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Modernizing Payment Infrastructure with John Lunn of Gr4vy

The number of payment technology options continues to increase, but companies often resist adoption to avoid the cumbersome process. In this episode, we sat down with John Lunn, CEO and Founder at Gr4vy to talk about the power of providing companies with the ability to scale and maintain control of their entire payment stack from anywhere.

Payments & Fintech Insights In This Episode

  • The way complex processes cause frustration, leading to innovation.
  • The barrier of a long runway to integrate valuable payment options.
  • How open banking is increasingly cost-effective and efficient.
  • The importance of a service infrastructure that allows for adaptation internationally.
  • 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 modernizing the future of payment infrastructure. Joining me is John Lunn, CEO and founder of Gr4vy, the only cloud native payment orchestration platform, giving you scale and control of your payment stack from anywhere. John, welcome to the show.

John: Thank you, Heather.

Heather: Absolutely. So, to start us off, tell us a little bit about yourself. What got you into Fintech and what led you to this point?

John: I’ve been doing Fintech since the time of the dinosaur, so I did not get there like everyone else by accident, but I started in Fintech in 1997. So yeah, that’s dinosaur time when it comes to internet, with probably the first internet payment company called CyberSource. So, I joined that company pretty much straight out of college in the early days when no one was taking payments online and helped build that out. It’s a long time.

Heather: There must have been such a steep learning curve, it feels like now as new tech companies pop up, they’re able to sort of pull from who has done something similar before. What was that experience like being one of the first in internet payment platform technology?

John: It wasn’t so much learning as hacking it and seeing what worked. So, it was more experimentation. Like, we had, in our early days, instances where people tripped over wires in the office and took down, like, three clients, and you had all of that stuff going on. It was fascinating. A lot of it was trying to jerry-rig old banking technology, and making it work on the internet. And I’m not ashamed to say sometimes we used printers and interns, but we got there. And it was really when it was exciting times, it’s when you’re inventing something new and just seeing transactions run through and making a difference. It’s great.

Heather: So, take us to today. Let’s talk about Gr4vy. What was that aha moment that gave life to this concept?

John: Pure frustration. So that is the moment, but I think often you see things and you just get annoyed by them, think we could do better and this is just one of those. So, I was working at PayPal and I was coming up with this idea and I just kept on having the same conversations with people selling online. And the conversation would be is, why don’t you do something? Why don’t you add Venmo?

Why don’t you add this other payment types or why don’t you do this? And I’d just get the standard answer of this is going to take eight months, this is gonna take two years, or my roadmap is full. And as someone who loves payments and sees all this great technology coming out, not being adopted because it just takes too long and other things are happening, it was just frustrating. And I’m like, there’s gotta be a better way. There’s got to be a better way to do this so this isn’t so burdensome for merchants or retailers.

Heather: So what is that better way? Walk us through it.

John: Sure. So, like most things, right? When things get complex, you add a layer on top to simplify it. And I think this happened with shipping a few years ago where you used to have to connect to FedEx and UPS and all these guys, and then someone built a platform to say, “Hey, why don’t we just integrate all of them and then you can pick the one that works for you?” So we looked at that model, it worked very well in shipping. We looked at payments, looked at the hundreds of different APIs out here, out there, different documentation, no standard really across it and said, “Look, let’s put a layer. Let’s take the complexity out by putting a layer on top of that that connects to all these different APIs and weird and wonderful payment types, and simplifies it for a retailer so they only have to integrate once and then once they’re integrated, adding, removing, changing a payment type should just be a few clicks of a button, which is done by a product manager and not by an engineer.

Heather: It sounds too good to be true almost.

John: But behind the scenes there’s a lot of hard work that makes it happen, but yes.

Heather: Well, and I think that that’s one of those, my curiosity lies a little bit in that customer journey you’re talking about where you alluded to this, like, why don’t you just add this? Why don’t you just add this? And the pushback of the time, the runway it would take to implement those sorts of technological advancements or changes. Adding a new payment type is not that easy. You can’t just turn it on and run with it. So, what do merchants who are entering a new market, what do they need to consider in terms of compliance, regulations, what all goes into to choosing their payment platform?

John: Going into a new market, it’s really how do people that you want to sell to pay? I kept on seeing this in my previous roles, where a merchant would enter Germany with nothing but credit cards and I think at the time, the stats was 5% of Germans owned credit cards. And so, if you do that, what’s the point? You’re only going to address potentially 5% of the consumer base and even then, you’ve still gotta win there.

