Join us in this insightful episode as we delve into the world of payment orchestration with Zubin Vandrevala, VP Commercial at Gr4vy.
Zubin shares his experiences and case studies, including a detailed look at how key merchants successfully integrated payments orchestration solutions.
This episode is packed with valuable insights for any merchant or business looking to understand the potential of payment orchestration in simplifying and optimizing their payment infrastructure.
Timestamps
00:00 Introduction to Payment Orchestration
01:42 Meet Zubin Vandrevala: Background and Experience
02:50 The Need for Payment Orchestration
05:59 Case Study
07:46 Complexity and Growth in Payment Systems
09:34 Build vs. Buy: Strategic Considerations
10:05 Merchant Profiles and Benefits
17:22 Addressing Common Objections
43:14 Industry Trends and Future Outlook
46:56 Practical Advice for Merchants
48:46 Conclusion and Final Thoughts
Transcript
Nikita: Today my guest is Zubin Vandervala, the Vice President of Gr4vy, one of the leading payment orchestration platforms.
In this episode, we talked about everything payment orchestration: what type of merchants benefit the most, where it is required, and where it may be less required. Should small merchants, when they just start accepting payments, start with payment orchestration platforms?
My favorite part of this episode was when we simulated the conversation between a customer and the vendor. I brought all the objections and hesitation, and Zubin provided context and explained the benefits of the payment orchestration platform. I hope you'll enjoy this conversation as much as I did. With this, please welcome Zubin Vandervala.
Nikita: Hi Zubin, and thank you for joining our podcast today.
Zubin: Thanks, Nikita, a pleasure to be here.
Nikita: Tell me about why most merchants today prefer payment orchestration or maybe even need payment orchestration to process payments efficiently.
Zubin: I want to acknowledge and thank you for giving me the opportunity to be on this forum. A little background about myself: I'm Zubin, I lead our global commercial team here at Gr4vy. I was the first business hire and have been here for the last four years. Prior to Gr4vy, I spent a little over seven years working in various capacities within Google's consumer payments organization. Before that, I spent about four years at Visa as Visa transitioned from 16-digit card numbers to digital tokens, and everything we know Visa for today.
I started my career in financial services, working at a bank, HSBC, doing credit card origination. Ironically, I have a mechanical engineering degree and spent the first couple of years working in the automotive industry. Somehow, that translated into a career in payments, but I'll save that story for another time.
Addressing your question: If you go back to the thesis of why Gr4vy was created, it really comes from this notion that businesses around the world are creating payments teams. It typically starts with wanting to start accepting payments. If you look at the innovation that has happened over the last 10 to 15 years, companies like Stripe, Adyen, Braintree, and others have made it really simple to start accepting payments.
With just 10 lines of code, you're off to the races. The growth we've seen in e-commerce over the last 10 to 15 years is directly attributed to innovation in this space. That's fantastic for an entrepreneur or small business looking to accept payments, but as a business grows, the complexity increases. You need redundancy, international support, local payment methods, and local acquiring. You need to manage risk. All of this complexity translates into APIs, and what started as 10 lines of code quickly becomes a spaghetti of APIs that a payment engineering team must manage.
That is the challenge that Gr4vy and other payment orchestration players are attempting to solve. How do you enable an infrastructure layer that helps you deploy, manage, customize, optimize, aka orchestrate your payments with ease? Hopefully, that gives you a little background on why orchestration exists in the market today.
Nikita: Can you share a story - your favorite case study or your favorite merchant - when they were struggling without payment orchestration and the results they saw with payment orchestration?
Zubin: This one's dear to my heart because it's one of the early adopters of Gr4vy technology. They eventually became an investor and are all in on the Gr4vy strategy. When I think back to the origins of Gr4vy, one of the key aspects was really talking to merchants and businesses to see if they would adopt our platform. Our founding members – John Lund, Ali, and Cristiano – spoke to a large number of companies. The resounding answer was yes from a technical perspective, but there were concerns.
The first concern was ensuring Gr4vy would not become a single point of failure. The second concern was how we would not add to the payment stack's complexity. What we've created at Gr4vy is a cloud-native company. For every customer that joins our platform, we deploy a dedicated instance of Gr4vy configured for the capabilities, performance, redundancy, and requirements tailored to that customer.
An early example is Woolworths Group, the largest retail group out of Australia. Think Walmart of Australia. They had an internal payments team with a cost center structure, but they strategically decided to spin out their payments team into a separate entity called WPay, around the same time Gr4vy was created. They realized they required an orchestration layer and conducted a build versus buy assessment, ultimately adopting Gr4vy all in.
One of the main values for them was the ability to decouple the front end from the back end, which made it easy for them, especially with consistent M&A activities. They are one of our top customers and investors in Gr4vy. This use case extends beyond just a merchant use case; it's also a PSP use case.
Nikita: When I'm thinking about payment orchestration, it feels like it's for bigger merchants. When a company is just starting, they sign a contract with a payment service provider and start working with them. As they grow, they face challenges of migration from a single provider to multiple providers, which can be smooth and easy for growing merchants.
Is that what you're seeing? How can smaller merchants avoid this transition? Would you recommend starting with an orchestration platform?
Zubin: A fantastic question. Our initial hypothesis was that larger businesses would have more complexity. But it's not necessarily size but the complexity of the business that defines whether you need orchestration. For instance, mid-sized merchants expanding internationally or managing multiple sub-brands start encountering complexity.
