Providing the Best Checkout Experience Possible with Jordan Gal of Rally

Looking to optimize your online store’s checkout process and boost your conversion rates? In this episode of PayPod, host Jacob Hollabaugh sits down with Jordan Gal of Rally for a deep dive into the benefits of using a neutral payment processing platform. Rally offers a headless and fully optimized one-click checkout solution. Watch this episode for a fun and interesting dive into this latest development in payments and fintech.

Payments & Fintech Insights In This Episode

Today’s Guest

Jordan Gal : Rally

Rally is on a mission to bring power back to merchants and app developers by equipping them with a headless and fully optimized one-click checkout solution. Rally is central to the modern headless ecommerce ecosystem bridging front- and back-end platforms, and plays a critical role in creating a seamless checkout experience for customers. Rally’s team of industry leaders pioneered the post-purchase offer technology for DTC brands, driving over $200m in post-purchase revenue and processed $3B in sales. Rally appreciates a decentralized ethos and is merchant and revenue-focused, always.

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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 going to be discussing the checkout process. That last moment of truth, the final steps your customers take to cross that finish line, make that sale. And specifically, we want to talk about how to provide a better checkout experience for those customers of yours, as well as ways you could potentially increase your average order value. Join me to get into these topics is an expert on the matters. We’ve got Jordan Gal, founder and CEO of Rally, the company on a mission to bring power back to merchants and app developers by equipping them with a headless and fully optimized one click checkout solution. Jordan, welcome to the show. Thank you so much for being here.

Jordan: Jacob Thanks for having me on. And that was a dynamite introduction right there. Perfect.

Jacob: Thank you so much. I appreciate that and I appreciate you coming and joining us and giving us your time. So before we get into Rally itself and all the great things you’re doing there, I want to get a little bit of lay of the land, of what Ecom checkout experience has looked like over the past throughout the digital age. So I’m going to ask you to play a little bit of history teacher for us here and can you give us a little bit of a background on where Ecom Checkout started and what it’s looked like throughout the last decade, decade and a half as Ecom has become the behemoth as it is as the digital age as transpired and maybe inflection points or major markers where things have changed in the past and what Ecom has looked like.

Jordan: Yes, absolutely. I like starting off with the context of how we got to where we are today. You said it in the intro checkout is where the funnel concludes. That’s the moment of truth. And it is a strange thing in the market that right at that moment, the most critical part of the funnel is where merchants have the least control and that is related to the history of checkout and that is of being owned by the platform more so than the merchant. So if you think 20 years ago is really hard to get online, let alone transact online, and as technology made its way toward allowing merchants to get online, it starts off with like Yahoo stores and goes to Volusion and then goes to Magento and then makes its way to where it is today with Shopify, where you can launch a store in a weekend. So when platforms built for that use case, they built in a monolithic approach where the product provided the entire experience, the front end where shoppers interact, the checkout, where the transaction happens, and then the back end where the order management fulfillment and then the operations of the business live.

Jordan: When those platforms were built in that way, it was assumed that everyone uses a very similar type of a checkout and that that has remained. So if you look at platforms, if you look at merchants today that built their stores five, ten years ago, where you’ll see is a lot of rigidity right at the checkout because it’s really it’s where the handoff happens. The storefront, the merchant controls and tries to brand. And then once the shopper goes from the cart all the way to the checkout page, then it starts to be taken over by the platform. It becomes much more rigid and much more difficult to deal with. And now we have tension in the market because we have shopper expectations dictated by Amazon, where I can buy a product between leaving my seat now and going downstairs. We have Apple Pay, we have these QR codes in restaurants. It should be relatively easy to transact, but does not mean everywhere. Online is as easy to transact as people hope.

Jacob: Yeah, and those assumptions then that might not always been true get less and less true the more we get used to as a consumer of well, what percentage of my consumer life is really easy and really frictionless, like you said? Oh, I went to dinner earlier and it was really easy to order right on my phone and so fast. And so now when I sit down to buy that thing that I want and there’s a bunch of friction at checkout, it might not have mattered in the past when that friction existed on any type of purchase that I’m making. But now it stands out and I’m like, What the heck? What’s going on here? And maybe I leave it in, abandon it. And which is the other kind of phenomenon that is always, I think, the average consumer, even though they do it themselves, is always amazed to hear the numbers from merchants of like this is the amount of people that get to the checkout page. This is the amount of people that actually finish that and there’s a big gap there. Some people can be a little astonished sometimes at how big that gap is.

