Why real-time payments still leave gaps for consumers, with Keith Smith.

In the latest episode of Digital Banking Podcast, host Josh DeTar, Vice President of Sales at Tyfone, welcomed Keith Smith, Founder and CEO at Payouts Network. The episode centered around the changing landscape of money movement, the need for real-time payments, and how consumer expectations push financial institutions to rethink both technology and user experience.

Keith shared his views on why traditional ideas of work-life balance fall short and how personal definitions of success shape both leadership and culture. He described how blending work and life is often necessary, especially when building companies and leading teams. He and Josh discussed how the pandemic blurred the lines between home and work, highlighting the importance of transparency, empathy, and open communication.

The conversation then explored why money movement is still full of friction despite recent advances. Keith explained how business-to-consumer payments, especially in non-obvious scenarios like reimbursements and insurance payouts, lag behind consumer experiences. He argued that while new technologies like FedNow bring faster options, the real challenge is delivering secure, flexible solutions without overwhelming users with choice. Throughout, Keith made it clear: real innovation in payments comes down to simplicity, speed, and meeting people where they are.

Transcript

[00:00:00] Keith Smith: you go to a restaurant that has a hundred things on the menu, or a very complex menu that I don't wanna go to that restaurant.

[00:00:06] Keith Smith: I'd rather go to the restaurant that has 12 things on the menu, right? Because I know it's a burger joint or it's a steak restaurant, and trying to be everything sometimes is too many choices, too confusing,

[00:00:15] Keith Smith: bad experience.

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[00:00:46] On our podcast, you'll hear host Josh DeTar, discuss today's most pressing financial technology topics with seasoned industry experts from every possible discipline.

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[00:01:54] Josh DeTar: Welcome to another episode of the Digital Banking Podcast. My guest today is Keith Smith, the founder and CEO of Payouts network. Now, my only regret in having Keith on the podcast today is that we didn't just hit record on our first ever conversation. It was a whole podcast in and of itself. And ever since that meeting, I've been really excited to have Keith on the show. he said something to me that really stuck with me, and I think it's super applicable to his introduction. What he said was, what are you gonna get outta the time that you invest? Time is like a currency. we trade it for, our time for any number of things. We also have to define our own definition of success for everything we do in life. So when you combine those two thought processes, how will you define success in dedicating the next hour plus to listening to Keith and I talk. Keith, like many of the founders I've had on as guests over the years, has a really, truly incredible set of stories and events that have led him to where he is today. And I think there's a lot that we can learn and take away from his experiences and his thoughtful way of communicating those experiences through stories. So everything from watching his dad and learning that hard work, passion and dedication, and what that looks like through osmosis to wanting to contribute and starting to deliver papers on his own.

[00:03:27] Josh DeTar: At 12, Keith learned that the quality of work you do and the notion that your word is your bond is how people will view you. And especially growing up in a small town, that reputation meant everything. Now, as a father and a leader himself, he's always looking for ways to strike balance in life, to do good, make an impact, innovate, and solve problems. At the same time be present in the moments that really matter with the people that really matter. So today we're gonna explore everything from the accountability of your personal brand to the seesaw of life that is balancing personal and professional worlds to how evolutions and innovations in money movement here in the US have both solved challenges but also exposed new opportunities.

[00:04:16] Josh DeTar: So Keith, welcome to the show. 

[00:04:19] Keith Smith: Thanks, Josh. Glad to be here. 

[00:04:21] Josh DeTar: Yeah, me too. Like I said,

[00:04:23] Josh DeTar: I was really bummed that we didn't just hit record the first time we talked. 'cause it was everything from we had never met, had never talked before, and all of a sudden we're like, man, we're not six degrees of separation apart. We're like 0.2. Like how would we have not run into each other already is almost

[00:04:40] Josh DeTar: shocking. 

[00:04:43] Keith Smith: Yeah. Amazing. 

[00:04:44] Josh DeTar: It's a small world, but

[00:04:45] Josh DeTar: sometimes maybe not small enough. So it's cool that we get to, to meet and chat and learn about people through stuff like this.

[00:04:53] Keith Smith: Yeah, 

[00:04:53] Keith Smith: nothing like the first 30 minute call 

[00:04:55] Keith Smith: going for an hour and a

[00:04:56] Josh DeTar: Yeah, I know. I luck. I think we both lucked out. We, for some crazy reason, had open calendars that day because we just went on a roll and before I realized, I was like, oh,

[00:05:06] Josh DeTar: I gotta run. 

[00:05:08] Keith Smith: Yeah. 

[00:05:09] Josh DeTar: And I think that's gonna be a lot of today too.

[00:05:11] Josh DeTar: folks buckle up. Keith, you were talking to me, today before we started recording about something that I want to pivot and just, and start with, and this is a little bit of a selfish conversation because I'm gonna be honest with you.

[00:05:25] Josh DeTar: I feel like I've reached that point in my life, both personally and professionally, where I've been trying to figure this one out. And I'm very thankful to have had some really cool mentors, past guests on the podcasts and people that have really helped me navigate this journey. But I thought you had a really interesting perspective that I think folks would appreciate talking through. And that's this whole notion that there's really no such thing as work-life balance. There's just life and you gotta figure out, what's your definition of success? And you likened it to, in your words, there's no such thing as balance.

[00:06:02] Josh DeTar: There's the teeter-totter and sometimes you're just too heavy on one side and you make it up by being too heavy on the other side the next time around. So how have you navigated this as you've gone through life and started companies and family and all of those things?

[00:06:19] Keith Smith: Yeah, I, I think Josh, it's, it is, I do think it's part of the center of life, right? Is trying to keep this seesaw, or teeter-totter, as balanced as you can, and realizing that you're never gonna be completely balanced, right? There's always gonna be a give and a take, and I think that, for me, in my career.

[00:06:42] Keith Smith: early on, you've got this quest to, to go build your career and create a certain lifestyle and what are you gonna sacrifice to be able to do that. And then on the other side, you want a family. You want to be able to go enjoy life and you all your hard work and what's the benefit of it?

[00:07:00] Keith Smith: And I think that it's not starts and stops. it's really bumps along the way that kind of

[00:07:06] Keith Smith: forces you to start balancing back out the seesaw when you get a little too heavy on one side or the other. But I think that, understanding to begin with, I, there is no achievement of complete balance in, in my life, right?

[00:07:22] Keith Smith: It's always a quest that I have to make sure I try to stay as balanced or I'm intentionally unbalanced, And being able to have that perspective and understanding where you are. and there's a lot of factors that go into that, right? And personal drive people. You surround yourself with opportunities that life puts in front of you.

[00:07:45] Keith Smith: and maybe it's as important to say no to certain things, more important to what you said no to versus what you said yes to.

[00:07:53] Keith Smith: in order to keep that balance.

[00:07:55] Josh DeTar: Yeah. No, I appreciate that perspective. And that's some, my wife and I are in that season. Like I said, we have a four and a half year old and a 2-year-old now, and a. we went through that season of both her and I were very career focused. It was really easy to be selfish.

[00:08:11] Josh DeTar: I just focus on that. There was, I guess less, it was more of a teeter-totter back then of how many things you had to balance, and now it's like one of those Labyrinth games and there's there's way more directions that you have to be thinking about at once, and it's a lot harder to be in quote unquote balance, I think, than it ever was. And I feel like kinda what you were talking about, that's something that's helped me a lot, over the last little bit and even very recently, is figuring out, I almost have to intentionally just control the unbalanced and be like, Hey, I'm totally checked out a family right now and I have to get this work stuff done. but it's because then I'll use that to flip it and I'll completely check out from work and do this. Or even just, Hey, this is gonna be work plus family and I'm going on a work trip, but you guys are coming too, so I can at least see you and trying to find all those different ways. But I agree that I don't think it's as simple as just, oh, it's 50 50.

[00:09:13] Keith Smith: That's right. Yeah. Eight hours work, eight hours family, eight hours sleep. This doesn't, a third and third doesn't work. And and I think, when you, Josh, when you look at, careers, and I was fortunate at a young age to have opportunities to go run some really cool companies before I started building them.

[00:09:31] Keith Smith: And when you're young, and you get these opportunities and you've got these challenges in front of you and you're hitting and meeting these milestones and you're growing companies, you're creating profit. but at what expense? And knowing, what, and I think just having perspective, on that and knowing that you are, burning some assets on one side.

