10 years ago. And the problem we zeroed in on was that, for a lot of merchants in America, they were used to dealing with consumers who were shopping from desktop computers, right? That just was, go back to Amazon, go back to even eBay. To a large extent, these were mostly desktop-focused experiences. And so for a lot of merchants in America, it wasn’t that difficult to get a merchant to create a solution for a consumer that was primarily oriented around desktop. But what’s happened in the last five years is that most consumers, especially young folk, millennials, Gen Z, have decided that the phone is the only way that they wanna shop on these eCommerce websites.

And so, for a lot of merchants, what they’re seeing in a real data-driven way is that the number of people coming to their site from mobile has gone from 30%, 40% to now 80%, 90% on average. And those people struggle to pay, right? The number we often reference is that only 15% of people who ever try to start paying on a mobile website for an eCommerce brand will ever get done because it’s just so hard. It’s broken, and it feels clunky on your phone. And so, for merchants, this is not just a problem the first time they need you to buy something. But it’s also a problem that the next time they want you to buy again, or the third time, or the fourth time because they have to account for the fact that their mobile experience is just way, way worse than Amazon, you know, have an app or it’s way worse than Nike’s app, and they have to contend with that every single time they want someone to buy from them.

And to answer your question, like, what’s Parrot’s solution, again, coming back from Nigeria, what I realized was that if a merchant could text you or at least reach out to you over the phone and say, “Hey, here’s something we think you should buy again,” or better yet, if you actually reach out to the merchant over the phone and say, “Hey, here’s something I want from your site,” if they can very quickly let you transact, ideally, with like a single response, a thumbs up and okay, but by saving your credit card information, then you as a consumer are gonna have a much better experience, especially if there are any issues that you need to ask questions about.

Heather: Absolutely. I feel like, for me, that’s the danger of the Amazon app on my mobile phone is that because everything is saved in there, that “Buy Now” button is fabulous, right? Being able to hit one button and having completed an entire transaction keeps me going back to that application versus maybe exploring other sites on my mobile phone because that payments process is so simplified. So, talk to me a little bit about the difference between sort of having payment information saved inside of the cookies on an app on your phone and this process of paying via SMS text.

Osayame: Yeah. I love your reference to Amazon, right, the “Buy Now” button. For a lot of merchants, what they’re trying to figure out when they come to Parrot or when we reach out to them is, well, how can we give people that same buy now experience where they can…? In the case of Amazon, they’re on your phone. They know who you are, they’ve got maps. It’s a little easier. Amazon knows who you are. In the case of a mobile website that isn’t Amazon, as you called out. the best way to kind of remember who that customer is when they come back is to save a cookie and reference that cookie the next time. The challenge with cookies, as we all know now, is, you know, a lot of consumers are saying no to cookies. They’re blocking them at the browser level. iOS is mandating that you don’t even store cookies anymore, to a large extent.

So, what we’re seeing is for merchants when someone comes back to your website, there’s kind of this big question. How do I remember who they are? And what we realized or what I realized in Nigeria, when I was there was, well, if the person’s on their phone, if they’re shopping on the phone and, you know, whether it’s an iPhone or Android, there’s a easy way to know who they are. It’s just to send them a text. Like, when they’re on your site, ask for their number real quick and be like, “Hey, we just sent you a six-digit code,” or, “We sent you a text that you can respond to the same way your bank or your credit card sends you a text. And if you respond, we’ll know it’s you, and we’ll automatically check you out.” And for most consumers, that’s two taps, but it’s the equivalent of a “Buy Now” button when you’re on your phone. And if you’re on a desktop, you know, it’s not so hard to do the same thing. But given that most folks are on their phone, what we realized is that, that buy now experience can be just as simple as sending that person a text when they’re on your site. And if they confirm it, then you can just instantly charge whatever payment method they’ve got stored with you.

Heather: So, as a business owner, is this another platform, another addition to my tech stack, or does it integrate right into my checkout page? Does this sort of add a choice for my consumers or does it become the choice for my consumers?

Osayame: It’s really up to you as a merchant. We have one merchant we work with who sells baseball equipment, and they, you know, sell a few million bucks of baseball equipment every year. And so when we start discussing with them how to integrate Parrot into their existing technology stack, they got really excited about actually making this the only way because they’d had a lot of problems around fraud that came down to, “We don’t know who the person is who was checking out,” or, “We’ve got an email address.” People would make a bunch of fake email addresses to get around our fraud detection. And so we said, “Well, every American has a phone number. And there’s some legal things that mean that you can’t really sign up for a phone number without going through some checks and balances. And so you can guarantee that when someone puts in their number and we can figure out if it’s a fake number, like a Google voice number. If someone puts in a number, we can guarantee this is a real person.” So, we found that for this merchant, they were excited about replacing all of their checkout with this phone number-based checkout. But for some merchants we see, to your point, they’ll say, “No, we actually only wanna use it in this situation, or “We wanna try it as a way to drive purchases in this kind of situations.” But, again, you can use it as your only checkout or you can use it kind of as a way to solve little problems you’ve got around conversions.