Jordan: Yes, that gap is why our company exists.

Jacob: Yeah. So then this will kind of lead us into why Rally exists and what’s Rally doing. What is the kind of current status of Ecom checkout as far as like the systems or types of payments that have the highest market share, like the most used types of payments or systems and things that are currently out there that you’re maybe trying to work to replace or improve upon.

Jordan: So there is an interesting fact in the market that a lot of the best brands, the biggest. Most successful merchants built their stores before the Shopify type revolution happened. And Shopify itself, while very popular, is not as sophisticated of a platform as some of those larger merchants require to run their business. And so you have this strange reality in the market that merchants that do 100, 200 and $500 million and up in annual revenue, their checkout process isn’t as good as a merchant that does $100,000 a year on Shopify because the tech was different and built differently. And the difficulty that merchants have in controlling and adjusting and optimizing their checkout in these other platforms. That is why our product exists, because it helps them do that in a newer, modern way.

Jacob: So let’s just go right in. Then you can take your history teacher cap off. I appreciate all of that background. So then you’ve kind of started to lay it out there. But tell me who Rally is, what Rally is, what Rally is doing? Kind of give me the high level overview, if you will.

Jordan: Yes. The easiest way to think about Rally is as a composable checkout. And what that means is it is an individual component in the stack that focuses on just the checkout portion of the experience, not the storefront, not the social media, not the email or landing pages or anything on the front end and nothing on the back end order management and Pim or anything else. It’s just the checkout experience where shoppers interact with the site in order to convey their payment info and receive a confirmation of their purchase. So if you think about your normal buying experience, you go online, you go to a product page, add something to the cart. When you click that checkout button instead of going to the old checkout that the merchant has been using historically, the shopper instead goes to the rally checkout that is branded for the merchant, so it doesn’t look like rally checkout. Looks like the merchant’s checkout. And what that does is it allows the merchant to leapfrog to having a modern checkout experience instead of developing their way there, which is difficult and expensive. So if they just want to point and say we want our checkout to look and behave like this, that’s where merchants look to our product. So yeah, this is something we’ve been doing for for many years. This is my second checkout company actually.

Jacob: Yeah, actually I’d seen that and wanted to ask, is this first checkout company still exist? Was this just kind of like an obvious extension or like a new area to go in? I wanted to ask about if there was a relationship between the two companies or just you knew the industry, you saw something new that needed to happen and why not do it? A new company versus the old one?

Jordan: Yeah, it’s a little complicated, but it is what it is. So the previous company was called Card Hook. I have since sold that company, but the reason that company’s history had an abrupt change in direction is because the previous company was providing a checkout for Shopify merchants. Gotcha. And Shopify decided to no longer allow a third party checkouts. So we grew a fantastic business. We did $3 billion in processing, we reached profitability, the whole deal. But one of the factors in e-commerce and in checkout specifically is that there is tension between the platform and their business model and their business interests and the needs and wants of the merchants. So if you think about that situation, we have hundreds of merchants, some of the biggest Shopify merchants using our checkout, but Shopify’s business model is reliant on payments, and so Shopify effectively decides to not allow the merchant to have what they want because it’s not good for Shopify’s business model. And that tension, it remains in other places on the web, not quite to the same degree as in Shopify world, but that is a problem and an opportunity. When you’re a platform and you have a checkout that’s doing billions of dollars in processing, the incentive to mess with that checkout starts to go way down. You have a lot of other things to figure out. You need front end. You got to deal with this new headless thing that’s happening. You got the back end, you got an app ecosystem, you have partners, and the checkout tends to languish once it’s up and running. But merchants want to impact it. So yeah, it’s it’s a bit complicated, but effectively we saw that Shopify was not hospitable territory for a checkout. And so I sold that company and raised venture to start Rally with a lot of the same people from the Hook team. And now we’re taking our expertise and bringing it out to the rest of the market outside of Shopify.