[00:09:52] Keith Smith: You're playing some, cashing in some chips on one side so you can maximize 'em on the other, but you gotta go back and try to replenish that.

[00:09:59] Keith Smith: But knowing it's never 

[00:10:00] Keith Smith: gonna be 50 50,

[00:10:02] Josh DeTar: Yeah, I was telling you about 

[00:10:03] Josh DeTar: my, my oldest, my son,

[00:10:05] Josh DeTar: who's four and a half is I, it's both a really proud moment and a little terrifying at the same time when my four and a half year old is teaching me like deep life lessons. But, so when he turned four, so he's been into cars since he was a little baby. and he's had, one of those power wheels since he was like two and just completely outgrown the thing. He's just, jumping it off a cliffs in the field and just beat the thing Smith rain. So his, for his fourth birthday, I upgraded him and got him this like little, electric UTV. And, and then since then we've been modifying it heavily.

[00:10:52] Josh DeTar: This thing has snowballed. Keith, like I, I'd be embarrassed to show you pictures at this point, but he's also obsessed with the monster Jam, monster trucks, and so we've turned it into Grave Digger, the like OG Monster truck. this thing runs on like a full lithium ion golf cart battery now and does 25 miles an hour. And it's, it, like I said, it's devolved pretty seriously at this point. But so the other day I'm getting ready to go on another work trip and my four and a half year old was like, dad, I'm really sad that you have to leave. And I was like, me too buddy. And he's I'm gonna miss you. And I was like, I'm gonna miss you too. And he goes, but it's okay. I understand that's how you work and you provide for us, and that's how I can have Grave Digger. And I was like, oh. I'm like, yeah, you're not wrong, buddy. And so 

[00:11:44] Keith Smith: Hello, Jack. 

[00:11:45] Josh DeTar: it made me think of that moment

[00:11:46] Josh DeTar: very recently of, it was cool that my four and a half year old picked up on that.

[00:11:51] Josh DeTar: But I think sometimes we even forget about that, that is a part of that balance. It's I want, I wanna be super present for him. I want him to be able to have these core memories that are really positive. I want him to remember. growing up and that his dad was present and that I was there and that he had a relationship with me and that, I prioritized him. But to do a lot of those things, I have to go to work. That's just the fact of the matter.

[00:12:16] Keith Smith: Yeah. Yep. Yeah, that, that'll pay dividends, right? acknowledging at that 

[00:12:22] Keith Smith: age and it'll help keep you balanced. 

[00:12:25] Josh DeTar: Yeah. But at the same time, it's hard. 'cause then I'm like, now I really don't want to go on the work trip now. I don't want to hang out with you, 

[00:12:31] Keith Smith: Work. Gotta go work harder. 'cause I need to buy a bigger monster 

[00:12:34] Josh DeTar: Yeah. now I need one to drive with him, obviously.

[00:12:37] Keith Smith: That's right. That's right. 

[00:12:39] Josh DeTar: Now, but

[00:12:39] Josh DeTar: as you went through the stages of, 'cause you were building companies even at the same time as having kind of young kids, so what was that like?

[00:12:49] Keith Smith: I think that, very much like my father did with me, I knew what he did and I was exposed to what he did and I saw the impact that he made. And I would say for me, I tried to make sure my kids always knew what I did for a living and I tried to put it in some perspective that they could understand.

[00:13:10] Keith Smith: And being in the payments world my whole career, it was always you easy, you go to the point of sale, you kinda explain, but they don't really fully understand at a young age. But what they did understand was you were working hard every day there's people around that they were exposed to.

[00:13:25] Keith Smith: 'cause they got to meet. as we were building companies, they're young kids. They're coming by the office, they're meeting, the employees. The employees are meeting them, and, and I think that was important, and it paid dividends in their lives today. 'cause they got exposed to strangers that became not strangers.

[00:13:44] Keith Smith: They became people they knew at a different level, a group of adults and how to interact or to at least look somebody in the eye and speak to 'em, and shake their hand, at the beginning. But helping them understand, and then to your point, I've gotta go to work. I've gotta go out of town.

[00:14:01] Keith Smith: I've gotta go do this. we can have these things in life, or we can do these things in life. And, and so that they could, see, I think one, the hard work and how it pays off, or why you do it, but then. I think the other part was, I was really big on helping my kids understand that somebody's gotta create jobs, somebody's gotta create these companies.

[00:14:26] Keith Smith: Somebody's gotta go help other people succeed or, and or give them the opportunity to succeed. And, and then help them understand too. I think Josh, that getting the opportunity is just the beginning. Maximizing and taking advantage of the opportunities that are given to you in life is really the key, to success.

[00:14:49] Keith Smith: And it's not always monetary, right? And so it's personal. Your relationships, it's value back to your family. It's, those opportunities even when you can take your family on a trip, a business trip, and spend time with them, right? So you can have that balance. But they see that, there's not a

[00:15:07] Keith Smith: clear division between work and 

[00:15:09] Keith Smith: family.

[00:15:10] Josh DeTar: Yeah. Yeah. I think that's going back to what you were saying earlier too, like everybody has to have their own definition of success, right? So just because this is mine doesn't mean it's everybody's, but I find for me personally, that's been something that's helped a lot too. Is, my, my wife and kids are like deeply rooted in the company. my, my wife bakes sourdough for our, different team members and people know and see my kids around and, and vice versa. And I think it's because, to your point, like there are just so many times, last night I was on a work call at, 7:00 PM which should have been family time. It was also, I hadn't been able to get to my workout for the day. So I was in the gym and I've got my son hanging out in the gym. I'm trying to work out and I'm on a work call all at the same time, And it's I just, I've gotten more and more unabashed about. Just not caring. I don't want it to sound like not caring, but that's just life.

[00:16:15] Josh DeTar: That's a part of my life. And I want to be able to be present and help our team members on a 7:00 PM call, and that's really important to help support them and not ask people to do things I wouldn't do myself. But at the same time, that was cutting into to time for other things. So it just all blended together.

[00:16:31] Josh DeTar: It just was what it was. And I've just gotten, I guess unashamed maybe

[00:16:35] Josh DeTar: of,our life just blends, and sometimes that means that, I'm on a call with a customer and Annie, my daughter just comes bursting through my office, which she does and demands a hug. And she never does that.

[00:16:47] Josh DeTar: And so when she does, I'm taking full advantage of it, and that's just life. I don't know.

[00:16:53] Keith Smith: Yeah, It, I think also, building companies and leading people, they got the same challenge, right? And so just knowing that, I think that, trying to set an example, everybody wants to do that, right? Be a good example to others, around them and just living it.

[00:17:12] Keith Smith: It's not easy, right? But you, but I think it becomes easier when you have a culture that, that people understand. We all face the same challenge, most of us, right? Face the same challenge of trying to personal life and work life and trying not to get overloaded, to where you're just a workaholic and you can't find balance and you can't be present outside of work and then at the same time, be too present.

[00:17:41] Keith Smith: And so where you can't be present at work, and, but everybody fights that bound that challenge. And to your point, if your daughter came in right now, she oughta join the podcast, in my 

[00:17:50] Keith Smith: view. 

[00:17:51] Josh DeTar: She would, and she would have lots to

[00:17:53] Josh DeTar: say, trust me,

[00:17:54] Keith Smith: 

[00:17:54] Josh DeTar: I'm, I'm glad

[00:17:54] Josh DeTar: you said that, Keith. Can I,

[00:17:57] Josh DeTar: one of the things that I've said since, I don't know, maybe the mid time period of the pandemic, one of the things that I think was a positive that came outta that was when we forced everybody at home and everybody had to get on Zoom calls. You just, you literally were in people's homes, which we hadn't had a lot of exposure to in the corporate world. And I think what I appreciate you calling out is that we're

[00:18:27] Josh DeTar: all in this boat. and you're almost crazy to think. That you're the only one or that one of your employees is the only one.

[00:18:34] Josh DeTar: Like we're all dealing with, we all have kids that get sick or a doctor's appointment we need to go to or whatever it may be. And so all these challenges that I'm trying to figure out, you're trying to figure out and she's trying to figure out, we're all trying to figure out. And the more we can just be, open and accepting of that and saying, Hey, we all have life to live. As long as we agree on, at least a mutual semi definition of success for the company that is employing us, that we all are gonna

[00:19:06] Josh DeTar: approach that and life and this idea of balance maybe a little bit differently.