So, I just saw things like that. We have a habit over here of assuming everyone in the world does things the same way and credit cards, yes they’re very, very, very widely used but in many, many countries they’re not the main way people want to pay. And so that education, learning how do the people in this market pay for goods and how can I make that available makes a huge difference because we know, and there’s plenty of reports about this, if you don’t offer the consumers favorite payment choice, they will go and buy that item somewhere else.

Heather: Absolutely. Simplicity and favorite payment choice above all else. And now I feel like when it comes to payment choice, it just keeps expanding and expanding and expanding digital wallets, this sort of rise. I spoke to someone recently about the many different companies that are offering installment payments and those sorts of things. What are some of the payment methods that you are particularly excited about right now or things that you see potentially coming down the line?

John: I think the biggest thing, of course, is still open banking or whatever, real time payments, that is really fascinating because it currently is artificially annoying in how long it takes to pay money from one bank account to another bank account. Like, crypto, credit cards, those other things prove that doesn’t need to be the case. And I think the experiment in Europe is now getting a bit more mature and we’re seeing, like, our merchants in the UK, for example, all of them want to add open banking now, because the consumer experience has got good enough, and frankly, the cost saving is huge. Like, for you as a retailer, you are paying a fixed rate on a transaction, you’re not paying a percentage of the value of the item you’re selling. The use case is very easy and the fraud rate will get better.

So, I think it’s just overall, that’s exciting for me that moving money from where it is to where it needs to be in an efficient way is fascinating, and I can’t wait to see what happens over here as it evolves. So that’s exciting. I think the evolution of buy now pay later, installment payments, whatever we want to call them, and how that’s been adopted and being adapted and changed, I think is also really interesting. I think some of the models we are now seeing aren’t perhaps consumer-friendly as they need to be and we’re seeing people come up with alternatives. So, plus the wallets, plus everything else, I think a lot can be done here in consumer loyalty, stickiness and really in some of these cases, the game is more about data than it is about payments.

Heather: Right. The classic know your customer adage. Absolutely. Let’s talk about security and privacy. Fintech and payments sit right there near the top of the industries where it’s most important or exchange of money and our personal private information. Talk to me about Gr4vy’s approach and philosophy around security and privacy.

John: To start with, as you can tell from my strange accent, I’m not from these parts. So, we started [inaudible 00:08:48] look, we took the hardest standard in the world and we started that. That was our basis point. We said okay, we’re going from day one, going to meet GDPR globally. It took a bit longer than if we had put something together on other standards, but we started from day one, we’re doing that. From day one, we went and got our entire system PCI audited for Level 1 security. We’re now working our way through SOC 2 and we’ll get there soon. So, we came out the gate going, look, this is payments, this is people’s money, this is people’s data, this is very important, let’s do it right.

But one fundamental difference between Gr4vy and pretty much anyone else in the market is the way that we built an architected Gr4vy, is more like a cloud company than a payments company. So, every instance of Gr4vy is spun up for our client, and is only used by our client wherever they need it in the world. And that means there’s not a central database somewhere with all client consumer records. This is based that it is unique to that customer. It’s segregated, it’s in every other instance of Gr4vy in the world, and the merchant owns that data. So, we’ve really come from a point of view is, we’re not playing the data game here, we’re playing the infrastructure game.

So, we’ve built this out, we put it in the locations that the merchant needs it and get… I mean, so we have merchants in Europe that need to meet GDPR, which means their servers need to be hosted in Europe. So, we spin up their instance of Gr4vy in the country they want to, and if they want to meet German data standards, that’s where their instance sits. And it puts us in a great position because if we built this as a SaaS, so we built this as a central point you’re connected to, we would’ve had to pick a geography. We would have to put it out in a geography and that would’ve restricted who we can sell to and how we can sell to them. But with the way that we’ve designed it, we can literally put Gr4vy in any data center in the world that supports serverless infrastructure.

So, follow from that, there’s countries like India where they have these new data protection laws about payment data, where payment data is not supposed to leave India. Now that’s a problem if you’re using your PSP which has got its service based in US, that’s actually breaking the rules. We can spin you up an instance of Gr4vy in an Indian data center for Indian payment types for Indian customers where your data will never leave the country.

Heather: That’s incredible. You must be so proud.

John: It was a design philosophy. From day one, we said, let’s build the most flexible, scalable, and secure platform we can.

Heather: The experience of a founder from the folks that I’ve spoken to is there’s a lot of overlap when it comes to that moment of frustration must solve the problem, but there also requires a ton of resilience to move through the process of finding a solution to that problem and then convincing people they need to buy it and implement it. You have a story about a moment in those early days when your resilience was tested, a moment when you really had to sort of hold on tight and push through and say “Yes, I know this is going to improve people’s lives and improve this process.”