Jacob: Makes sense and I do want to come back in a few minutes to kind of the relationship to Shopify and how the kind of the whole market breaks down some recent news from them. But first, let’s kind of dive a little deeper into the two main products you’re offering within your checkout. The we’ll get to post-purchase offers in a minute because that’s something I think a lot of our listeners being business owners are going to be very interested in hearing about. But first, the rally. Component, the actual checkout and rally pay itself. Can you start with what types of industries and merchants are you working with right now? You mentioned kind of the size, the main goal of size, a company that you can really help, but are there specific types of merchants, industries that you’re working with to begin?

Jordan: Yes, we focus on merchants that sell physical products. That’s the first differentiator between digital products and they’re on traditional platforms like BigCommerce, Magento, Salesforce, Commerce Tools, SAP and so on. Sometimes custom our market is really focused on like 20 to 100 million in annual revenue and then some that are larger. And what these merchants are trying to accomplish is a better checkout experience that leads to better conversion rate. So what our product does is it replaces upgrade, replace whatever terminology. So they use our checkout instead of theirs. Okay. Along with that, if you’re on Twitter at all or LinkedIn, over the last few years, you’ve heard one click checkout ad nauseam. There was like a moment in time where between Fast and Bolt and these Twitter threads, it was it was a bit exhausting. But the reason that that became such a big thing for both investors and entrepreneurs and people in the market is because it’s a worthy goal. What one click checkouts try to do is eliminate guest checkouts. It is a very strange thing that even in 2023 you get to a site and you have to manually convey your first name, last name, address, city state like you already have that info. You should be able to just say I have decided to allow you store that. I’m currently on to have my info so you can buy very easily. So that’s what one click checkout tries to do. We have that as a feature, but it’s part of a holistic checkout solution. So when a merchant uses our checkout and a shopper goes through our checkout for the first time, their information gets saved to our vault. And then next time that shopper comes back to our to that merchant’s checkout or any other checkout in the rally network, they are recognized and can by very easily. It’s a lot like shape, but freed from an individual platform and processor and allowed to float outward on the web on any platform at any processor. So that’s pay.

Jacob: Yeah. And like you said, you’re doing both parts of it. One, it’s one of the payment options that is allowed within your checkout experience, but you’re offering the full checkout plus that option as well. And yeah, I think almost all of us have probably at this point, unless you’re one of those amazingly strong willed human beings that can stay off social media, almost all of us are probably familiar if we haven’t went through rally pay before, but with shot pay of the random Instagram purchase that we’ve unfortunately made dozens of in my life in particular, and I’m sure lots of people listening have made the get. They get sucked into those ads and get used to. Yeah, once you’ve done it once and you hit that checkout page, it pops up and offers just autofill. You’re one click, one button or then give you the option to go through and use any of the different payment methods that you would prefer to use. I do wonder, it’s it’s I think I know the answer to this, but I’ll ask it just to clarify for myself and anyone listening. If a merchant wants to work with you and wants to add this into their tech stack, they can be using any payment solutions, anything else on it. Like you integrate with pretty much anyone, right? Like you’re saying, you’re kind of the open source kind of idea of we can integrate with you whatever you’re using, we can come in and just replace that checkout part for you.

Jordan: Yes, the analogy we like is Switzerland, so it’s a very neutral point of view when it comes to payment processing. The other analogy is like a train station. So there are different payment tracks. There’s Apple Pay, there’s PayPal, there’s the credit card, there’s buy now, pay later. Those are different payment tracks. We provide the train station. As long as that payment happens on a track inside of our station, we are adding value. So we shouldn’t be so opinionated that we tell the merchant what they can and can’t do with their checkout. That’s like the opposite of our ideology overall. So we work with existing payment processors Stripe, Braintree, Adyen, Checkout.com, Authorize and so on, and we allow the merchant to bring in their existing processor relationship into our checkout. And then from there it’s like if you want to turn Apple pay on, you just click a button and turn it on. If you want to add a firm, you click a button and add it on.

