Customizable Payment Infrastructure Built for the Future with John Mitchell of Episode Six

Fintech Pioneer: John Mitchell’s Global Impact on Customizable Payment Innovation

John Mitchell, the CEO and Co-Founder of Episode Six (E6), stands at the forefront of the payments industry, having co-founded E6 with other pioneers in the field. Having started in payments in 1999, Mitchell continues to be a driving force in shaping the future of payment technologies and infrastructure. With a mission to revolutionize payment infrastructure, E6 provides tailored management services and develops advanced payment platform solutions for a diverse array of partners. Mitchell’s leadership at E6 reflects a commitment to innovation and tailored solutions, ensuring financial institutions can navigate the complexities of the ever-evolving payment landscape.

Before embarking on the journey with E6, Mitchell served as the Chief Executive Officer of Rêv Worldwide, a company specializing in end-to-end payment solutions for global partners. During his tenure, Mitchell played a pivotal role in building Rêv’s global business and operating platform. Notably, he spearheaded the development of the world’s first multicurrency travel prepaid loyalty products, showcasing his vision for cutting-edge solutions in the payments space.

Prior to Rêv, Mitchell spent seven impactful years at NetSpend Corporation, where he orchestrated a strategic shift towards serving underbanked Americans. His leadership led to the establishment of the largest sales and distribution network in prepaid payments. Mitchell’s transformative role in shaping NetSpend’s strategy highlights his dedication to addressing the financial needs of diverse consumer segments.

Episode Transcript

John Mitchell: And so we came up with this idea to provide essentially a sidecar that FIS can use to make sure that they can offer current products and meet market demand while layering more and more on top of the new technology over time, which extends the lifetimes of their existing platforms. But it also provides a more palatable roadmap for these FIS to move off or to make changes. Because there’s a long road ahead for most of these banks to do something like that.

Jacob Hollabaugh: 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 continued modernization of payment products, how and why banks and SMBs alike should be building things that their customers and clients actually want and will use, and a whole bunch more from the world of payments technology. I’m very pleased to be joined today to dive into this world of payments tech with an expert in the field. I’ve got John Mitchell with me, co-founder and CEO of Episode Six, the payment technology company trusted by banks, delivered by experts, helping you and your business grow by modernizing your payment infrastructure. John, welcome to the show. Thank you so much for joining me today.

John Mitchell: Thank you. Jacob, it’s a pleasure to be here.

Jacob Hollabaugh: Yes, the pleasure is mine. Let’s go back in time to start things off, John, if you will take me back to 2015 and really the years leading up to 2015, what were you doing prior to Episode Six and then what was it around that time that you saw in the payments world that led to the idea and initially the founding of Episode Six.

John Mitchell: Going back to 2015, Futeh and I had worked together since 2000 ish. Charmaine, we met along the way in 2011, and so we spent a lot of time in the payment space. We built a prepaid processor program manager called Netspend in early 2000, and in its heyday, it was the largest of its type of business in the world by volume. Then we went overseas and we built these FX and multi-wallet platforms. But wherever we went, we were selling a product and we came to a realization that the market’s changing and the space is changing, technology is changing, consumer demand is changing and we need something new. And so we came together in 2015 and we decided that why don’t we start from scratch? And why don’t we create something that will allow our clients to build what they want without having to customize, without having to have multiple versions all over the place? We have one single code base that’s distributed across 12 AWS regions, for example. These are little subtleties that haven’t really been done before, but why don’t we create something so our clients can build something that their customers will love, instead of just offering sort of the same product and service? That’s what we saw, and that’s what we did. And we came together in 2015, and we were sitting on my porch in Austin, Texas, and we decided to put this together and haven’t looked back.

Jacob Hollabaugh: Makes sense. I have to ask. I’m just very curious about naming for some reason in general, where does the name itself Episode Six come from?