John: Personality wise, I’m an endurance athlete, ar an Iron Man. I cycle long distance, I swim in cold water. I’m kind of very stubborn, resilient person. So, I kind of just stick through everything, and probably the frustration of my wife and others, but that’s just the way I am. So, I would say, and this is gonna sound weird, no, I don’t because we had thought about this solution for five years before we built it. I tested the idea with retailers and people in the industry, and it just made sense. So, so far I would say no we haven’t, I think we’ve been surprised the way Gr4vy’s moved and the interest we’ve had from large enterprise brand names that we didn’t expect at the early stage apparently.

But yes, look, one of the hardest things as a founder is to fundraise, because that’s one of those things where you’ve got to accept 100 rejections before someone takes a meeting kind of thing. That’s how it works. And it’s hard not to get frustrated or down when that happens. But again, before I started Gr4vy, I spent five years as a VC, because I wanted to learn the business, and I wanted to learn what it was like to sit on the VC side of the table, so when it came to these things, I knew how to go, I knew the people I wanted to talk to and I managed to shortcut the process by really understanding the VC business before I went to go and raise money.

Heather: Is there any insight you can provide our listeners from those five years you spent in VC? If somebody today is listening on that precipice of wanting to turn their idea into a reality and go into that fundraising phase, what would you tell them?

John: Well, two things. Keep it simple. Don’t share everything about your company in the first meeting or in the deck that you send. Don’t do that because people skim-read and they’ll skim read and if you’ve shared everything and they skim-read and don’t understand it, they’ll give up and they’ll never call you. So, the first thing is keep people hungry.

Heather: Oh, I love that.

John: Yeah. The second thing is check who you’re pitching to. So, I help a lot of friends and startups and other people. I do a bit of, and still do a bit of investing myself. But make sure if you’re a security company, pitch the VCs that do security, don’t pitch the VCs that do consumer products. Because I get a lot of people like, “Can you introduce me to so and so?” And I’m like, “That guy does B2B software and you are doing consumer hardware, why would you want an introduction to that person?” And it makes no sense.

And so do your research, sit down, work out who you want to pitch to and why, and don’t pitch to a series B investor if you’re doing a seed round, there’s no point. So, really, like, just do some work beforehand. And I think a lot of, because of that, like, 100 reach-outs and 1 phone call back, a lot of people just throw out a wide net everywhere, and it doesn’t help you and it doesn’t help you mentally either to get 1,000 rejections when actually you shouldn’t have even emailed 900 or so.

Heather: Be smart and efficient with your time.

John: Yeah.

Heather: Absolutely. Let’s circle back to Gr4vy. I asked that question about resilience, and you had said that you’d thought about this idea and how to solve it for years before actually taking that leap. It would be near miraculous to say that every single person who could be a client or a consumer of Gr4vy is one. So, what are some of those learning moments you had once you launched? Reasons people pushed back that surprised you.

John: The first thing that surprised me is that I came, I was at CyberSource and then I was at PassMark and then I was at PayPal. The first thing is an ego thing, right? So, when you walk into a merchant and you are wearing a PayPal badge, they will open the door and welcome you in and have a chat with you. That’s not the same when you’re running a startup they’ve never heard of. So, at first do not make the assumption that just because you were something before, you are now. And I think look, the world is going through a difficult year this year. I went to a big conference in Europe for CEOs of the world’s largest retailers, and I heard the word survival a lot. It’s tough to hear from big brand names that you’ll see on the streets. That’s one of the toughest things. Yes, we had a merchant, the dev team was in Ukraine and project stopped, so we did originally have a merchant who was based in Russia and we had to terminate.

And you have those that happened, but I think generally, things are moving a little bit slower in the sales cycle at the moment. And you talk to pretty much any startup or anyone selling, people are being more cautious. People are asking the question, do I really need to do this right now? And then you’re balancing it against, especially in technology industry, some people cutting back on staff members. So, I think it puts us in a really interesting position. In some cases, contracts that might happen are being delayed because people are gonna wait and see what happens. But on the other side, and actually more pressingly and more common for us, we have people calling us and saying like, “We liked you before and now we need you,” because we’re helping them basically move when the rest of the world’s not moving very fast.

Heather: That exactly was my thought while you were sharing that story, is that this might be an interesting time for Gr4vy, because if we’re doing fine, we could modernize our infrastructure and speed up the choices in the way we accept payments, and not right now. And then things slow down it’s like, “Okay, wait, yes, we need Gr4vy. We need to make sure this is as efficient and effective as possible.”