Jacob: It’s customizable to what the merchant wants to offer their customers. You’ve got it all available to them. They can they can decide which ones they want to use, which ones they think their consumers want to use.

Jordan: Yeah, if you separate the checkout from the underlying platform, it starts to behave like any other piece of software where you’re in touch with the team and you ask for features. Right now, if you are on a platform and want to feature in the checkout, it literally is never going to happen. So we’ve talked to merchants doing 100 million in annual revenue and they cannot get Apple Pay onto their store. And then we show them our product and we click a button and Apple Pay appears and they’re like, Geez, this, why isn’t this possible? But guess that sometimes opportunities created by things that just are stuck.

Jacob: Certainly. Obviously the goal here is higher conversion rates. And with the success you’re having, I’m assuming. Those using your platform are having some success. Can you share any kind of case study or example of us to give us kind of that full picture of how it works and the type of conversion rate increases or other benefits that a merchant might get from incorporating this?

Jordan: Yes, it can be stark. The thing about checkout is it is a point of leverage. So if your conversion rate goes up just a little bit at the point of checkout, it changes the math of your business. It changes your return on ad spend and your average order value per visitor, all these different things. So small improvements at checkout can make a very big difference. Laminex is like a case study I think of because they were using the default checkout provided to them by the platform. They then switched to one of our competitors that I won’t name because I’ll be nice. And then they switched to us and their conversion rate improved going to the competitor and then it went from 50% checkout conversion to 62% checkout conversion with us. So it’s 24% increase in conversion for the checkout, meaning once someone reaches the checkout, do they complete the purchase? And that has made a tremendous impact on their business. And then they can spend more on ads, they can spend more on promotion because they know that more people are going to convert.

Jacob: Yeah, they can really start putting even more money into that funnel once it’s I mean, even a 1 to 2% increase in conversion rate has a massive effect at scale. And so 12%, I mean, that’s that’s pretty incredible. Let’s turn then to kind of the second offering that you’ve got that I find fascinating from both the business side of things, but also from, again, as someone who is maybe bought one too many things off, a random Instagram ad or whatnot and occasionally seen one of these pop up. I find it interesting from a consumer standpoint how a consumer interacts and thinks about this, but that’s post-purchase offers. If we can do another quick history lesson, if you will, put that cap back on one final time, I promise.

Jordan: Sure. No, like the context.

Jacob: When did when did post-purchase offers first become a thing and how have those kind of operated so far? Because I know they’re much newer in the world.

Jordan: They are so post-purchase offers. Let’s just define it real quick and then we’ll look at the history. So post-purchase offer takes the concept of Amazon’s. You may also like type of a cross-sell, that traditional type of a cross-sell that we see on Amazon and other sites makes a recommendation on a product that you may want to add to your cart and buy at the same time as the product that you’re already looking at. That is what we think of as a pre purchase upsell because you are making the decision to add it to your cart before you’ve made the initial purchase. We take that concept and we put it on the other side of the checkout. So you go into the product page, you add it to the cart, you go to the checkout, you go through the checkout process and hit the buy button and then after the checkout, but before the confirmation page, you’re shown an offer. The interesting thing about that is, right, there’s a whole bunch of stuff around there. It think about the psychology. What you’re alluding to. You are at Max Euphoria. You just bought something, so you’re feeling really good. So to make an offer at that time is interesting. You’re also not endangering the initial purchase.

Jacob: The initial purchase is locked in.

Jordan: It’s locked in. Even if you close the browser, it’s still locked in. It just goes into the back end. So the trade off in upselling and cross-selling is that you are adding another buying decision and additional buying friction to the initial purchase and you’re hoping that the increase in average order value makes up for the loss in conversion because of the new friction that you’ve introduced. This just like gives you both so you get to make the offer, but you’re not endangering the initial purchase at all. So it’s just gravy. And because it’s just gravy, I see it as an inevitable best practice. It’s going to be everywhere. It’s just a matter of time.