[00:19:11] Keith Smith: Yeah. said. Yeah. Yeah. But I, I do think, COVID,

[00:19:17] Keith Smith: gosh, could never predict such an event. And, but I do think it did kinda close that gap between leaving for work at 6:00 AM and coming home at 7:00 AM 7:00 PM And there's this black hole that nobody can connect the dots,at home.

[00:19:36] Keith Smith: and I do think it also helped,maybe I don't, maybe people are more personalized at work, with each other. I don't think it's been unhealthy by any means. I think people are, I don't wanna say exposed, but definitely you do have a view into people's personal lives when they're at home.

[00:19:55] Keith Smith: And you have, if you were in the East coast this week, right? And yesterday all the schools are closed. imagine the family that you've got two workings. Spouses, And two or three kids, and all of a sudden your house got really small. and you start realizing there's all these challenges that popped up because somebody's walking in needing to be fed lunch.

[00:20:19] Keith Smith: Somebody's wanting a hug to your point, right? And then somebody's not getting along with somebody. But the goal is, we all at work, we gotta hit the numbers, we gotta get the work done. And so in spite of all those different variables, we're still executing. 

[00:20:34] Keith Smith: Right? which you, when you think back about it, it's pretty awesome.

[00:20:37] Keith Smith: and when you, for us as a company, my current company, it's, we've gotta execute and hit the numbers and do what we say we're gonna do, in spite of, but keep a balance is, but I think pretty much all my employees know there is. Pure balance. It's always gonna be a give and take.

[00:20:58] Keith Smith: but the for home, you gotta keep that balance at work, we gotta hit the numbers. So get your job done and don't be afraid to say, I got something personal I gotta take care of. 'cause we all 

[00:21:09] Keith Smith: have that.

[00:21:09] Josh DeTar: Yeah, I think too, I personally really appreciate that kind of transparency. I think that transparency makes for a really strong culture, especially if somebody's, hearing from, their CEO and their leadership team. Hey, at the end of the day, let's call a spade. I pay you. And so therefore, there's an expectation that comes with that. But at the same

[00:21:30] Josh DeTar: time, there's an expectation that you're just, you're another human, you're

[00:21:33] Josh DeTar: another person, and you're somebody that I care about, and I wanna see you, live a

[00:21:37] Josh DeTar: happy, successful life. So let's find the ways that we can find the balance in that so that you can both be an awesome producer for our organization. But at the same time, you can be an awesome member of your family and your personal life.

[00:21:52] Keith Smith: Yeah. and I think Josh, that ties back into that defining what is the definition of success For on both sides and knowing that, I think it's just more per, more, more obvious I guess today that we all have a family life because of COVID and because of, all the Google Hangouts and Zoom calls and, complexity, they got exposed, but it's healthy.

[00:22:19] Keith Smith: It, 

[00:22:20] Keith Smith: you got, people need to be happy.

[00:22:22] Josh DeTar: I would 

[00:22:22] Josh DeTar: agree with you personally. I don't know if you know everybody's gonna agree with us that's 

[00:22:26] Keith Smith: Oh yeah, 

[00:22:27] Josh DeTar: but I agree. I actually.

[00:22:30] Josh DeTar: I totally get and respect and understand. Some people like to have a separation of church and state, right? They want work and personal and they don't want people to know about their personal lives or vice versa.

[00:22:41] Josh DeTar: But, again, for me, where I've really found my definition of success is that's just become one world. I will interchangeably talk about my wife and my kids at work and I'll talk about work at home. the running joke is that,our board could probably call my wife at any given time and get an update on all of our key metrics and she could probably give him a pretty decent report at any given time.

[00:23:06] Josh DeTar: And,she may love or hate that, I don't know. But, at the same time, I think,anybody on my team could probably give a report on what things are going on with my kids and what they're up to. And and I think because of that, I've also gotten to know my teammates. My colleagues a lot better because they have then opened up that way. and like their deeply personal lives have become a part of our conversations and now I know those people better and my bond is that much stronger with them. And what's interesting is I've found that's actually made the imbalance on the work side almost easier too, because then it's like, if Kevin needs something from me at eight o'clock at night,I know that he was probably up at 4:00 AM with his daughter.

[00:23:54] Keith Smith: 'cause that's when she likes to wake up and I know, you know what else went on in his day. And it's not just then somebody saying, can you do this for me at eight o'clock and I'm begrudgingly doing it, or whatever reason. I'm like, oh no, I. I know about that person on a personal level, and I really care about them, and so this is actually just as fulfilling as a part of the presence of the personal life. It's almost personal now on the work side, personally helping that work person at 8:00 PM Yeah. Yeah. Yeah, I agree. and I think this is Josh, where people, they find their own way, right? And some of us are geared to innovate. Some of us are geared to, to work in smaller companies and some people are really good at big corporations and, dealing with the existing and, scaling it and whatever, it takes, it, it does or it's just, it's personal, right?

[00:24:51] Keith Smith: and I think that balance helps, guide you as to where you're gonna be 

[00:24:55] Keith Smith: successful. Small company, big company.

[00:24:58] Josh DeTar: Yeah. again, I 

[00:24:59] Josh DeTar: think I am a really big fan of kind of the statement and the question that you pose, which is just, what is your definition of success? Because it is, it's, and for me to think that

[00:25:10] Josh DeTar: my definition of success is the same definition of success for everybody on my team is crazy. and this is one of those, mentored lessons that I got that I wish I'd had earlier on was now one of the first things that I like to do when we have new people that join the company is literally ask them like, what is your definition of success? Like, how do you like to be rewarded? And one of the guys who helped me see that was a podcast guest a couple of years ago, shout out to Austin Adams.

[00:25:41] Josh DeTar: He was the former CIO for JP Morgan Chase. And he gave me the example of he said,he would have employees or he would say, Hey, if you hit this KPII will get Jamie Diamond to stand up on a stage in the middle of Times Square and talk about how amazing you are. And he's and I would have one employee who would be like, oh my gosh, I'm gonna work 25 hours a day for that.

[00:26:07] Josh DeTar: That would be the coolest thing ever to have Jamie Diamond in the middle of Times Square talking about how awesome I am. And then I would have an employee that would be like, that sounds like the worst form of torture. I'm actually gonna quit over this. I'm not gonna do the task at all. That sounds terrible. And he got me to think about it. I was like, oh my gosh, that's so right. if one person's definition of success, maybe to get a raise, one person's definition of success may to have more time off. One person's definition of success may be totally different. And so just applying a blanket definition of success on behalf of your organization isn't actually setting them up for success.

[00:26:44] Keith Smith: yeah.

[00:26:45] Keith Smith: Yep. 

[00:26:46] Josh DeTar: How do you think about that with your companies?

[00:26:50] Keith Smith: it is, it's in a small company, it's really visible, right? Like you just, you get to know, you get to see, What, how, what really makes 'em go right. What are their real motivators are, and you know where their values are. And for them personally, right? Not like social value, but their values personally.

[00:27:10] Keith Smith: Like what do they value? Money, time, recognition. excursions, experiences. and I think for me is I've really focused hard trying to understand what everybody's, how do people define success, right? And helping them understand my definition of success company-wise, right? And so this is my definition.

[00:27:35] Keith Smith: Now let's work on yours, right? And how that, how we can accomplish that. and what's great about in my company, we've got to a point where there's a rhythm around that. It doesn't take a lot of effort. It happens, just through constant interaction and work and focused on the goals and then being as transparent as they want.

[00:27:56] Keith Smith: They're not forced to be transparent in their personal life, but they're not gonna be judged 'cause they gotta take their kid to doctor's appointment. or they've got a conflict because their spouse has a call at the same time. Or, there's some complexity. I don't, all kinds of stuff happens.

[00:28:10] Keith Smith: But, we definitely are very founded on what are we trying to achieve in our company? What are we trying to achieve for our clients? What are we trying to achieve for our shareholders? And then what are we trying to achieve for our individual employees? and trying to start at the top and then being able to tree down and understand all of those, is something we do, on a quarterly basis just to reset the goals and understand what the challenges are.

[00:28:39] Keith Smith: We don't get too much into the personal, those kind of come up on their own, but you get to under you, you know what the motivations are, to your point, Jamie Diamond and Times Square versus, it's putting bamboo under my fingernails or 

[00:28:52] Keith Smith: something. I don't want to do that.

[00:28:53] Josh DeTar: Yeah. Do just outta curiosity, do you guys employ anything like in your job descriptions or how you even do interviewing or hiring or hr? To identify Hey, do we think this person will align with kind of our culture of definition of successes? Is it that process driven or how? How do you think about it?