John Mitchell: The funny thing is, we were sitting on my balcony in Austin, Texas, trying to figure out what do we call this thing? And we were just talking about sort of our past and future. And I had worked together since 2000ish. Charmaine had joined us in around 2011. We worked together in multiple companies, and multiple initiatives, and we just thought, this is the sixth time that we’ve done something, so hopefully it’s the last time we call it Episode Six. At that time, Episode Six had a there was another meeting that could be pulled out of it related to cinema,in some parts of the world, we folks are curious if that relates to Star Wars or not. But essentially this is our sixth go around and yeah, Episode Six. Now we’re known as E6 a little bit more now. But yeah.

Jacob Hollabaugh: Yeah, I love that. I’m just really into naming and branding, so had to ask. So it’s been eight years now since that founding. Congrats on that. Fingers crossed for you that this is the last episode for the three of you, and goes on to continued success long into the future. In those first eight years, though, before we talk about the present and future, the last thing I want to ask about the past is you were at the forefront. You saw what had been happening and decided, let’s get ahead of this and let’s be the company for the future. In these eight years, has there been anything that has surprised you or that has changed dramatically about the market that you didn’t maybe, either, see coming, either, maybe an advance, but that happened sooner or even later than you thought it would, or any dramatic change or obstacle the industry’s thrown your way that you’ve had to overcome in these first eight years that wasn’t part of the initial roadmap or idea or plan?

John Mitchell: I don’t think so. We have stayed true to the mission that we set out upon in 2015. What we have seen is because of the pandemic, we’ve seen just a massive acceleration and adoption of contactless, where the QR code base or other. And you know that I think there was really a step change, and we’d seen a lot of the things in Asia already exist that came to the US in Europe during the pandemic. And so there was an acceleration that happened. When we started, folks were talking about API then cloud then blockchain, and now AI. But really the fundamental idea of having to have access to one’s funds through some sort of payment method and to be able to use that seamlessly and securely anywhere that one wants to hasn’t changed.

Jacob Hollabaugh: Yeah, the goal is still the same. The just path to get to that goal continues to evolve. We’ve talked about it a little bit. Then can you give the kind of quick, high-level overview of who E6 is today, the services that you offer and who you most commonly work with?

John Mitchell: Sure. Episode Six provides infrastructure for payments that could be accessed as a service. In some cases, we license the system and our clients might take it into their environments and their tech stack. And essentially, we provide a mechanism for our clients to utilize a virtual account layer and then debit or credit these accounts through payment rails, whether it’s ISO 20,022 for various real-time payment methods, or ISO 8583 for Mastercard and Visa, and so on. The issue on the processing side, there’s a full array of credit, debit, and prepaid. And then on the virtual account side, we see a lot of more closed-loop ideas that are being implemented. And really, this layer allows older systems to be able to be accessed in a digital fashion through our API, which allows for this sort of progressive modernization strategy that we’re implementing all over the world. Our clients typically are financial institutions or large brands that have some sort of payment initiative. And that really was what we set out to the segments that we set out to attack in on day one, and it hasn’t really changed much either. What we have seen within this marketplace, though, is the realization that something needs to change around infrastructure that’s been there for some time, but more and more of our prospects are acting on it. And so the market is we think it’s continual for a long time as financial institutions switch out their their technology, which historically and traditionally is dated.

Jacob Hollabaugh: Certainly, so. It’s referenced a lot on this show of just we’re working with one of the oldest industries that there is, and a lot of companies that are some of the oldest companies and institutions that we have that are still trying to find their way into modernizing and not being replaced. Which leads me, you mentioned in there your system is built to help them essentially bridge that gap of some of those legacy systems, which we’ve seen, I’ve seen over the course of this year and all the conversations on this show, the two different mindsets of let’s just replace all that stuff versus let’s help those people modernize and come into the world. So did you ever have to ask yourselves that question, or with your product offering or are we trying to give them a way to update their systems, or was there ever a thought in the beginning of like, what if we just came in with the new system and try to, you know, beat them out Essentially?