Jacob: Certainly from the consumer side of it. The part that I like much more is I have left a checkout before of when that pre offer is made of, Oh, you’re buying a yoga mat. Well, here’s these weights or yoga block or whatever. Would you be interested in those? First I’m like, I’m not really interested in working with you at all now. Like, I was here to buy one thing or whatever, and so maybe I ditch it versus after like, yes, adding it on that. It just kind of a different mindset and makes me feel a little different about the person buying from. That’s kind of the positive side I see from the consumer side to back up and ask a couple follow ups to everything you just laid out there. The first one being those pre-purchase ones. In the past, recommendations are almost always using some sort of recommendation, algorithm or tool. If a merchant wants to use this, are they going in and setting manual custom settings for if someone buys the yoga mat offer afterwards, are they able to use some sort of recommendation tool? A mixture of both. How does it work of deciding and who decides and how much setup there is to deciding what those post-purchase offers would be.

Jordan: So the setup is really easy. It’s just like click point and click, so there’s no development. Fired at all. I’ll tell you where we are now and where the product is going right now. The merchant decides on their own. So they’re implementing a strategy as they’re building out what we call post-purchase funnels so they can do something as granular as when this specific variant of this product is purchased, then show this specific offer. And then once they create the offer, there’s more manipulation that they can do there because it’s a rare version of actual scarcity online. Like you’re only going to see this here right now. And when you go beyond it, you won’t see this offer. So a lot of our merchants show prices in the post purchase that are not available publicly to make it a true one time offer that you’re only seeing right now. Or you can do something like when any time a product in this entire category is being purchased, then show this offer and people get creative. It’s amazing what a merchant does when they get this new canvas in their hands.

Jordan: They do free gifts. They do upsell into subscription, Right? So a buy a bag of coffee in the merchant can offer. If you subscribe, we’ll give you that first bag of coffee for free. Native deodorant that we used to work with started off by selling the travel size version of the deodorant. Right? You buy the men’s eucalyptus deodorant, then you get the $4 upsell into the travel size version that everybody wants. Then they get acquired by Procter and Gamble. And Procter and Gamble wants to introduce new product lines. Then the next time you bought a stick of deodorant, you would be offered a free tube of toothpaste to add to your order. And of course, everyone says yes. And Procter and Gamble just introduced a new product line to consumers that think of Native as a deodorant brand. So there’s a lot to be done there. So where we are right now is the merchant decides what happens in these funnels and the logic there. But where it’s going is recommendation engine looking at historical purchases and self optimizing over time. But we’re not there yet.

Jacob: Kind of getting to where modern current sales funnels are. Like you said, you’re adding basically a second sales funnel on the back end of the first one that you’ve already gotten someone to the end of. So lots of creativity can go into that. Is there a sweet spot, like if I’m a merchant thinking about this, I would assume if I sold someone something that cost $100 and then I offered them another $100 item, that that’s probably not going to make sense. They’re probably not going to be like, Yeah, let’s let’s double the price, Let’s add on. So I’d assume maybe there is some sort of sweet spot where maybe it’s like 5% of the first price or 20% or whatever. I would think there might be a bell curve. Am I correct about that? And is the data show kind of any sort of sweet spot of X percent of original purchase is kind of the right price point of the next thing to offer? Or is it kind of just creatively up to the funnel? Again, sometimes it’s free, sometimes subscription. Anything else.

Jordan: You’re on the right track there. The most important thing is for the merchant to be thoughtful and think, If I were a shopper, how would I feel about this offer? And you’re right, if you’re buying a $50 product, don’t upsell them into $150 kit. It’s incongruent. So one thing that works surprisingly well is the same product, which you wouldn’t think, but if I just bought this cooler to get the exact same cooler that I just went through, the decision process of, yes, this is the right cooler for me to offer the same thing at a slight discount. It works really well. Because they’ve basically already made up their mind that they want to buy it and now you’re getting another one for cheaper. And then they start to think, Oh, I’ll just get one for the summer house or I’ll get one for my brother in law or whatever’s on their mind. So that works. And the other thing that works is a significant drop down in price. If I just bought something for $75, if you offer me something that’s like 20 to 30% of that initial price, it feels very affordable and easy in a small decision. But more than anything, this should not be seen as an opportunity to take the shopper for as much money as possible. That mindset doesn’t work nearly as well as what would delight, what would make the customer love my brand even more so that it feels almost like a gift. Because you’re a customer now, you like cross the threshold into our favorite people in the world. How should we treat you? What should we offer you in this space that’s only available to people who just made purchases?