[00:29:16] Josh DeTar: Even in the early stages?

[00:29:19] Keith Smith: in the early stages, we, one is, it definitely, from a culture perspective, looking at, when you're building a company and you're looking at the first 15 employees,there's gotta be this interest in being able to take a risk and understand.

[00:29:39] Keith Smith: That this isn't a guaranteed, right? This is a high risk transaction we're entering into here and it could be high rewards and it's gonna take, a lot of effort. And people understanding that upfront and making sure what they're expecting to get out of the job, I think is so important. Early stage, right?

[00:30:00] Keith Smith: you can say, Josh, this is what I, the job is, what is it that you want outta this? Because if you, if what you're expecting doesn't align with the challenges of an early stage company, then you're not the right fit. 'cause we're gonna let you down. 

[00:30:15] Josh DeTar: Yeah. 

[00:30:15] Keith Smith: and you're gonna be disappointed. And I think that's a, the hard part in early on is getting to that.

[00:30:23] Keith Smith: 'cause everybody wants to talk about the company, but what do you, why are you taking this job and what do you really want out of it? Do you really understand, we don't have a proven roadmap here. We've gotta create the roadmap, right? We don't have, we're not somebody we can't go replicate in some situations.

[00:30:41] Keith Smith: We can't go replicate what somebody else has done 'cause we're innovating and doing what nobody else has done. And is that, fit your, or your expectations set, you know accordingly as to what you want to get out of this. and, early stage company too is, if you want a big paycheck, we're probably not the place, right?

[00:31:00] Keith Smith: If you want to create value and have long-term value and be part of creating something and building something with a end effect that you could have at an exit, some monetary gain that is extraordinary, you've got that opportunity, then that's great. But, early stage, comp is such a big.

[00:31:21] Keith Smith: Part of it. and then I think the hours that it takes, the level of work required and if those two aren't aligned, that's hard, right? Not everybody needs to love to hunt and fish in Montana, right? they just need to understand, the opportunity and make sure that for me, hiring somebody, can they achieve what they want to achieve or their expectation is not aligned or realistic, and what I think we can deliver as a CEO to them then,

[00:31:51] Keith Smith: is 

[00:31:51] Keith Smith: not a fit.

[00:31:53] Josh DeTar: Yeah, that makes a lot of sense. I feel like a thousand percent. I just gained a new interview question outta that last two minutes. when you've done this a bunch of times too, right? Could you walk us through maybe some of the progression of,some of the companies that you have started and you've done big, small, medium, everything in between.

[00:32:15] Josh DeTar: Start small, get big, like you've done all the flavors.

[00:32:19] Keith Smith: Yeah. Yeah. when I was in, when I was in corporate America, the first part of my career, I was, I think for me, I was the entrepreneur inside the company, right? Inside these big companies. and that was, where I found my greatest success. and you learn the discipline the big companies have, and, but finding the opportunity to innovate on top of that is special, right?

[00:32:45] Keith Smith: That's just, that's a game changer for somebody like me. and once I realized how hard it was to innovate in big companies, and so let's just, fortune 1000 companies, how hard it is to innovate and the need to acquire. It was like, I need to go build companies so I can sell 'em to these big companies, right?

[00:33:07] Keith Smith: Because not a whole of them, can do that and have the entrepreneur inside. And,when we, looking at the early stage, starting from small companies to, our gift card business that we started in to mobile banking, to mobile wallets, to, to what we're doing today.

[00:33:29] Keith Smith: It's a, there's certain things that just ring, ring true still today in all of these that worked in corporate America is, I, we've said it a bunch of times, but what are people's expectations, right? What are their, how do they define success? and then even from a shareholder perspective, right?

[00:33:47] Keith Smith: Investors, if you're out raising money and you've got an investor that doesn't.

[00:33:52] Keith Smith: Like their definition is success is not aligned with you as a CEO. I would qualify that as bad money, and if you're chasing a market that can't get you to what you define as success, right? It's a bad market.

[00:34:06] Keith Smith: so I'm not sure that really answered your question, but, it's, we've been very fortunate, in what we've been able to achieve and creating jobs, innovating technology, helping people, giving people opportunity, to grow their careers and even our clients, throughout all our companies, right?

[00:34:26] Keith Smith: there's a bunch of 'em that I can sit there and go, wow. they were a, manager and now they're a senior vice president right? Inside these companies. and it's understanding that our impact is. Monetary, but it also is 

[00:34:41] Keith Smith: personal.

[00:34:43] Josh DeTar: there, there also seems to be, at least for you, and just when we were talking through some of the different companies that you've started and some of the different projects that you've done and things, there seems to be a common denominator. They think it's probably everybody's gonna be like, duh, that's obvious common denominator for all founders and innovators, but it's, you seem to see the problem that people walk past. and it was really funny 'cause, you were talking to me

[00:35:08] Josh DeTar: about what you're doing now and one of the problems that you're solving and, and this will lead us to the maybe more directly relevant content that,our community financial institutions care about, which is money movement has really changed significantly over the last decade here in the us. But what's funny is that. Each time we solve one problem, the new weakest link becomes that much more visible. But like I said, I think it's funny how so many of us walk over the problem. We step over the problem and never stop to think, oh, you know what, that was a problem. We, what if we solve that? And Keith and I talked and just got a discovery for the podcast and all of this ended up talking about all these different things and all these different places that like he's been in, companies that he started that were right next to what we were doing over the years. And, and you were talking about how, we talk so much about Venmo solving the problem of peer to peer, right?

[00:36:15] Josh DeTar: And Keith and I go to lunch and we wanna split the bill, I put it on my credit card for the points and then he wants to send me, his 15 bucks for lunch. And we kinda solve that and we've got a bunch of different ways. And then the banks bring in Zelle and so we've got flavors for that. But there's still a huge problem in dispersing money from B2C in kind of some of the smaller, more like non-obvious scenarios, not payroll. And what was funny is Keith and I talked and then right after that I ended up having my last work trip of the year right before the holidays. And I had to go from the west coast to the east coast. I'm out there, I'm headed home, I'm on the plane, weather's fine, flight gets canceled for mechanical. Deboard the plane. I ended up having to stay the night long story short, it was a total circus getting back home. Huge shout out and thank you to Alaska Airlines. You're amazing. This is one of the reasons why I am a loyal customer of yours.

[00:37:28] Josh DeTar: they took amazing care of me. They did a great job, but that was in late December. We're now in late January, and I'm still working through with them the reimbursements for things like meals, hotel, flight change, all of that stuff. And it was just really funny to me that it was, again, it was one of those things that I've probably had happen a hundred times and never once, ever thought twice about it. Then I meet Keith, talk to him, and then I'm at the airport for my canceled flight, and I get handed this piece of paper that's like a $12 voucher to go grab some food in the airport. I'm like, oh, Keith. 

[00:38:14] Keith Smith: Oh 

[00:38:14] Josh DeTar: And so this is the next evolution of things that you were like, oh, actually, instead of just us accepting that piece of paper over and over again, let's talk about how do we solve it.

[00:38:25] Josh DeTar: So I'm rambling at this point, but tell me how did this go from just being something that you were like, oh, that's an annoyance to, I'm gonna start a company around this.

[00:38:36] Keith Smith: yeah. this is, I guess it, when you sit there and say, people step over a lot of opportunities, a lot of problems, don't think about how they solve 'em, right? We just keep moving and looking at 'em. And, for me, and I can, this one in particular, Josh, when you talk about what we're doing and why we're doing it, how it came about was probably a similar experience where, you know, you and I, and my kids, at the time when I started this work.

[00:39:04] Keith Smith: Teenagers going to college, and I was sending money to 'em via Venmo, right? And then Cash app came along and everything happened really quick and it was easy. And I didn't have to ask for anybody's financial information. It's kinda like, why can't we do that in business? Why can't I just send a payment and allow the consumer, the recipient to do what they want to do with it?

[00:39:26] Keith Smith: I don't need to know where you put your money. and so that to me just became an opportunity, right? And just, it was the consumer side was moving so fast, but the business side was lagging behind. And I always, I guess to if you and I could, if you and I were to exchange money, we'd do it right now and here, within 30 seconds you'd have your money and everything would be fine.

