Embedded Payments with Mark Bishopp of Fortis
“Payments isn’t easy, we make it look easy.” Mark Bishopp, Senior Vice President of Embedded Payments and partnerships at Fortis discusses with us embedded payments experience, the security measures Fortis takes to make sure your information is highly secured, and the changes Visa made to its surcharge rules. Mark also gives us insights on who Fortis chooses to partner with and why.
Payments & Fintech Insights In This Episode
- A future of seamless transactions
- The flexibility Fortis offers and the customized payment service it provides
- What makes Fortis stand out as a service among other services like Stripe and WePay
- How surcharging is similar yet very different from cash discounts
- And so much more!
Today’s Guest
Mark Bishopp : Fortis
Fortis delivers comprehensive payment solutions and commerce enablement to software partners and developers, processing billions of dollars annually. The company’s mission is to forge a holistic commerce experience, guiding businesses to reach uncharted growth and scale. As the solution of choice for the future of payments, Fortis moves commerce closer to invisible with a proprietary platform that supports and strengthens the commerce and payments capabilities of software partners.
Featured on the Show
About PayPod
PayPod is the leading voice in the payments and fintech industry, covering payments, risk management and new technology. Host Jacob Hollabaugh interviews leaders who are shaping the payments and fintech world, as they discuss the latest developments in the payments and fintech industry.
Episode Transcript
Jacob: Welcome to PayPod. The Payments Industry Podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world from payment processing to risk management and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show, we are sticking to our namesake topic and taking a look at the core of the payments world embedded payments in the payment partners behind them, as well as some recent industry shaping news and trends. Joining me to explore these topics is Mark Bishopp, head of Embedded Payments and partnerships at Fortis, the payments partner dedicated to transforming commerce into your competitive advantage. Mark, welcome to the show. Thank you so much for being here.
Mark: Appreciate it. Jacob. Looking forward to the conversation.
Jacob: Yes, me as well. Let’s start with just a little background on yourself, if we can. How did you come to be in the payments world and can you tell me a bit about your role and scope of work at Fortis?
Mark: I’d love to. I’ve always been around the movement of money in some form or fashion, starting out with PricewaterhouseCoopers in terms of gaining some consulting knowledge, but always around banking in the movement of money. Many moons ago at that point, but got my chops into payments about 15 plus years ago after building trading systems and allowing traders in Japan to trade on the New York Stock Exchange and split second timing, parlaying that technology and the movement of money for a trade into the new world of payments and what that means around the world and being able to accept it electronically in person and so on, and have held roles with major financial institutions running their entire merchant practice back to start ups in terms of building some flexible technology and some disruptors in the payment space to then coming back into someone like Fortis that’s somewhat more mature in the industry. That builds a platform around empowering buyers and sellers to really conduct commerce the way it should be.
Jacob: Yeah, amazing. That’s a fascinating entry point into the world to as a one time and still sometimes trader myself thinking about that as kind of the early the earliest where digital payments were kind of happening before it became the way to do all commerce. Pretty cool. Entry point. Well, we’ve got some background on you. Let’s refamiliarize ourselves with embedded payments, a common topic on this podcast, But at a high level, what do we mean by embedded payments and what would you say are some of the ideal features of an embedded payment solution?
Mark: In terms of embedded payments, it’s really about seamlessness. So all of a sudden you and I as a consumer, when we start conducting a payment for something, whether it’s in person or online, did it go smoothly that I have to take extra steps? And so what’s really the industry meaning by embedded payments now is that type of technology or seamless experience that a firm can provide any business, whether that’s a software vendor or a merchant themselves or others, to really embed that payment experience into the overall merchant experience so that it seems like the same experience at that point. So really all embedded payments are is a series of technology built within a larger ecosystem of either that merchant or a software play or others to really help the card networks do what they seem best, which is protect a buyer and a seller and the internal pieces that that works with.
Jacob: Absolutely. And how does your proprietary payments platform integrate with existing software or platform used by your clients? Any examples of successful integrations with software providers, marketplaces, developers that you could share?
Mark: I’ve got to keep it as generic as we can to protect some of the innocent, but we’re very specific in terms of from startups through to large enterprise clients, the ability to create very white labeled embedded experiences, saying we’re API first, right? So the hacker group has ranked us amongst the tops of building APIs specific to payments across 5 or 6 different spectrums to make sure that we can have that flexibility to work with any size client to give them that customized view of its branded you. It looks like you you all of a sudden become a complete payments expert with us doing the payments behind the scenes. So our success is watching our clients utilize those APIs and create those experiences. That is difficult to get with just going to directly to a bank.