Jacob: Certainly, yeah. And you should, you know, hopefully every company out there, every merchant out there is thinking of our products. Our services should provide real value to the consumer, but even more, once they become one of those favorite people, once they’re an actual customer, reward them for that. Add even more value. Make sure you’re not just out here like we need to suck every dollar out of them immediately while we can, but show them, Hey, you’re now one of our favorite people. You’re in the family, you’re in the community. So offering something great. Well, I’m excited to see where that market goes and where some of the creative ways that merchants can use that. Let’s pivot one final time to kind of recent news items and some other trends within the industry. And the first one I’ll ask about is we mentioned Shopify a bunch earlier on in the conversation, So I’d love to get your opinion because I think it was just last week within the last couple of weeks, they did announce that shop pay would be available to enterprise retailers, not on Shopify. So finally, maybe seeing that this isn’t going to work long term to be put those walls up and be our own ecosystem and let no one out there in. Do you what are your kind of reactions to that announcements, I wonder, is that something you expected to happen or have been expecting that it would happen at some point? And how, if at all, does it change your thinking or the approach of what Rally’s trying to do?

Jordan: My general reaction is wait and see. But it’s really interesting. So it is something that we expected because it makes sense. One of the most difficult things to start and most difficult things to stop on the Internet are networks. And if you have a network, it’s unbelievably valuable. So Shopify did the right thing in building up their shop pay network by allowing shoppers to go through any Shopify checkout and then being added to a network across the entire platform. It only works with Shopify payments as the processor, but my guess is they’ll open that up as well. Anyway. They have a massive network of 100 million shoppers and that competes that like the PayPal level and that’s incredibly valuable. So it makes sense for them to let it float out beyond Shopify, but it tells you or at least creates a few questions. First, why are they doing it? Because Shop Pay was seen as a magnet that brought merchants to the Shopify platform and just as importantly, brought merchants to use Shopify payments as the processor. And that’s how if you look at look at the filings as a company, there are payments company now much more so than a software company. So why are they letting it float out? Is it an aggressive move or is it a defensive move? I can’t tell for sure.

Jordan: The next question that I think I’m most interested in is how do the other platforms react? Because if your Salesforce, Commerce Cloud, if you’re Adobe commerce, are you about to let Shopify walk in your front door and get access to all of your merchants and all of their shoppers, or are you going to stand in the way of that? So Rally is venture funded. We’ve raised money from investors and of course it’s the investor’s job to text me and say, what does this mean for us? So I think overall it creates a lot of opportunity for us because it creates new pressure and stress in the market. It is a reality that Shopify checkout is better than the default checkouts on BigCommerce Magento SAP. It’s just a fact. And that creates a problem for everyone in the market to deal with because merchants want a better checkout experience. So how those platforms react, who they look to partner with, who they invest in, who they acquire, all this is being impacted. And when Shopify lobs that out into the market, it creates new stress and therefore new opportunities. So I’m quite happy about it, but we’ll see.

Jacob: I’m glad to hear it was the expectation. In a weird way. I kind of thought that even though it adds stress and opportunity and it’s a competitor making a move that adds those things for you, but that in some way it is a bit of a win for companies like Rally and others of being like, Yeah, you guys put those walls up and because of what we’re doing out here, we basically prove to you that you need to start taking some of those walls down. So as much as it might add a bit of work on your side or really start the game. Is off in a big, big way. I would assume it kind of is looked at as a little bit of a win or a validation of everything you’re doing outside of those walls they had put up and what they were doing inside.

Jordan: That’s right. It just creates more for merchants to focus on and say, hey, we want to improve our checkout. And we talked about the train station analogy. If Shape becomes really popular for merchants outside of Shopify, then we will integrate with it as another track that goes through our train station. And in some ways there’s some irony there, of course, with my experience. But if you’re a merchant on Magento and you want shape, but you don’t want to go through the battle of integrating it yourself, you might look to rally the same way those merchants look to rally to get Apple Pay up and running very easily. So I’m very happy that I’m no longer in the Shopify ecosystem because when you were running a third party checkout on Shopify, every improvement the Shopify checkout made was bad for you. Now, in many ways, every improvement they make is good for us because it creates more pressure on attaining that level of a shopping experience that shoppers expect.