[00:39:45] Keith Smith: But if I needed to pay you through traditional business payment methods, today's Tuesday, maybe you get it on Friday. and probably I'd have to give you, get you to give me, routing transit account number, so I can a CH it. And so now I've got liability or you have trust issues.

[00:40:06] Keith Smith: What's keeping it do with my banking information, right? It's just friction, right? It's friction, that's an, and then it also invites fraud. So to me that was the aha moment, right? It was like, how do we go create a platform that can deliver a Venmo like experience when businesses are paying consumers and businesses, really small businesses?

[00:40:27] Keith Smith: and so that's what we set out to do. and similar to when we did the gift cards, in the very beginning, this was, you think about the days, you're probably too young to remember, but having to go store to get a gift card. You didn't walk into, you didn't walk into Safeway.

[00:40:42] Keith Smith: You didn't walk into Kroger, and there's a rack, to get a card. that was probably one of the first destinations that ever, was really created. And it became one of the most profitable square footages inside of a grocery store was that gift card rack. Because they had a hundred SKUs inside of a three by three square feet of the store, right?

[00:41:02] Keith Smith: Or a six by three, square footage, right? So it had a ton, but it was that it was a great place to con, to engage the consumer. It was a place they went every week. It was something that they needed to buy, and gift cards just started taking off. And then the infrastructure, which kinda leads to what we're doing today, the infrastructure was there.

[00:41:20] Keith Smith: We were looking at if you can take a terminal and swipe a card and you can take a terminal and do a return, can you take the terminal and load value on the card? Like, how do we use the current infrastructure? And so you take that model and. You jump forward and you look at mobile banking and we are sitting around, trying to figure out how to do mobile payments.

[00:41:40] Keith Smith: And it was a mo a aha moment that was like, we need to go create mobile banking and use the phone 'cause it's gonna be the third screen. And the iPhone wasn't even out, at the time it was the razor. But it was that same engagement level of how do I create a self-serve environment and take people out of the branch that are depositing checks and depositing cash or doing balance inquiries, which was a ton of traffic that they benefited.

[00:42:09] Keith Smith: The consumer became self-serve and the phone became secure.

[00:42:14] Keith Smith: Had mobile banking not happened, we wouldn't be doing mobile payments in my professional opinion. 'cause it proved that the mobile phone was a secure device. Now jump forward to what we're doing now, from a payouts network perspective and it's.

[00:42:29] Keith Smith: we know the payments are happening. We know that their legacy methods checks cash, a CH gift cards. We know there's a lot of fraud, there's a lot of friction. And we know that the Consumer Experience Cash app,Venmo are very secure, very smooth, self-serve. And so that's what we focused on, right?

[00:42:49] Keith Smith: Was doing that. But if we couldn't do it without the payment infrastructure being there. So one of the other things was we did not want to issue an account, right? 'cause the consumer doesn't want another account, they don't want another card, right? So how do we use the credentials that you already have and do that?

[00:43:06] Keith Smith: And that's what it was, you watch other technology, other innovation, and then it exposes, to your point, a weakness over here. And then you go figure out how to put your finger in the dike and, stop the water and, monetize it. that's how we, that's how this got started was better customer experience, reduced fraud, and the, I think the final measurement is improved loyalty.

[00:43:32] Keith Smith: And I think that's the, where we are in payments today. The payment's a commodity, right? How do you create loyalty? how do you create a preference for your payment type? If your Visa or MasterCard? How do you create a preference for your retail brand versus somebody else's re retail brand?

[00:43:51] Keith Smith: And we're all selling the same product, right? It's all experience and personalization. I would say that's 90% of it, right? I'm sure there's 10% I don't know about, there, there's, that's, I want to be able to. Do business with who? I like the brands that I like and I wanna pay how I want to pay, but it's really how do I get recognized by the payment type I'm using today?

[00:44:15] Keith Smith: And that, creates that 

[00:44:16] Keith Smith: affiliation. I

[00:44:18] Josh DeTar: I think that's, that was one of the things I

[00:44:20] Josh DeTar: found so fascinating about that, that first conversation with you and why I do think it warrants, like talking about what you are doing a little bit more bluntly, than I usually do with guests about their companies and services. But it was just, it was such an interesting example of exactly that, right?

[00:44:39] Josh DeTar: When, whatever infrastructure is needed to support something doesn't exist, the underlying technology doesn't exist, we're also a lot more likely to step over the problem because we think the solution is,insurmountable. 

[00:44:56] Keith Smith: right. Yep. 

[00:44:57] Josh DeTar: you think about there's so many stinking ways to move money in the us there's so many reasons we would need to move money. And you start factoring all the combinations of those things and it becomes a massive list, right? And so when the list was so incredibly massive with very few clear cut winners or I guess best in breed options, then it was a lot easier to, as a consumer accept a poor experience, right? Like when you and I went to lunch together and we wanted to split the bill, if we had to both go to an ATM and get cash out and leave a 20 and each get change

[00:45:42] Josh DeTar: and split the change when that was our experience. I was a lot more likely to be fine with the airline giving me a $12 voucher that was only good at six stores in the airport. And they had to be open and they had to accept the paper voucher and the employee had to understand how to redeem the voucher. And I had to realize that I couldn't use it on alcohol, but I could on food and all of these things. I was fine with that because I was like, Hey, this is just par for the course. Getting paid is a total pain in the ass. It is what it is. But now if I look

[00:46:15] Josh DeTar: around and I'm like, it's really easy here. It's really easy here. It's really easy here. Now why is it a pain here? Why can't this one be easy? And so I think it does expose a lot of things.

[00:46:26] Josh DeTar: And so I'd love to get your perspective just side topic and we'll pull it back around, but on, what are the impacts of real time payments? Fed now having on consumer expectations and just the now underlying infrastructure and technology to support, solving for some of these legacy pain points.

[00:46:51] Keith Smith: Yeah, so I think that it's, the ecosystem is so complex today, Josh, that when you look at faster payments, the misunderstanding is a problem, right? Of what faster payments are and what modality. Whether it's Fed Now or it's same day, a CH or it's OCT direct to debit, or it's a wire, right?

[00:47:16] Keith Smith: Like the challenges inside these ecosystems that the banks face, the merchants face, the airline faces. trying to balance what is efficient for me to efficient way for me to pay. And what's an efficient way for you to claim It is hard for companies to do, right? Because the ecosystem's so complex and so fed.

[00:47:40] Keith Smith: Now, great technology, great idea, and it works in a lot of environments, but the banks have to be connected and not all the banks are connected, right? So you've got break points in there. And so somebody's gotta build the software to handle those exceptions. And be able to take that exception and say, oh, I can't do Fed Now.

[00:48:03] Keith Smith: 'cause the banks, that just doesn't work between these two banks. So let me do OCT right? Direct to debit. Let me do, and be able to decision down for the client what is the, what is, how do I achieve the best payment method from a cost security time experience to the best experience, time, and recognition for the recipient.

[00:48:29] Keith Smith: And do that without, ultimately impact negatively impacting my recipient, right? Because a payment that's good for me, but is a poor experience means a customer that's gonna attract, right? And so like in your, and so I think that's the thing with faster payments, right? Is that there's a lot of choices out there, but finding the software, finding the solution, the provider that can.

[00:48:54] Keith Smith: Normalize or remove or remove the friction and try to normalize the payment methods to where all I need to do is say, I need to get Josh a hundred dollars. I don't care what he does with it, get it to him and get it to him the most secure, low cost, fastest way possible. And then be able to give me the option to pay Keith in a method that has controls around it.

[00:49:21] Keith Smith: Kind of to your point, I don't want it cash. It's an incentive. It's a reward. It's a rebate, but I want it to happen in real time and I only want it to happen in this environment, And so I need these controls around it and who can do that, because I think that's the challenge. That and the opportunity, I think this is the challenge in the market, the opportunity for companies like ours.

[00:49:45] Keith Smith: how do you smooth out, how do you normalize the difference between a Visa and a MasterCard? Between a Visa, MasterCard and a PayPal between Visa, MasterCard, PayPal, American Express, fed, now R-T-P-O-C-T. Right. and normalize that because I think they all have value. I know they all have value, and I know that this is, these payments are so tightly coupled to loyalty.

[00:50:14] Keith Smith: And loyalty is such a bigger term now. And more specifically lifetime value of a customer, right? Return on acquisition of a new customer. the retention, so I think that's, running off on that rabbit trail. faster payments I think are great, but the challenge of normalizing that and making it effective is

[00:50:35] Keith Smith: a great opportunity. 