Jacob: Absolutely. And as e-commerce transactions continue to grow, I mean, they’ve been around for a long time growing and growing, becoming the only real player. We see also a massive influx of transactional fraud in that dreaded world word in the payments world. Chargebacks. What’s Fortis is doing to protect merchants from e-commerce scams, from chargebacks, from fraud in general.
Mark: Fortis has put together a number of tools and partnerships ourselves to create the ecosystem of Fortis. So it’s not just ourselves, and we’ve built this great platform on our own. We’ve partnered with top acquirers in terms of the industry to make sure that we’ve got the backing and the sponsorship to conduct credit card payments. And they’ve got their own sets of rules and regulations that we need to follow that are extremely strict of all the different guidelines that we need to follow. Sometimes that means partnering with a chargeback company that then helps our merchants really get to the bottom of quickly identifying the chargeback, having the tools that make it seamless in terms of it either is a legitimate chargeback or not, and then remediating that chargeback. But also on the fraud piece, there’s a number of different fraud pieces going around. From an e-commerce perspective, whether you get an email that looks like it’s from us or some type of text or anything thereof, we’re very specific in terms of the instructions that we provide both the buyer and the seller in our ecosystem. When you get a message from us, this is what to look for. We only send emails in a secure email form. So it does take a couple of extra steps to communicate with us. But we do that by design because when you’re using embedded payments, you get hackers and scammers all the time trying to pick apart that movement between your website and your payment processor and others. So that’s why we always recommend, you know, as part of this whole payments as a strategic asset relationship, make sure you cover that with whomever your payment processor is, that they have those strong tools to make it look seamless again, because payments isn’t easy. We make it look easy.
Jacob: Absolutely. And certainly, unfortunately, with the speed of technology and everything these days, the bad actors out there, there’s only more and more of them going around to be concerned with. But good to know you’ve got a partner on your side protecting against that. You have Fortis has traditional ISO relationships and are also a pay back with nearly every major acquiring bank. What are the advantages to you as an acquirer of maintaining so many bank relationships and what are the advantages, if any, that a customer might benefit from who processes payments? With Fortis.
Mark: There’s a number, but I’ll try to come up with the the most important, which recently, even in this past week and past days, we’ve seen what’s happening in the financial system of banks that are supposedly very solid and others and that comes directly into your payments. It might not be with your credit card provider, but even your days that you settle to. So we make sure that we’re working with Tier one financial institutions and still spread our volume across a number of those acquirers to ensure that if anything does go south and things do go south and payments at times, that it doesn’t impact a merchant and doesn’t impact a customer at that point because those are the two that drive regulations of are you disadvantaging one or the. Other. And if you are, you’re going to get a little scrutiny. So within our solution, we made sure that we were already partnering with the top acquirers, but we also have the relationships with those acquirers. So by having those acquirers isn’t just enough. You have to have influence over them, which we do. And so Fortis has brought in experts like myself and others that have deep connections and knowledge with the decision makers so that we can help influence risk and others. And that’s what benefits the customers of ours because we have their back when it comes to their type of business making sure that they get the throughput of transactions being approved, its timely, the money’s moving and there’s never a question and they know where their money is at all times. So we’ve gone to lengths to make sure we’re diversifying across the tops in the industry that are backing us from a sponsorship perspective, which you should be looking for when you’re trying to partner with somebody and conduct payments as a small to medium merchant.
Jacob: Absolutely. And certainly topical conversation, as you alluded to, because, yes, issues do happen, thankfully not as frequently as they have in the last week or two, and hopefully they will not continue to happen as frequently as we’ve seen within the last couple of weeks here, but they certainly do regardless. So you kind of touched on a few of the points I think you might answer this with, but I still want to ask it directly. Your white labeled solution competes head on with services like WePay or Stripe big behemoths in the industry that from the consumer side might recognize those names. Can you talk a little bit about what you see as the differentiator between you or in someone like them and what kind of sets you apart in the field?