Jacob: Yeah, and that you’re already at. So to take your train station analogy a little further one more time here, I do love asking folks in your position, this next kind of question, you have like a unique vantage point as the one running that train station and knowing where people are choosing which track they’re choosing to go down. This podcast covers payments at large. We talked to lots of different payment processors and everything, but you have this unique vantage point of kind of seeing the trends within what types of payment methods consumers are wanting to use because you’re the one sending them down, any of those tracks. So from that vantage point, what are you seeing right now as kind of the fastest growing new payment methods? Is there anything standing out to you, whether it’s BNPL or anything like that, that you’re seeing as this isn’t just everyone’s writing about it like it’s trend like this is real. We’re seeing we’re sending people down those tracks more often than anywhere else. Any methods stick out to you.

Jordan: Want to answer that in two parts? The first part is that there aren’t any big surprises recently. The buy now pay later, boom already happened and now it’s being fragmented and in many ways commoditized. And there is a battle underway within those buy now pay later providers to differentiate so that it’s not fully commoditized. So there’s a difference between using a firm and Afterpay and Sezzle and and whatever else express payment methods are shoppers prefer. So when you get to a checkout these days, the first thing you should see at the top of your checkout is the express payment methods. The way I think about it is I’m from New York, so think of E-ZPass. So when you used to go through the Throgs Neck Bridge or whatever big toll, it used to be one E-ZPass lane and nine lanes of cash, and now it’s nine lanes of E-ZPass, right? And one cash. So that feels like it’s what’s happening on checkout, where I think the checkout of the future doesn’t show fields by default because so few people will want to go through the fields. It’ll just be an array of express payment methods. So that’s the preference. So as a merchant, that’s what you need to offer your shoppers and don’t jam it into the third step after they filled out all the fields. And then they can use an express train method because that defeats the purpose. That’s my part one.

Jacob: Let me pause you real quick, because I have one follow up to that part. To your analogies are really, really good. And I like then tried to expand on them as someone who just days ago drove all across New York and the entire Northeast and Midwest and used my easypay a lot. The other thing that has happened with those is it went from nine cash, one easypay to nine and one, but it also then went to some sites where you don’t even have to go through the station. You stay on the road and the little camera just like checks you, right? And so in my mind, that would be the next step would be not just showing all the express payments at checkout, but am I able to save a default as a consumer Like this is what I want to use. And if that is on offer at this checkout page, I don’t even have to see anything. I don’t even have to click anything. It knows this like I’m staying on the road, essentially. I don’t even have to go over onto the checkout. Is that the final frictionless station that we’re trying to get to?

Jordan: Yes. Okay. So there’s a problem with that, though, because I agree with you. I think of it as like just reaching out with my finger and just like being like, you can have my info for this purchase and I have my info saved on my side securely and privately. And I have decided to hand over to you the information that you need and nothing but that for this specific purchase. But that should require zero work. For me, the best analogy I can think of there is actually a crypto wallet where once you sign it’s just like click, there’s all my info. So that is where things are going. There is a problem though, in shopper behavior. If you do anything at checkout that doesn’t meet expectations, it’s bad for conversion. So right now, shoppers expect to get to a page, click a button, see a review screen hit, confirm. If you don’t give them what they expect, the brain will freak out and anything around friction at checkout is dangerous. So that part of it, the technology will move. Faster than the behavior online Makes sense.

Jacob: Sorry for the interruption, but great clarification. So then that part two of the previous.