[00:50:37] Josh DeTar: Yeah, that's a good point, Keith. 'cause I think, can I just make a broodish statement of it would make it a lot easier if we just mandated the only way to accept money was whatever picket fed. Now 

[00:50:49] Keith Smith: that's right. 

[00:50:50] Josh DeTar: Cash is gone, checks are gone.

[00:50:53] Josh DeTar: Debit cards are gone. Aach H is gone, wires are gone overnight. Done. Everybody is now on the Fed Now network. Everything moves, settles real time we're done. that would actually simplify things. The challenge is that's not as easy as is said, right? And we do have all of these different legacy methods and when you think about, all again, all the different ways that money needs to move and the reasons behind it, it always has to almost default back to the lowest common denominator. Right? And yeah, going back to the airlines example and giving you a $12 voucher, right? it's the lowest common denominator. We know at least everybody can use it. And to your point, for them it's actually less about. Getting me the $12, it's actually less, at least I would like to think less about, just, oh, we have to feed the guy 'cause we, got him stranded. And it's more about loyalty. It's more about saying, Hey, we, we understand that it's, our duty to take care of you in this instance, and we want to do that as a brand that values you as a customer. So we want to give you this voucher. We want you to actually use it. We want you to go get a Snickers and not be hangry like, so that you're, so that you're happy to be a loyal

[00:52:20] Josh DeTar: customer of ours. But then that opens up that challenge of, I don't know, may, maybe you can validate me here. How many of those have you gotten that you've never UI don't think I've ever actually used one. If I'm being totally honest, it's more pain in the neck than it's worth. I usually just throw 'em in the garbage, or if it comes as an email, I just mark it as

[00:52:42] Josh DeTar: red and move on.

[00:52:42] Josh DeTar: Like it is not worth my time and effort to try and figure out how to go spend that $12 in a way that I would care about. I'm like, yeah, thanks for the gesture, but I'm never gonna follow through

[00:52:53] Keith Smith: Yeah. I, it, I would tell you that I think that when the payment starts, the healing process, right? and especially like service recovery issue, it's the beginning of the healing, right? The wound 

[00:53:10] Josh DeTar: the healing process. I like that. 

[00:53:12] Keith Smith: and so if I think about, this is really bizarre, but you'll just have to go with me on this one.

[00:53:19] Keith Smith: If you had, you just think about over your life as a kid, there were certain bandaids that you liked and certain bandaids you didn't like, some bandaids didn't stay on. Some band bandaids really hurt when you pulled 'em off, and one or two bandaids were really great, right? And so when I think about service recovery, right?

[00:53:37] Keith Smith: Like in your airline situation where you've got a problem, what bandaid am I gonna put on that? and what's gonna be the best for what I'm trying to accomplish, right? And what I'm trying to accomplish is to make a bad situation better. And I'm trying to get, let the recipient know, I recognize we made an error and I'm gonna make it better.

[00:54:00] Keith Smith: It may not be perfect, but I'm gonna make it better and I'm gonna do the best I can to do that. And so speed is important. Flexibility is important, right? Reduced friction is important. There's nothing more irritating. And this has happened to me. I got a voucher, go to use it. And there's a sign we do not accept meal vouchers.

[00:54:23] Keith Smith: And it is what? Yeah. I wanna say it was like an Applebee's or something. I don't, we don't accept vouchers. Go to another place. and it's another big, restaurant brand that, serves burgers. and that one says, the, we don't accept vouchers are scanners down, right? So they didn't have the scanner to do the QR code.

[00:54:44] Keith Smith: It wasn't working. So they had to put a sign up in the airport right at their register that you couldn't take it. how do you focus on the least common denominator, right? And how do you have that payment flow? And that's what we do, right? And that's what we focused on was.

[00:54:57] Keith Smith: Taking all those variables out. And, back to the, bandaid, I guess analogy is, and also how do you not invite fraud in the all these payments, right? And just in the service recovery, these airlines are having to deal with all of that and all your different experiences.

[00:55:15] Keith Smith: Compensation for food is different than compensation for a hotel. And it's different than compensation for, transportation. And it's different for compensation that the FAA requires them to pay you on denied boarding, at the gate with a cash equivalent, right? So they've got all these decisions and all these influences they have to make, but, trying to find the best bandaid to put on it, and make a bad situation better, is what everybody's striving to do.

[00:55:45] Keith Smith: And, and that, that's what we're doing,

[00:55:47] Keith Smith: for our 

[00:55:48] Keith Smith: clients.

[00:55:49] Josh DeTar: What are some of the advancements and what were some of the barriers that had to get removed for you to be able to start to think about this as the next most important problem to solve?

[00:56:03] Keith Smith: we, when we built this, the first barrier was how are you gonna move money, right? we can talk about, I'm gonna pay Josh and I'm gonna do this, but settlement is hard, right? And making sure you can get those funds there and account for it. And so that was one of the first barriers, was figuring out how we're gonna, how we're gonna move money.

[00:56:26] Keith Smith: And, being able to use the rails of a Visa, MasterCard, the debit networks, the bank, whether it's Fed Now or RTP,how are you gonna get there was, I think really probably the first big hurdle. And the great thing was is that these existing networks, right? So I, I think there's a decision, are we gonna build our own network or are we gonna use the networks that are already out there?

[00:56:51] Keith Smith: And the decision was we're gonna use the networks that are already out there

[00:56:55] Keith Smith: now, would they let us? And being able to help them understand the value to them is we're gonna be pushing money that doesn't touch your network today because it's going via check. It's going via gift card, it's going via a CH, right?

[00:57:09] Keith Smith: And it's not hitting your network. So this is all greenfield and new volume moving across the credit and debit rails, that, that didn't exist. Or it's bank to bank, right? That they weren't touching today. 'cause it was running across, so it was more volume, new volume instead of trading volume.

[00:57:26] Keith Smith: Like merchant acquiring today. A lot of it's your trading volume, right? There's, where's the new volume coming? But in B2C payments, it's all greenfield. And so that was the first part, Josh was figuring out how we're gonna, how we're gonna get, the money deposited and then we figure how we're gonna deliver it, and get it claimed, but, how are you gonna, how are you gonna settle?

[00:57:46] Keith Smith: It was the big part. And then the second was just educating people. a lot of evangelizing, a lot of helping them understand that, change is, looks painful, but it's gonna be very beneficial, right? And either profits, lower cost, or, better,

[00:58:04] Keith Smith: lifetime value of customer.

[00:58:07] Josh DeTar: I think that's a pretty applicable statement in and of itself. change is gonna be painful, but it's gonna be valuable. And I do feel like that is something we're seeing a big,a big kind of, I don't know, element of some of the adoption of the new networks, of Fed down and RTP and 

[00:58:30] Josh DeTar: hey, this is just, it's a new way of doing things.

[00:58:32] Josh DeTar: It's change. We don't have processes in place for this. We don't have, documentation on how we're going to think about and prepare for. What could potential fraud losses look like here? What kind of personnel are we gonna need? It's all new, like anything else, it, when you have something that, tears down some of the old barriers, eventually it's gonna gain enough steam and an adoption. So it's just, at what point do you wanna back to your band, rip the bandaid.

[00:59:02] Keith Smith: Yeah. Yeah, that's that. and I think the other part, Josh, is that was a, there's a big challenge, in all of this, right? Just faster payments

[00:59:13] Keith Smith: is, there is not a perfect product, 

[00:59:16] Keith Smith: right? there is that underbanked individual that is there is that unbanked individual. There is that individual who just doesn't trust the system or doesn't want to do it that way.

[00:59:27] Keith Smith: and you gotta be able to solve for that. and it may not. And I think the buyers, the companies need to understand that the legacy. Maybe it's like checks, right? They said checks have been going away

[00:59:39] Keith Smith: my whole professional career. And checks are still here. they still have a purpose Right now.

[00:59:45] Keith Smith: All this electronification has happened, but you still have a checkbook, right? You're still doing, the checks are still out there. And I think that solving 80% or 90% of the problem, but understanding you're still gonna have some legacy and finding the right partner to do that, the right provider, is important, right?

[01:00:04] Keith Smith: And I think the, financial institutions are, whether it's a traditional bank or a credit union, are challenged with the legacy payment and how do they adopt and move into this full electronification and real time and better data and better, controls. Yeah, but there, there's no one.