John Mitchell: I think that we were pretty aware, self-aware that a company with at that time, six people probably wasn’t going to provide enterprise-class software to a tier-one bank that would have to spend hundreds of millions of dollars to dig out their. Now, not everyone has that realization. We did. And so we came up with this idea to provide essentially a sidecar that Ifis can use to make sure that they can offer current products and meet market demand while layering more and more on top of the new technology over time, which extends the lifetimes of their existing platforms. But it also provides a more portable roadmap for these FIS to move off or to make changes. Because there’s a long road ahead for most of these banks to do something like that.

Jacob Hollabaugh: Yeah, and being able to, I would assume the kind of thought process and maybe one of the questions I’d want to ask you and love asking FIS is this is a crowded market, so I like to ask how you differentiate yourself with a lot of companies offering similar types of services. And I’d imagine maybe I’m wrong, you can tell me. But one of the ways is what you just referenced of your service is this tech platform instead of specific services. Here’s the service we offer. You can integrate it. You let them build the products that they want, that their customers would want, and then allow them to be able to continuously do that because this market’s ever-changing, ever-evolving. So what might they might need today? There’s a good chance six months a year from now they might need something brand new. And you’re allowing them to continually build new things or incorporate new things. Is that one of the kind of main draws of how you differentiate yourself, or am I maybe off base on that to begin with? And then also some other ways to differentiate. What do you think about all of that?

John Mitchell: I think that’s very well said. So after the podcast, if you have any time to consult, let me know.

Jacob Hollabaugh: I don’t know if you need that, but I’m glad I’m not always very right on my ideas and theories, so I’m glad I was. At least that was.

John Mitchell: Actually, that’s actually perfect. I think that’s a key differentiator. We’re providing infrastructure. We’re providing software so that our clients can use this to create products and services. We have got a transition as a company so that we can productize and move from providing solutions. We had a product launch at Sibos a couple of months ago in Toronto. It’s called Business Now, “Pay Later.” And essentially it gives FIS, a mechanism within their existing tech stacks to offer up lending or installments or BNPL, whatever you want to call it, to middle-sized businesses. And these middle-sized businesses are looking to extend their working capital, and their cash flow, and so allowing a relatively simple method to split bill payments. And the bank can receive the revenue from the lending, which is what. They’re cut out to do and their business accounts extend their working capital. There’s just really this win situation and our system allows for that. And so that’s something that we would not have thought of several years ago. But then with the kind of rise of BNPL, a lot of transactions of revenue are taken away from these FIS because they’re taken away at the POS. So we provide a mechanism for them to take it back.

Jacob Hollabaugh: Yeah. That kind of leads me to that trend, or the idea of that trend of something growing into the larger space for fees versus just at the consumer level, something I wanted to ask you about, which was I was reading a recent blog post on your site that was about lessons wholesale banks could learn from retail banks, and it seemed like a wholesale bank operating more like a retail bank would be in line with this sort of industry trend of new payment solutions and tech starting small consumer level, possibly where it’s tested in the bigger B2C market and then brought over in time and brought into the larger FIS and ultimately maybe into the B2B world. Do you agree that is an overarching trend, not just in this one way with your business now pay later, but an industry-wide trend in how do you see that kind of continuing or playing out within the market?

John Mitchell: I think for us, the commercial side has always been very attractive in the retail world and gets a lot of, I think, a lot more publicity. There’s a lot of style over substance, and I think that there’s less of that, on the commercial side. And I think that the opportunity on the commercial side is larger for us anyway. But fundamentally the issues that they face are quite similar. And that’s that you have these rigid systems that are hard to change and they’re hard to adjust. Whether we’re talking about opening up an account or relating accounts to each other, or adding some sort of new rule or fee or report, it just it’s hard. It takes time. And historically, institutions have layered on additional software that might not really have been thought of as a pair. When they first came out. They might have been created for requirements that no longer are relevant. And then it happens over and over and over. So there’s just such a massive amount of an IT budget that goes to maintenance and support that could be reduced dramatically, with the insertion of tech like ours. So the roadmap is similar. Here’s a platform, put some stuff on it, check it out, and then advance. And that’s what we’re preaching. And it’s working very well certainly.