It's complexity in business operations that necessitates orchestration. So, should all small merchants start accepting orchestration? It comes down to how big the pain is or the pain you anticipate as you grow. On that pain basis, the cost of enabling an orchestration platform becomes worth it. We talked about this build versus buy decision; sometimes it's more pragmatic to build in-house. Understanding and doing a thorough build versus buy analysis is crucial.
Nikita: When you talk about complexity, let's delve into profiles. What merchant profiles benefit the most from payment orchestration? Is it merchants processing high volume, internationally, or needing specific payment methods?
Zubin: We definitely see segments within the market: single merchants expanding globally with multiple brands, or platforms with multiple sub-merchants. Aggregators like ISOs or PSPs also find value in orchestration. While it's often associated with large merchants, we've seen great use cases across various business types, including operating companies managing diverse use cases within their remit.
Nikita: You also mentioned the build versus buy discussion. Building an orchestration platform in-house almost necessarily involves going through PCI certification, which is a significant value proposition for many payment orchestration platforms. Has this changed, or is it still the main value proposition?
Zubin: Really good question. It depends on the incumbency and legacy of your platform. Large organizations with existing teams may choose to partner with a platform like Gr4vy rather than building in-house to amplify and accelerate growth and innovation.
On the payment stack in totality, orchestration players cover vaulting, tokenization, and pay-in. Yet, further downstream activities like enrollment, onboarding, settlement, reconciliation, and dispute management are areas needing more innovation. Merchants need to understand where they fit within this journey and the right combination of build versus buy to manage costs effectively.
Nikita: Is there anything else you want to add on values?
Zubin: Understanding the return on investment, or rather the reason for investment, is crucial. Gr4vy's value impacts four levels: revenue (driving more conversion, enabling new payment options), cost (optimizing payment costs), operating expenses (maintaining compliance like PCI), and strategic future-proofing. Having a clear picture of these impacts is essential for adopting orchestration.
Nikita: I collected some objections or hesitations from the market about payment orchestration platforms. Let's address them one by one.
Zubin: I'm excited! Ready for rapid fire.
Nikita: First, multi-processor orchestration requires merchants to sign new contracts with providers, managing operational tasks and negotiations, which can slow down adoption.
Zubin: Yes, traditional gateways consolidated multiple acquirers under one contract. However, Gr4vy focuses on technical aspects rather than contracting. We enable merchants to control relationships with multiple PSPs without needing extensive tech capabilities. We've seen benefits by creating layered connections with primary and backup PSPs to ensure redundancy and optimize performance.
Nikita: Second, adding an orchestration layer introduces another point of failure. Redundant systems already exist with top PSPs through high performance and stability.
Zubin: Excellent point. At Gr4vy, we provide multi-zone failover options, replicating traffic easily. We also deploy separate instances for merchants, ensuring code is verified before going live. This modular architecture enables redundancy and minimizes single points of failure.
Nikita: Third, with orchestration platforms, data control remains with the merchant. But some claim it leads to proprietary tokens, limiting flexibility similar to PSP-specific tokens.
Zubin: Great question. We allow merchants to choose, providing Gr4vy tokens or PSP tokens. Network tokens generated with merchant's token requester IDs ensure full control and portability across PSPs. The industry is moving towards flexible, controllable network tokens.
Nikita: Fourth, optimization and cost reduction are often highlighted, but is this only for high volume merchants?
Zubin: Optimizations need to outweigh the cost. Small merchants optimizing for specific needs like high-risk profiles or seeking low-cost PSPs with higher authorization rates may benefit significantly. A build versus buy analysis considering pain versus cost is crucial.
Nikita: Fifth, managing API integrations for critical business functions depends heavily on vendor support and prioritization.
Zubin: Absolutely, it's not just technical but a collaboration. We work with clients understanding their specific requirements, ensuring live traffic, and partnerships to address unhappy parts and manage updates effectively.
Nikita: Sixth, marketplace operations face challenges with pay-in/pay-out orchestration, requiring complex compliance handling not covered by orchestration platforms.
Zubin: Managing KYC, KYB compliance is a major challenge. While we support settlements and payouts, the broader compliance layer still requires innovation in KYC and risk management.
Nikita: Lastly, troubleshooting declines gets complicated with multiple parties involved. How does Gr4vy handle this?
Zubin: Providing transparent data and actionable insights is key. We're early in this journey but aim to offer self-service capabilities for merchants to diagnose and manage complexities directly, minimizing finger-pointing and resolving issues seamlessly.
Nikita: Thank you, Zubin. Let's switch gears and talk about the industry. Some vendors claim we're moving to a new era of open payments where merchants have more control. Do you see this happening?
Zubin: Yes, the trend of merchants seeking control and choosing best-in-class providers is evident. This unbundling trend means increased flexibility and orchestration players like Gr4vy are addressing this need.
Nikita: What's the biggest problem or blocker limiting payments industry improvements?
Zubin: The industry faces complexity due to global market exposure and varied consumer needs. Managing this complexity effectively and innovatively is the biggest challenge and opportunity.
Nikita: What's the most practical yet impactful advice you can give merchants for the biggest bang for their buck?
Zubin: Go back to basics. Understand your baseline metrics and prioritize low-hanging fruits based on resources and capabilities. Not every solution fits all; tailoring based on your specific business needs ensures the best outcomes.
Nikita: Thank you so much, Zubin. It's been an absolute pleasure. I hope our listeners enjoy this conversation as much as I did.
Zubin: Thank you, Nikita. I appreciate the opportunity to share this discussion with a broader audience.
Share this post