[01:00:26] Keith Smith: I wish it was all fed. Now country, to your point, it make life a lot easier, right? It is just mono line. That's how it works. And everybody get on the train and go, but that's, not possible in these banks. I think the financial institutions in this country, it'd be great if to some people, we all walked around paying with our phones and we didn't have to issue cards and there weren't chips to be dipped and mag stripes to be swiped, and we just kinda waved our phone and everything happened automagically.

[01:00:54] Keith Smith: But the reality is that you have all three, you still have mag straight, you've got chip cards, and then you've got cards and mobile wallets and you gotta be able to deal with that. And I think that's where faster payments are, right? it's a, it really takes really great software to, to help smooth the bumps and remove the friction.

[01:01:18] Keith Smith: And fight off the fraud, and then you just gotta be able to,

[01:01:21] Keith Smith: have choice. 

[01:01:23] Josh DeTar: Keith, that's the one thing that, oh, go ahead.

[01:01:27] Keith Smith: I was just gonna say, but you don't wanna overwhelm the choice, right? 

[01:01:31] Keith Smith: some, you go to a restaurant that has a hundred things on the menu, or a very complex menu that I don't wanna go to that restaurant.

[01:01:39] Keith Smith: I'd rather go to the restaurant that has 12 things on the menu, right? Because I know it's a burger joint or it's a steak restaurant, and trying to be everything sometimes is too many choices, too confusing,

[01:01:50] Keith Smith: bad experience.

[01:01:53] Josh DeTar: Yeah. that's one of the things that I keep coming back to Keith, is 'cause there's almost like three prongs to this is one, it is crazy to me just how many options that we still have, right? Two, the whole fraud element is this man, it's a giant monkey wrench into this thing. And just would it be easier if everybody was on there was only one standard, right?

[01:02:20] Josh DeTar: That would also, that would make it easier. Would it also just be awesome if just people

[01:02:24] Josh DeTar: didn't suck and there weren't fraudsters? my goodness, how much that would simplify things like,

[01:02:31] Josh DeTar: but the third is that you brought up a point that, man, this one still just really irks me and it is crazy to me how high. In the us, like we put ourselves on a pedestal all the times for how developed we are, how many under and unbanked people there are in the us. It's crazy. Go travel around the US and go grab

[01:02:56] Josh DeTar: groceries at a Walmart on a Friday afternoon and go look at the line for check cashing, and it just, that alone should be a wake up call. And so you take all three of those

[01:03:11] Josh DeTar: factors now and you take the percentage of people that are under or underbanked, you take the fraud element of it and you take all the different ways that money can move, and then the combination of how those things interact with each other. And that's just three of, I'm probably missing even a couple of other big variables, but just those three alone so many different branches. In ways that this can go. And I think that's why you also are seeing so much innovation in that space right now is because in all reality, if we wanted to be a, dictatorship and we said there's only way one way to move money, there's only one way to use and receive money, therefore you have to be banked. you have to use this system. It's under iron lock and fist and it only works this way. And if we could do that, then yeah, it would simplify things. But to your point, that ain't happening any time soon. At least here in the us It's not that, that, white at night and shining armor riding in on his horse ain't coming anytime soon. So because of that, we're seeing a lot of innovation and you're seeing it in very niche specific areas of saying, Hey look, this is a problem that we used to just trip over. Now we're gonna just, we're gonna try and solve that. And unfortunately it's not a simple solution. So you're

[01:04:35] Josh DeTar: seeing a lot of innovation happen in, I think the payments and money movement space, and every time I think we have too many payments companies already, or money movement companies or solutions for that. Every time I think that, then I meet Keith, I'm like, oh, never thought about that scenario. Yeah. What about that stupid airline voucher I get? Yep. Guess we needed another company?

[01:04:58] Keith Smith: yeah. Josh, it's, when you think about the. B2C is, the reason B2C is so hard is because of the C right? It's about the, and I would say that consumer wants choice. 

[01:05:18] Josh DeTar: Yeah. 

[01:05:19] Keith Smith: And so that underbanked sometimes is underbanked. Intentionally. The unbanked is unbanked unintentionally.

[01:05:25] Keith Smith: Sometimes they don't have a choice, right? And, but they're, so the consumer wants choice, right? And they want personalization. And if you go back and look at the history of companies coming out of corporate America, even go back to corporate America and look at payments as a whole. You used to have merchants that were either MasterCard or Visa.

[01:05:45] Keith Smith: They weren't both, right? And then you had merchant then you said, okay, now I'm gonna have both at the point of sale, because the merchant said I need to accept both. So I don't have just people. so I don't have people leaving their home going, I'm gonna go shop at this store because I'm gonna pay with my Visa card.

[01:06:01] Keith Smith: I'm leaving home. I'm gonna go pay, I'm gonna go shop with this merchant 'cause I'm gonna use my MasterCard. That's the way it used to be back in the eighties. And so people would decide before they left the house. now we're a global economy. We got online retail, we got in-store retail, we got people delivering stuff to our house.

[01:06:16] Keith Smith: we got DoorDash, we got Uber Eats, we, we've got all the conveniences of the world, but because of choice and that's what I want. And when we moved, when we did the gift card business, it was all about the destination. It was about having the right SKUs and letting people come in and buy, what card they wanted in one destination.

[01:06:37] Keith Smith: and it took off, magically. But because we removed the friction of being able to load the card or fraud, right? So the cards used to be live. We figured out how to make 'em dead. We hung them on a J hook, we swiped 'em through a terminal and we allowed you to put $22 and 22 cents on a card.

[01:06:56] Keith Smith: And people were like, I like that flexibility.

[01:06:59] Keith Smith: I like that choice. I like that convenience. We moved to mobile banking. And mobile banking is all about convenience. I don't have to go to the branch. And the bank recognized those activities are not revenue generating. I don't want 'em in my branch and I'm given choice, right? So those really innovative banks early on found out that they could improve the customer experience.

[01:07:24] Keith Smith: They could imp improve the lifetime value of a customer. They could reduce the footprint of their branches and deliver better service and sell products and services that make money in the branch and let people self-serve for those. And now of course, now you can do loans and everything on your phone, right?

[01:07:41] Keith Smith: So it's all convenience. and the mobile wallet. Was, it's been around, we built the mobile wallet business in 2007, right? And today, wallets are now just getting to where they have value to me, right? They, for a long time they were neat to have, but it was hard to get content in there. That was really meaningful.

[01:08:02] Keith Smith: and now we've evolved to that. And I think this last, this part, and there'll be more to come, right? But B2C payments has been this hard to solve, but impacted loyalty, right? It impacted the lifetime value of a customer and or an employee, right? so in the restaurant industry, you have, you've got a server, three, four years ago, would work a, a lunch shift, but the manager didn't have time to do tips.

[01:08:31] Keith Smith: We're gonna do tips when it closes. So if you want your tips, come back to the restaurant tonight. And pick up your tips, right? Or come in the next day. And so when we were able to electronify that and allow you to go home and get a text to say, Hey, Josh, here's your tips for the day. And you just clicked on your text entered your debit card and your money was in your account, in, in minutes, that was a game changer, right?

[01:08:58] Keith Smith: and so that was that convenience of that B2C, payment that's taken place. And now you have, businesses, paying businesses and businesses paying small businesses, which could be a, a contractor, it could be a consumer type transaction. And you're using Fed Now, or you're using RTP,you're doing it in real time.

[01:09:17] Keith Smith: It's bank to bank transfers and the credentials are more secure. The tracking's better experience, in real time. And so the, that consumer side is just wide, wide open. I keep saying that, but it's hard, right? But it has so many impacts. And I would just say the biggest implication is satisfaction.

[01:09:39] Keith Smith: If I get paid faster and more secure as an employee, which was the beauty of direct deposit, now I'm getting tips. That's great. I'm gonna go, that's where I'm gonna go. Now, if you're a cash person and you don't, I had a lady, I asked her how she likes the digital payments.

[01:09:56] Keith Smith: She says, I don't like it. And I said, why? She said, because it goes into my bank account. And I said, why is that a problem? She said, because my husband knows what I made, and he's gonna go spend the money. And I said, so she, I said, so what did you do before? She said, I'd take my a hundred dollars and I'd go load it on my debit card, my reloadable debit card at Walmart.

[01:10:16] Keith Smith: and I said, so your husband didn't know you have that card? He said, no. 

[01:10:20] Keith Smith: And so you just got those little nuances, Where, 

[01:10:22] Josh DeTar: Can't solve for everything. 