Jacob Hollabaugh: And it seems another payments market trend would be somewhat related to that. Be slowly but surely cutting out more of the middlemen or a little bit to use different words from what you just said. But we’ve built this really complex web with a lot of stuff that maybe doesn’t need to be there in the middle anymore. So there was a suggestion in that same blog about wholesale banks being best suited to close the credit gap for SMEs by offering it directly themselves, and that essentially removes a bunch of that middle. All those middle players and all those middle systems. Is that a more direct approach, kind of cutting out some of the middlemen or cutting out some of the middle systems approach with a lot of the products you offer? Is that one of the goals to simplify the systems as much as possible, too?

John Mitchell: We believe that simplicity is important and that on a lot of occasions, the middle products or middle solutions fill gaps that might not have to be there if things are restructured. And so when I look at various initiatives around the world and we work on four continents, we see a lot of overengineering and a lot of complexities that don’t need to be there. And we solve that. And so, yes, I absolutely believe that simplicity will allow for a lot more capability. And that’s what we preach around here, whether it’s from our engineers or constantly refactoring and abstracting out difficult code that slows down a system to just our approach to go to market.

Jacob Hollabaugh: Yeah, and that’s a lot of those systems needed to be there at one point. Maybe don’t now, but then it also to a point of kind of overengineering, there’s a lot of jobs that exist that people are trying to earn their keep. And so why not add to keep your place within the system?

John Mitchell: We provide a framework in that case, and we can help people and help employees build new stuff and create a need for those types of roles. So we try to work with our clients from that perspective.

Jacob Hollabaugh: Absolutely. To take it back to one of the first things you actually mentioned, which I was really glad to hear longer ago in your career that you referenced was. So I was reading another one of your company’s blog posts from the recent Money 2020 in Vegas, and kind of some takeaways from that big conference, and one of the ones that really stood out to me that I haven’t had a lot of time to explore on this podcast, was unlocking the possibilities of multi-currency. And it sounded like, I think you referenced in one of the former stops, one of the earlier episodes for you and your co-founders, there was a multi-currency element to what you were doing. How big of an unlock do you see multi-currency being for the B2B world, especially when essentially, eventually that becomes the norm and it’s very easily and seamlessly integrated into everything you do? Is that? A big unlock for the B2B world in your mind.

John Mitchell: There are multiple applications. The playbook is still being written. There are ideas around stablecoins to unlock, some of that. Our system is more about converting value units when you move from one account to another. A value unit could be a USD, could be JP, could be points cash back rewards. Digital doesn’t matter. We treat it the same within the platform. And so that presents a lot of opportunities for us and for our clients to offer just really innovative types of products, whether it’s consumer or commercial. I think unlocking the ethics, it’s more about simplifying ethics transfers so that there are fewer people touching it, which increases the margin. Our platform can help with that.

Jacob Hollabaugh: Certainly taking it back a couple of steps here. So with your platform and helping all of these brands in FIS Institute, create the payment technology that works best for them or suits their customers gives you an interesting vantage point of getting to then see what are the products that they’re ultimately making, what are the kind of hottest products with across the commercial industry? So I always love to ask someone in your position who has a little bit of that bird’s eye view, what are you seeing being used the most? Being asked for help with the most, using your platform to build the most right now. What are the hottest payment types essentially within the market that you’re seeing from your point of view?