Mark: Certainly. And there’s a number of behemoths, right? They’ve been out there for a little while. If you look at the early PayPal days and then it starts to evolve into a Square and a Stripe and some of the others. And for some businesses that are dipping their toe in the water, that may be good enough at that point. But you need to be very careful. It goes back to this whole payments as a strategic asset. You’re not treating as a payment strategic asset if you’re going with some of those because you’re just doing a buy rate, you’re not getting rev share. You’re getting a very regimented and very scripted way that you can conduct a payment and that doesn’t give you a lot of flexibility. So with the Fortis platform, it’s one of the reasons why I actually joined Fortis in this leadership role was because they built that ecosystem that does have the flexibility, actually has people you can call, you can try to pick up the phone and call the others that I’ve mentioned. It’s not so easy at that point. You can’t even get a live chat person that would actually understand your business.
Mark: We provide those aspects and it goes back to being that trusted advisor. We give advisory services away for free. I’ll sit with organizations, whiteboard their entire business and then help them with their payments journey as they’re going through showing them each step of the way. Security controls. How much does that cost? But more importantly, how do you turn this into a revenue generator and how do you make sure that in your existing relationships we’ll even help you if you’re with one of those that are there to then help either transform to us or someone like us. But we haven’t found somebody like us that does the advisory services and actually can sit their C-suite together to really understand payments, because it may look easy, like I said earlier in this discussion, but it’s not. There’s a lot of moving parts behind the scenes, and Fortis has done a good job to really orchestrate those moving parts into a way that makes it seamless for any size business to conduct payments the right way.
Jacob: Yeah, that’s quite the extension. And definitely flexibility is one of so many different things that are key to any possible business in any industry, but I would think flexibility, chief among them to be able to move and whether it’s scale or pivoting changing, that’s definitely going to be helpful. And had you might have seen me kind of snicker when you said try to call some of the other ones that have been named, I maybe may or may not in some of my businesses have actually made a phone call or two of that nature. And you’re not wrong about what you alluded to there. So that was kind of funny there. Let’s talk about a bit of recent news that I’d love to get your opinion on. Visa recently implemented changes to the rules on its SURCHARGING program, which allows businesses to pass the cost of accepting credit cards to their customers. Could you walk us through the most noticeable changes to these rules and the impact they might have?
Mark: Love to and has always been the front runner of types of rules mean they are the ones that named payment facilitation payment facilitation, and they’ve had other iterations before that. But when it come to surcharging, they’re trying to take the lead out of all the card networks and I’m well connected in all four card networks. I’ve helped influence some of these surcharging decisions. I’ve worked with other companies on Capitol Hill to help influence the state rules on surcharging. So there’s a lot of moving parts when it comes to surcharging and kind of caveating the question to set the tone of, you know, visa’s all about protecting the merchant and the consumer. It’s all I care about, the moving pieces in between their noise to visa. And so as we’re going to start walking down, you know, the changes to surcharging, this really impacts the number of people that get involved between a buyer and a seller, But the buyer and the seller themselves, that’s what Visa’s really after. So all this change is, is after the blanket rule of the most you can charge is 4%. They just came out and said, We’re going to lower it back to three and here’s why We’re going to lower it to three.
Mark: We’re going to keep all the other rules the same, but we’re going to lower it from 4 to 3. And they’ve been getting a lot of backlash to it. Even, you know, as of this week, again, there’s been a couple of articles of, well, maybe Visa’s might backtrack or others. But I’m like, no, they’re going to stick to this and here’s why. Maybe so the ink isn’t even dry on the news yet. They just wanted to be the first to come out and say it to see what kind of reaction they would get. But we’ll see how effective it is at that point because there are people making money in surcharging. And that wasn’t the intent. The intent was to protect the small to medium business, for lack of a better term, compete on a major playing field as there’s price tightening. And there’s especially now in this economy, everyone’s about, you know, where every dollar that I’m going to from a small to medium business and how do I compete against the bigs if I have to pay this onerous charge when somebody uses a card? You know, at that point.
Jacob: Do you see it being a little bit of a wait and see game to see the effects of this change? Or do you think the other companies will kind of follow suit very quickly in Visa’s footsteps there?