[01:10:25] Keith Smith: no, you can't. there's no perfect product. But, faster, more secure, better experience, better data, is where we are, the payments of 

[01:10:34] Keith Smith: commodity.

[01:10:36] Keith Smith: to me, 

[01:10:37] Josh DeTar: I wanna come back to the, 

[01:10:38] Josh DeTar: the experience and the fraud thing, but just since you touched on it, I'm super curious. What's your thoughts on pay?

[01:10:45] Keith Smith: I don't know if I really have one today, but

[01:10:48] Josh DeTar: Really? Have you played around with it at all or,

[01:10:54] Keith Smith: I have not, and that's probably why I don't have a hard opinion,

[01:10:57] Keith Smith: on it.

[01:10:58] Josh DeTar: It seems

[01:10:58] Keith Smith: have you 

[01:10:59] Josh DeTar: adoption, which I'm gonna

[01:11:01] Josh DeTar: be totally honest. I was a little surprised by.

[01:11:04] Keith Smith: Yeah, I, yeah, I'm definitely surprised by its growth. have you been able to mess around with it much?

[01:11:09] Josh DeTar: Yeah. yeah, our,spin out QSO that's doing payments was actually one of the first, live pays credit unions, if not the first. And, and so I, I've gotten to play around with it through that and it's super slick. I'll give it that, but it just, I felt like to your point, like we, we, had all these different wallets and all of these different options and, I've got the native one on my iPhone and why do I need another wallet and all of this.

[01:11:42] Josh DeTar: But,it's really pretty slick how they've implemented it. and I think it opens up exactly what you're talking about, the loyalty opportunity for financial institutions and saying Hey, we're putting kind of your convenience and protection front and center. but it is coming through the convenience

[01:12:03] Josh DeTar: lens, which I think is the big difference maker.

[01:12:05] Josh DeTar: And that leads me back to that was what I was, I think you're spot on. And again, I don't think anybody's, this is not gonna come as a shock to anybody when I make the statement, but, experience wins all. it's just, it's so incredibly true. what was it? I needed something stupid the other day.

[01:12:19] Josh DeTar: Keith and I just had a crazy work week. My wife had just done the store run and she had stuff that she was doing with the kids and it was like a absolutely something I could have literally just driven two blocks down to the store and grabbed. And I just amazoned it and I needed it that day and I paid the two bucks or whatever to expedite it and get it that day.

[01:12:43] Josh DeTar: 'cause it wasn't over 25 bucks. it was that stupid man. 

[01:12:47] Keith Smith: Yeah. Yeah. 

[01:12:48] Josh DeTar: was just, the convenience just won. I was like, you know what?

[01:12:50] Josh DeTar: My time is worth more in this instance than the two bucks. Just Amazon. Get it over here. and that was it, right? And so

[01:13:01] Josh DeTar: it's just, the convenience always wins. And that is what drives adoption. And that's why, to your point, you see all of a sudden, these massive rises in adoption is just the convenience. We humans are simple creatures. if you make it easier for me, I'm gonna probably take that path. It's not because I'm lazy, it's just, it's easier.

[01:13:25] Keith Smith: yeah. I agree a hundred percent. and I think that the convenience and then the personalization, and that's where I think like these apps are gonna have a play in certain areas because of the personalization or the socialization, of that brand. and then there's the opposite side, right?

[01:13:46] Keith Smith: Where, I don't want another app, I don't, I want to be paid, right? Or I want to pay, and I want to use my current credentials. and I think that's a, there's gonna be those places where, you know, the adoption of pays or, whatever else is out there, can surprise you because of the people, how they relate to it, 

[01:14:09] Josh DeTar: Yeah. 

[01:14:10] Keith Smith: and the experience that they create.

[01:14:12] Keith Smith: And it, it is convenience, right? but I also think that there's, from a business perspective in the enterprise, and that's what we really focus on, are the, enterprise clients, the being able to deliver.

[01:14:28] Keith Smith: A better experience that's personalized. Like I think one of the challenges enterprise companies have today that's getting along in the tooth

[01:14:36] Keith Smith: is that I treat everybody the same when it comes to payments, right? And so what I mean by that is I'm gonna pay you, and if you want it to go to your checking account, enter your debit card.

[01:14:51] Keith Smith: If you want it to go to PayPal, enter PayPal, right? If you want to use, fed Now, use Fed now, right? If you want a gift card,

[01:15:00] Keith Smith: digital gift card, pick a digital gift card, right? If it fits that, that model, the business is, I just want to be able to pay Josh.

[01:15:09] Keith Smith: I really don't care what Josh does with it, right?

[01:15:12] Keith Smith: Or how he claims it. And that's that whole convenience and personalization. Because one day it's gonna be, I want the money deposited to my crypto account. What does business really care? As long as it's, federally 

[01:15:28] Keith Smith: compliant.

[01:15:29] Josh DeTar: Yeah. and I think that when we talk about user experience and convenience, especially when money's involved, you touched on this earlier, I think,one of the other stats that always also just shocks me is the incredibly high percentage of Americans that live paycheck to paycheck, right?

[01:15:51] Josh DeTar: So cashflow is a huge deal. So Abso freaking lly, think about. all sorts of different scenarios. The one that you gave me, when we talked last time that I was like, oh my gosh, how did I not think of was like an insurance scenario. I'm trying to get an insurance payment. My, what was, remember the, the Maui fires, right? I happened to actually be in Maui for when the Maui fires happened. I was talking to locals and they were like, yeah, the insurance companies and the government is doling out money, but the way they're doing it is painstakingly slow. And so this money is supposed to come. And it's, think about I I was just involved in a fire like this is 

[01:16:38] Keith Smith: Yeah.

[01:16:38] Keith Smith: Yeah.

[01:16:39] Josh DeTar: loss where that couple of bucks could literally be the difference between feeding my family and not. 

[01:16:47] Keith Smith: Yes, that's 

[01:16:48] Josh DeTar: And it takes days to get.

[01:16:51] Keith Smith: Yes, 

[01:16:51] Josh DeTar: to get

[01:16:52] Keith Smith: Yeah. 

[01:16:53] Josh DeTar: So insurance disbursements, like

[01:16:56] Josh DeTar: when we're talking about, it's not even just about the user experiences, making it more convenient, so I'm gonna gravitate towards it. Yes. I'm gonna gravitate towards it. Yes. I'm gonna be more loyal to it. But going back to what you even almost started this whole thing with we supposedly, especially those of us that work in this industry, a lot of us do it because we wanna do some good, we wanna have an impact on people. And to be able to allow somebody to be able to access funds instantly in a scenario like that, it that's actually real value. That's not just like lipstick value.

[01:17:32] Keith Smith: Yeah. in that, when in Josh, the, this is just my opinion, is that the slowness in payments in those situations like that insurance is unfortunately trying to mitigate fraud is trying to make sure I can track and reconcile, right? And do these things. And it's almost like a. You know it, it's this painful checks and balance process 

[01:18:01] Josh DeTar: yeah, it brings it full circle to this is what, we opened with of just each time we solve one problem or each time we bring one new innovation or technology, just exposes with a little bit more of a spotlight, some of the other areas.

[01:18:17] Josh DeTar: And I think it's cool to see. That's what's been neat about just getting to meet so many different people through this podcast and learn about the different challenges that they see and opportunities to solve those. Because like I said, this industry in specific, a lot of people are doing things to solve problems for people. you think about that exact scenario, somebody has an insurance claim and they live in Florida and got hit by a hurricane, and the faster they can get paid, the faster they can get a, person out there to work on it and repair their house and get them back to living in their home. That's not just about getting somebody paid. that's literally putting a family and potentially, small kids or whatever back in their beds. that's, I don't know, it's pretty cool. It's pretty noble stuff. So it's exciting to see people working on these different challenges.

[01:19:11] Josh DeTar: Awesome. Thanks Keith.

[01:19:12] Josh DeTar: again, thanks for making the time. Thanks for just a good old fashioned, honest conversation and thanks for coming and being a guest on the Digital Banking Podcast.

[01:19:20] Josh DeTar: we'll hear if somebody tells us if we hit their definition of success. So if you're listening and you've made it this far, let me know. thanks Keith.

[01:19:28] Thank you for listening to the Digital Banking Podcast, powered by Typhoon. Find more episodes on digital banking podcast.com or subscribe on Apple Podcasts or wherever you get your favorite podcasts.