John Mitchell: For us on the commercial side, virtual payments and B2B payments are a big idea. That’s not a new idea, but systems that are managing these types of payments are not new either. So we see a lot of opportunity around simplifying those payment processes. On the retail side, I think the FIS has been patient. I think fintechs came in and created a lot of new products and ideas and some really interesting stuff. But ultimately, banks are regulated and compliant and built to offer a lot of this as well. And I think they’re starting to put down the plans so that they can match and even surpass some of the ideas that we saw evolve over the last 5 or 6 years. I mentioned Bnpl earlier and Bnpl, there’s a huge demand for BNPL with our platform. Every single payment card could allow a customer to split payments at the point of sale or before or after, and so essentially the financial institution can keep all of those transactions and all of that revenue. I think that’s coming. I think we provide a path for banks to be able to implement these types of programs quite easily once the system is stood up, configurable credit with many more features and robustness integrated into the actual product, versus having these third parties that are all connected through some sort of piecemeal method is a big idea, but I don’t think we’ve seen a big idea yet. And because of that, I don’t think we know if tech is going to be able to enable these big ideas. And that’s why we built our system so we can augment the behavior. And we do it all the time, and it just keeps it fresh so that when things change, when something else comes out, we’re ready to go.

Jacob Hollabaugh: Yeah, certainly a powerful position to be in. And on the note about the BNPL on the consumer side kind of being the highest, I’m definitely fascinated to see we’re entering we’re in the holiday season full-fledged and the holiday season right now I feel like as I’ve started to do my holiday shopping, this is the first year where every single place I go to shop, offers a BNPL product, and I’m going to be very interested to see reports coming out of the holiday season at the amount that is being used, and I envision a bit of a tidal wave of BNPL had its moment as far in the payments world. But on the consumer side, really, maybe this holiday season is being the breaking point of like, oh, look how whatever percentage, if we’re able to figure out of holiday spending, ended up being of that variety versus the upfront cost. So definitely intrigued by that. The final two questions I have for you, John, some say these are the easiest questions I ask. Some say they are the hardest. So we’ll see what your opinion is. The first one is what is your favorite part about working in the payments world?

John Mitchell: I love what we have put together. I love the space, but I really enjoy traveling somewhere and seeing a sign. I’ve seen us in Hong Kong. I saw a train wrap or product that rests on Episode Six, and so just there’s a sense of accomplishment there. And it feels great. I really enjoy that. I’ve been doing it for a long time, so we can see the results of our work all over the world now.

Jacob Hollabaugh: Love that. And then last one, what are you most excited about in the next 12 months for yourself? For the market for E6? What’s got you most excited looking ahead to that? As we are close to, don’t I ask this all the time, but you know, we’re actually getting close to the end of the year. So for the year 20, for the next 12 months, what gets you the most excited?

John Mitchell: 22 and 23 have been an interesting time for our space. What I’m excited about. 24 is a steadier year without pandemics and wars and bank failures and interest rate hikes.

Jacob Hollabaugh: That’d be nice.

John Mitchell: Yeah. So we can continue to provide mechanisms for our clients to innovate. Our objective for 24 is to become a go-to provider for FIS to ask for us by name all over the world, and we’re on our way to doing that. So I’m super excited about that. I’m super excited about the company that we built and being able to work with all of these great people here at Episode Six. And so the future looks bright, and I’m looking forward to just a fantastic 24.

Jacob Hollabaugh: Love it. Well, John, this has been a real pleasure for those listening who may want to follow you or learn more about Episode Six, keep up with everything you and the company have going on. Where would be the best place for them to go to do so?

John Mitchell: episodesix.com. I’ll Spell that. episodesix.com.

Jacob Hollabaugh: Awesome. We will link to them in LinkedIn and everywhere else in the show notes below. John, thank you so much for your time and knowledge today. I’ve greatly enjoyed it and hope to speak to you again sometime soon.

John Mitchell: Yes, sure. Thanks, Jacob.

Jacob Hollabaugh: 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 soarpay.com/podcast.