John: Yeah. And look, people are trying to cut back on employees, and Gr4vy has a product that allows you to do what an army would need to do otherwise. So that’s very important.

Heather: What does the ongoing relationship look like with your clients? What’s your customer support philosophy once they’ve adopted the product?

John: So, I mean, with our case, we’re growing our infrastructure, so we want to grow with our clients. So generally, we’ll go in and we’ll do, for example, we’ll help them with one market or we’ll help them with a couple of integrations that they need to move to. And as soon as we’re in, it’s literally at that point, it’s not a technology conversation anymore. It’s like, “Okay, we’re now thinking of launching our product in Mexico, can you help us? Tell us what are the Mexican payment types that are available? Who do you support?”

We make the introductions into the companies that do that. Merchant then goes, gives us the credentials, skips a button in their lives. So, from that point onwards, it’s much more like we are core to their infrastructure. We are part of their process and we are there as a partner to help them grow, expand, and change things. And when difficulties happen, we’re there with solutions. So we start by solving a problem, we end up as a core partner.

Heather: What does the long game look like? Where do you see the landscape of your company touts to be modernizing the future of payment infrastructure globally? What do you see it looking like 10 years from now?

John: Look, I think everyone in 10 years will have a payment orchestration platform. Hopefully the majority of it will be Gr4vy. We play in the mid-sized enterprise space. But I think there’s all the way through, this ability to add, remove and change and do all of that, necessarily throughout. So, I kind of view in 10 years time, this is like Twilio stepped into telephony, like it’s just the thing you do. I think you’ll see everyone running some orchestration platform, and I would hope, and we’re driving towards Gr4vy being the one that the large enterprise retailers are using.

Heather: I feel like it’s inevitable.

John: Yeah. It’s a tool, right? It’s, like, automatic versus stick shift, right? It’s going to that stage where, why would you do one when the other’s there? So, it’s a natural evolution. It just makes a lot of sense and I think things are getting more complicated. There’s more and more payment [inaudible 00:19:24] coming out, and I think that’s a good thing. Moving to a stage where it’s good for consumers and different groups of consumers and people perhaps who aren’t being served, then the payment infrastructure is going to have to change overall to support that.

Heather: Yeah, it’s incredibly exciting. We’ve had many conversations on this podcast alone about the way that the modernization of banking and finance infrastructure is allowing individuals who are unbanked or without credit to establish credit for the first time.

John: Yes.

Heather: I mean there are some really incredible ways that technology is mobilizing change around the world and it’s, ugh, I feel so lucky to be able to sit and have conversations with people like you, to hear about the ways that individuals and companies are doing that good work. I love to close this out and I know we talked a little bit about your founder experience, but I’d like to close out our conversation today asking you what the best piece of business advice you ever received is and from whom.

John: I can give you funny ones. Like, so my first officer taught me how to read upside down because that’s the best way to go to a meeting. You can see what they’re saying about you. But that’s just an [inaudible 00:20:33] one.

Heather: No, that’s a great one.

John: But yeah, that’s probably not the best. I think the best piece of business advice is someone said to me it’s more on how I manage… They said to me, “Why do you come to work?” And I said, “I come to work to change the world,” etc., etc. And they said, “No, you don’t. You come to work to earn money to look after your family and live a good life.” And that’s core and fundamental to me, is, like, I want everyone at Gr4vy to not only be dreaming of the bottom line, but actually living their best life. That’s why our staff are remote.

That’s why we do things like truly unlimited vacations, where we do wellness days, where we do all of that. I think a happy and contented workforce, of people working where they want to be and how they want to be means that the people just work better and do better work. So, that’s fundamental to me, it’s about the people that work in the company. If you have great people working on a good product, you’ll have a great product.

Heather: I feel that all the way into the core of my gut. I appreciate hearing you say that. John, that does it.

John: Okay.

Heather: Thank you so much for joining us today. If folks want to get ahold of you or they want to learn more about Gr4vy, where should they go?

John: They can just email info@Gr4vy.com and Gr4vy, of course has the four in it, so gr4vy.com.

Heather: Beautiful. Thanks so much for joining us today.

John: Thank you very much.

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.

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Gr4vy

Gr4vy is the only cloud-native payment orchestration platform, modernizing the future of payment infrastructure around the globe. Our cloud infrastructure gives you scale and control of your payment stack from anywhere, eliminating single points of failure, and shared infrastructure risks.