Mark: Think the other card networks will follow suit fairly quickly, that it might it go up to maybe 3.25? Probably it’s going to fall somewhere between 3.5%. But I think the days of 4% are pretty much over at that point. And some people have taken advantage of that because technically the rule is you cannot surcharge more than what you, the merchant, are being charged. So if your rate from one of those companies that you mentioned is 2.9 to $0.30, you can’t charge more than 2.9 and $0.30 when it gets very tricky when you start to do that. And if your credit card processor is telling you you can, you know, then just be wary of that. When you read about, oh, your credit card processing is free, someone’s going to pay for it. And that’s where the surcharging comes in, where you’re going to put that on your consumer.
Jacob: Yeah, absolutely. And cash discount is similar program to surcharging. Do you anticipate changes coming from card brands on this program as well?
Mark: See don’t only because surcharging is similar but vastly different at the same time. So surcharging then becomes, well, I’ve baked it into my price and if you use ACH or something, if it’s online or if you’re happen to be in the store and you want to pay cash, I’m going to charge you something different. And so then that comes down to a point of sale capability and other aspects. You know, we can cover either within Fortis, but the rules are different at that point because typically that doesn’t impact a Visa and a MasterCard because it’s not going to be done on a credit card. Well, because I paid cash or I paid ACH, those rules, even though they’re still dictated by states and the regulators, a different set of regulators. I know those folks as well. And they’re going to leave it the way it is currently right now because that’s up to a business because they’re pricing their product and then they offer a cash discount. I mean, if they offer up 50% cash discount, that’s up to the business at that point. They’re not really surcharging. They’re just saying, here’s our prices and we’ll give you a break if you pay cash.
Jacob: Yeah, absolutely. Looking kind of ahead to the future. Maybe the next 5 to 10 years or so. There’s been a bunch of recent in the last 5 to 10 years changes in operationally where payments are happening, where the sales are happening, things like NFC text to pay all kinds of new ways for the consumers to remove some of that friction and make things more seamless. As you said before, as someone who’s, you know, been so embedded, sorry for the horrible pun in the industry for so long, where would you say are kind of the highest growth verticals looking out the next 5 to 10 years or the areas you see becoming of like some of the ones I just mentioned like NFC or text to pay, which areas do you kind of see as the biggest burgeoning growth areas of the industry?
Mark: There’s a ton that are coming into payments in terms of how do we create this frictionless experience, how do we help with loyalty and really empower these you know, you’re trying to empower the small to medium businesses because that’s where you get your growth of others. But even Enterprise, how does any merchant accept payments a little more without the less friction of everything else? So you get things like wearables. So I just came from a conference in Vegas this week and they were debuting, you know, wearables to where you can pay with your ring at that point because now I’m wearing an intelligent ring that’s got all my credentials. It can already know it’s identified myself due to my biometric. At that point, it’s on me. I can come and scan it just like a contactless at that point. So some wearables are coming in, but a lot of the the new types of technology are all around the blockchain. So not so much crypto, but the technology behind crypto. So you can get instantaneous reconciliation because then that starts to disadvantage the banks who make money holding it, giving it to you in a day or two days, even it to give you real time payments.
Mark: It’s not reconciled right away. This starts to change the game in terms of reconciliation. It changed the game in terms of international capabilities restart having, you can eliminate cross border fees and so on with blockchain. So I think that’s going to be a big one. You’re going to see still three, four years out before that’s adopted. But what you’re seeing now are more things like open banking. You can do open banking payments now much faster than you could before, instantaneous payment of a good. So as soon as the good is received, payment is received. That’s still embryonic and payments when you’re getting there. And then you get this whole payment orchestration. How do I manage all of that into one seamless experience? And again, it goes back to walking a client through where they want their maturity to be because these technologies are here. But some are embryonic to your point of where you’re saying, do I need all those toys right now? Probably not, but pay attention to them at that point. If you want to play, they’ll be table stakes soon enough.
Jacob: Yeah, absolutely. And everyone wants to be omnichannel, but yeah, paying attention to I might not need this as a small or medium sized business right now, but what are my consumers going to continue to want? What are they going to get used to having in other places? You know.
Mark: What does our consumer assume that I have? Yeah. So you might want some of this technology. Well, I’m not going to do business with you, Merchant, because you don’t allow a certain payment type and at which point they’re like, Well, you’re not going to use it. It’s like, No, I just need to know that you have it so that I know you’re a technology forward type business and your competitor has it. I might not use it with your competitor either, but because they have it, it shows me that they have their head around payments and my well-being as a consumer and others. So these merchants need to be able to partner with someone that can give them the tools and the toys to make them look bigger than they are.