Heather: You mentioned in that client example that they were trying to reduce fraud. So, let’s talk a little bit about security and privacy. FinTech plays such a key role in protecting consumer and business data. What is Parrot’s philosophy or approach to data security?

Osayame: Yeah. Before starting Parrot, I was an engineer, right? I spent most of my career building tools for merchants or building tools for financial institutions like Bank of America, Citibank. And one thing I realized very early on was that merchants have a very, very important role to play when it comes to security and privacy because, ultimately, it’s the customer buying from a merchant, right? The customer doesn’t really know who Parrot is. They probably don’t even care who Parrot is. We’re just a financial technology company that makes payment software. So, for us, it’s not just important that we have a security story that we feel good about Parrot, but one that we can tell our merchants so that they feel good about it, and that they can also tell their customers, their end consumers, who actually buying physical products from them.

And so, our story is very simple. We treat the phone number as sacred, right? Because we believe that the phone number is not just sacred, from a privacy perspective, in the sense that you don’t want people on the internet having your number and being able to access it for any reason because it’s one number, right, and most people don’t change their number for years, sometimes decades. So, we treat the phone number as very secure. We encrypt it, both at rest and in transit. And the second thing that we take importantly, vis-a-vis the phone number, is if your phone number in the case of Parrot is the way you pay when you confirm payment, then it’s actually more secure than your email address, right? It’s more secure than anything else. And so when you think about the way your credit card company deals with your phone number today, they treat it essentially as a secure mode of payment because they’ll confirm stuff, they’ll confirm fraud. And so that’s how Parrot treats it.

So, I mean, when we talk to merchants what we tell them is, “We treat your phone number the same way Capital One treats your phone number, which is a very, very secure identification method,” but also a secure communication method that can be used to authorize really, really expensive things, right, that you wouldn’t want anyone to be able to like say SIM swap. And so, Parrot is intentionally built to prevent attacks from people who are trying to do SIM swaps. We spent 18 months really building a lot of infrastructure and making sure that not just if something happens, but when something happens, we’ve got your back in terms of security and privacy, and we can really find out what exactly happened all the way to AT&T’s level of detail.

Heather: So, let’s travel back in time to those early days when you first founded Parrot. What was that experience like? Had you been an entrepreneur before that, or can you just tell me about, I don’t know, all things of the founder experience in those early days?

Osayame: Yeah. Starting Parrot was interesting because I left my cushy job as a VP at the height of, you know, sort of COVID’s early rise. As of March 2020, we knew something was gonna happen. We weren’t sure how bad it was gonna be. And my initial thought was, “Well, I got, you know, sizable savings. I can bootstrap the company, and, definitely, why not, right?” So, I just kind of took the plunge. But given that COVID caused a lot of excitement around e-commerce and we all tried to figure out, right, how do we do commerce and payments in a world where people can’t physically pull their credit cards out and walk up to a store? Some people can’t even go to a store. And so I realized that we had to figure out mobile payments very, very quickly. And so it was a good moment for us to start Parrot. By that time, it was very scary because you can imagine quitting your job and then the economy and the world just shutting down for a year. I mean, some places in America, were not open for even in summer of 2021. So it was definitely difficult. But again, we fundraised through 2020. We got a lot done for 2020, and actually, really learned a lot about our customer base in that early period. So, it definitely was not easy. It was emotionally taxing, but I think entrepreneurship is always gonna be difficult. So, there probably wasn’t a great time to start, but this was as good as one could expect.

Heather: I spoke with someone recently who said that going into a tech startup is like volunteering to be hit in the face over and over again, and you just have to be unbelievably resilient. And that feels like a common thread with a lot of the founders that I speak to. It is tough, but worth it, is what I hear for the most part. How are you feeling today, looking back over this past two-and-a-half years?