Jordan: The part two that isn’t happening yet, but I think is inevitable is basically the war for 2.9%. Right? The war for interchange I don’t think survives the decade in its current form. It makes no sense that these lower cost payment methods are available, and yet we’re just stuck in this very strange monopolistic whirlwind that goes merchant uses credit card processor, credit card processor adds 2.9%. They charge the merchant, then they take money from the merchant and they bribe the shopper to continue the behavior happening again through rewards. That’s a beautiful spot if you’re a payment processor, but that doesn’t make sense. So I think over time, these new payment methods, whether it’s RTP, whether it’s ACH, whatever, these new developments around open banking that they’re going to start to chip away, especially if you have networks of shoppers like PayPal, Shop Pay, Apple, pay all these. As soon as those networks start to offer an alternative lower cost payment method, lower cost processing method, then you’ll get to where I want things to be, which is when a shopper gets to the checkout, they can see the difference. I can buy this for $100 with my credit card or I can buy this for $95 using this alternative, maybe ACH powered method, and then the merchant and the shopper can have a much more direct relationship with rewards instead of the credit card payment facilitators using that to their advantage.

Jacob: Yeah, having all that power, that middle man that is has gotten obtained a lot of power and created that feedback loop, like you said, of kind of trapping. Trapping might be too strong of a word, but maybe it’s not of kind of both sides in this little feedback loop that they’ve created That, yeah, is amazing for them. But when it’s a merchant and a consumer trying to do a transaction together, why is it so amazing for this other person that isn’t a part of that transaction?

Jordan: It made sense when you were a merchant on Main Street in Des Moines, Iowa, and you needed to be able to accept the same credit card that works at Target that like no longer exists. So I think that is a really interesting place where checkout is going to go and being the providers of the actual experience, we are directly involved in the incentivization of using the alternative payment methods that cost the merchant less. So if we can figure that out on how to make sure that the merchant and the shopper both benefit, that’s a tremendous opportunity.

Jacob: Yeah, very much so. All right. Well, the last thing I want to ask you about then, I’ve got one final question we’ve touched on. Ultimately, it’s the purchasing habits and the wants of the consumers that drive change. We’ve talked about a lot of that behavioral stuff. You wrote a really interesting article recently about Gen Z in e-commerce and how merchants can capture that generations attention because it’s very different than everything that’s come before all the generations that have come before. Can you give me a highlight or two from that article that you wrote, and what’s kind of new or different about how Gen Z wants to consume and where they want to be met?

Jordan: So they go through the Internet in a very different way than we do. And much of their activity is centered on social platforms, but that is also serving as the point of discovery for products. And as long as the merchant is asking that shopper, that potential customer to leave their environment, whether it is TikTok or Fortnite or anything else, where they are, they’re living, they’re hanging out, they’re seeing friends. That is where they socialize. If you’re asking that potential customer to leave, go to your store, add something to the cart, go to the checkout, write in all their information and hit buy so that they can then come all the way back to the experience that they were in the middle of. You’re going to lose them. So there has to be an effort made by the merchant to bring that experience all the way to where the potential customer already is. So we think of that as a hub and spoke approach to checkout. The hub is the checkout on your main store. That’s your domain, right? Jordanstore.com There’s a hub. There’s a check out there that people go through when they add things to the cart. But you need to have spokes. You need to be able to accept payment and route the orders all the way back to your order management system without requiring the shopper to go to your store. And so that’s the way we’ve built our checkout. And it is specifically for that use case so that the shopper can transact much, much closer to where they already exist on the Internet as opposed to you forcing them to change their behavior and stop what they’re doing and leave the environment that they’re already in. That is yet to be figured out at scale. So that’s something that we work. Toward because it’s a reality that all of us have to deal with.

Jacob: Yeah, continued transformation, continued change. It is definitely an industry that is not going to be static at any point in the near future, that is for sure. But that gives us plenty to talk about. And on this show and this conversation has been absolutely amazing. It’s been great having you here. Jordan For those listening who may want to follow you, learn more about Raleigh, keep up with all you and the company have going on. Where would be the best place for them to go to do so?

Jordan: So learn more about the product go to Getrally.com and to say hi to me. I’m @JordanGal on Twitter. I do a podcast every week about growing the business and figuring things out and making mistakes. That’s at BootstrappedWeb.com and on LinkedIn I’m in/Jordan Gal Yeah, feel free to come say hi, ask questions. Great to meet people.

Jacob: Love it. We will link to those in more in the show notes below. Jordan, thank you so much for your time and knowledge today. It’s been a real pleasure.

Jordan: Thanks very much.

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.