Jacob: Yeah, absolutely. And definitely just that perception matters so much. Just around again, like you said, just because I don’t actually want to use it, it does affect what I might think of a place. If I walk in and I’m like, Hey, the last couple of places I’ve tapped my phone, used my wallet on my phone to pay, and I was hoping to do that again. Yes, I have my card in my pocket, but it whether I do or not, it comes back the next time. I might think differently just about how forward thinking are you, how much you taken care of your customer, this, that and the other. Are there any other trends in the payments industry that you’re keeping a close eye on for 2023 and beyond? Anything we haven’t touched on that’s kind of top of mind for you right now or for Fortis to stay on the front of the wave of.
Mark: It’s still about international payments because it still becomes confusing If you’ve got somebody. I’ll keep using the Japanese example of here I am a bookstore in the United States. Somebody in Japan wants to buy a book and ship it to themselves. That’s an expensive transaction of yen into us, us back to yen and all those conversions. Or do you use some of these newer technologies that now allow that bookstore to have local facility in Japan without really being in Japan? And so the transactions conducted in local interchange conducted all in yen, and then it’s a much cheaper settlement back into us. When you’ve partnered with the right folks and, you know, for us, we look for those types of unique companies that we can make part of our embedded payment experience. So now we’re empowering small to medium businesses to be able to go elsewhere in the world. So we make sure that we partner with the right forward thinking technologies that allow the expansion of commerce at that point. But we’ve pretty much talked about the others, whether it’s biometric blockchain, contactless is already there, but how do you really make the seamless experience to your point to contactless and how do the regulators hold all these new toys responsible for the rules at that point? If you look at pay at the pump, for example, it took forever to get a chip at the pay at the pump because they just balked and said, no, I’m not going to pay attention to your rules.
Mark: Now they are and they’ve got to have contactless and other pieces. So those are kind of the trends. I’m looking for more of that seamless transactions in multiple different ways so that you and I can conduct business a little easier than having five electronic wallets in our phone too. So we still have some cleanup to do of some of the cool stuff that we’ve invented. Now there’s almost too much of it. And so they’re forcing us to pick and choose and you don’t want to carry around too many of those. So a little more centralization of some of the cool tech that’s come up combined with some of the new stuff is kind of the next 2 to 3 years.
Jacob: Yeah, fascinating. I love it. Yeah. And definitely that last bit there kind of made me chuckle again, just thinking of there are times I walk into. Places and realize like I have about 15 different ways I could pay right now, depending on what technology you have. I don’t think I need all I don’t think I need all of those. I don’t need my next suddenly my whoop strap to also be able to hold a wallet for me. Although I bet if they wanted to do that, companies like that might add it in the restaurant.
Mark: Probably sent you a text and all of a sudden I’m like, Well, no, I’m about to pay with this and here’s a QR code, so no, I hear you. Yeah.
Jacob: And then try to think, Well, which is it going to be cheaper in any particular one of these? And yeah, there’s a lot out there. Definitely some consolidation will happen, but tons and tons of incredible new tech that will hopefully, as you’ve pointed out a few times, the the forces do look to be keeping the consumer in the merchants in mind as much as all of the other players within the industry, which definitely is the better way for the whole industry to move as a whole. So it’s good to have heard from you throughout this that most of these changes, most of these things are coming with the thought process of making it for the merchant and the consumer the best it can be. Mark, this has all been an absolute pleasure. I can’t thank you enough for the time and knowledge you’ve shared. Before we go, for anyone listening who would be interested in learning more about Fortis or who’d like to follow you, where would be the best place for people to go to do those?
Mark: The easiest place is to go to Fortispay.com. At that point you can get all the information that’s there. You know hit me up on LinkedIn. I’m always answering direct messages and things there. So no issue at all, you know? Please do. We’re a trusted advisor at Fortis. First we take our hat off and we give you the open, honest opinion in terms of where our payments going, what are your needs? And sometimes we point you in a different direction, but often we’ll be able to help you in most cases. And so just be careful of who you work with. Make sure that they treat payments as a strategic asset.
Jacob: Love that mindset. Well, this has been amazing. Thank you so much for joining us on PayPod Mark and I hope to talk to you again soon.
Mark: Thank you. Really appreciate it. It’s a lot of fun.
Jacob: 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 S O A R P A Y Dot com slash podcast.