Osayame: I’m feeling great. And I think a lot of that comes from being able to look back over two years and say, “Well, two years ago, we weren’t even sure what the path ahead was.” But I think a lot of entrepreneurship is, to your point, kinda just stepping into the ring, right, not really knowing where the punches are coming from or what the fight is gonna look like in two or three rounds, but just saying like, “Hey, we’re gonna get in the ring and it might be 20 rounds, it might be 25. But we’ll tough it out.” And on this other side of it watching merchants who use Parrot get excited about what we’re doing for them, and watching their customers who interact with Parrot as a checkout method and being able to see like real people use Parrot and get value out of it, see their lifetime value go up, like, that was the thesis early on. So, I think it’s good to see the thesis get validated and to have institutional investors back us. That’s always part of the journey that you hope for, but so now, it will be two years removed from the start and it’ll be like, “Oh yeah, those things happened and they continue to happen.” It definitely gives you joy, right? But to your point, that joy comes from just, like, resilience and getting punched in the face a lot.

Heather: Yeah. Have you had any moments where you were maybe out in public and I know the world is just slowly now opening back up, and out of the corner of your eye, have you ever witnessed somebody engaging with Parrot, like, a stranger out in the world?

Osayame: I haven’t in person yet. But I think what’s interesting to your point around, like, strangers is one thing we do daily is we have regular consumers, people who don’t know who we are, check out at one of the brands. We support a baseball equipment brand. And so what’s odd is we watch them. We just have logs and a bunch of nerdy stuff we used to track what’s happening. And we’ll see certain customers doing their own checkout, right, and we’ll kinda be watching them like, “Oh, you know.” And so what’s exciting for us is just to watch consumers solve problems and get stuff done without us being there and be like, “Oh, wow. Like, when we built this a year-and-a-half ago, we had a thesis this would operate like this where consumers would interact with our checkout this way and now they’re doing it.” So, I think that’s as nerdy, creepy as we get in terms of watching in the wild do stuff. It’s mostly on the internet and on Zoom, not in person yet.

Heather: It is funny. I feel like there’s a tension there that is hard to solve where, in general, people feel like, “Oh, I don’t want you watching over me. I don’t want you seeing my every move.” But, simultaneously, we want everything so simple, and we want to anticipate our moves in order to make that user experience as seamless as possible. So, those things, they’re oil and water because you have to watch in order to see those patterns of behavior and be able to ideate and improve upon them. So that’s fascinating. I like the creepy stuff. I want you to watch my actions. I wanna make it… I want easier and easier and easier. So, what’s next for Parrot? Any exciting updates or new projects on the horizon? Is there anything you can let us in on?

Osayame: The biggest update that’s coming in is, for a long time, we’ve been building Parrot itself. We’ve intentionally not spent a lot of attention, again, one, because we’re a payments company and we’ve seen a lot of challenges around payments companies being too vocal. That’s not really our style. We think it’s important to get payments right, and then localize when it’s ready. So, we’ve finally gotten to a point where we feel it’s ready to start talking to new potential merchants who we think could be next up to bring on board. And so, yeah, the public thing that’s gonna be announced pretty soon is that Parrot will be available for every merchant who uses big commerce. And you can install it yourself and you can get going, or we can help you install it. And you can try our checkout for some time and see if it works for you and your business. And if it does, we’d love to keep you as a client long-term. So, yeah, that’s the big thing that’s coming is we’re gonna announce publicly that Parrot is available for all big commerce stores.

Heather: Osa, that is so exciting. That’s an enormous… I can’t wait. I will keep my eye out. Parrot will be on my mobile phone as soon as it can be. So, yes, reach out. Let me know. I want to be a part of it. That’s awesome. That’s really great.

Osayame: Thank you.

Heather: To close us out, I love to ask folks, especially when I’m talking to founders, what is some of the best business advice you’ve ever received? And if you can remember, from whom?

Osayame: It’s funny that you asked that question. My former boss, the CEO and founder of Mailchimp, co-founder of Mailchimp, Ben Chestnut, and I were speaking. And recently what he told me, and this is probably the best advice I’ve had recently, was build a real business, right? Like, I think that, for us, we’re VC-backed. We’ve raised 2 million bucks from VCs. So, the sense is you’ve got money in the bank and you can do what you want. But I think the hard thing, especially for founders who have not raised money, and I think even harder for founders who have raised money, is to focus on the core dynamics of your business. Like, keeping your customers happy, whether they’re people you’re making t-shirts for or people you’re making software for because if you keep them happy, and you build a real business around them paying you to do stuff for them, you’ll be recession-proof by default.

Heather: Thank you so much for being here today. If folks wanna get in touch with you, or if they wanna learn more about Parrot, where can they find you? How can they reach out?

Osayame: Yeah. If you’re interested to learn more about checkout or texting or SMS, please go to getparrot.com, I’ve got a bunch of resources on there and you can get in touch with us. Otherwise, just send me an email osa@getparrot.com and I’d be happy to answer any questions you have.

Heather: Wonderful. Thank you so much for joining us today. It was really, really great having you on the show.

Osayame: Thank you. It was great to be here. Have a good day.

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