Global Fintech Interview with Andrew Gilboy, GM North America at GoCardless

Please tell us about your role and the team / technology you handle at GoCardless.

Since 2019, I have held the position of General Manager, North America for GoCardless, where I oversee the company’s revenue growth and expansion in the market. I joined GoCardless in 2017 as Chief Revenue Officer, when we were approximately one hundred employees — and we now have over five hundred.

Throughout my career, I have had a direct impact on the expansion of new and innovative technologies, and the global companies that developed them. In my two years as CRO at GoCardless, I expanded the business into France, Germany and Australia, while tripling the company value as we built our global bank debit network.

Prior to GoCardless, I held senior roles such as Vice President of EMEA for Demandware (acquired by Salesforce in 2016) and Vice President of EMEA for Oracle’s Enterprise 2.0 technologies.

What is GoCardless and how does it fit into the modern fintech ecosystem?

GoCardless is a global fintech that specializes in bank-to-bank payments. Our mission is to take the pain out of getting paid. We started at Y Combinator in 2011 and are now backed by GV (formerly Google Ventures), Salesforce Ventures, Bain Capital Ventures, and Accel Partners, among other investors. We serve more than 60,000 businesses worldwide, including DocuSign, SurveyMonkey, Box, LogMeIn, and 8×8, and process over $20 billion of payments across more than 30 countries each year.

GoCardless is unique in that we focus on recurring payments, or those often associated with subscriptions, invoices, and installments. We believe bank-to-bank payments are the best way to collect recurring payments – they maximize conversion and cash flow, minimize churn and bad debt, and reduce operational costs.

GoCardless has improved legacy bank-to-bank payment systems such as bank debit (known as ACH debit in the US). IDC research indicates that, on average, using GoCardless helps businesses lower their overall cost of taking payments by 56% and reduce the time it takes to get paid by 47%. Furthermore, we connected disparate bank debit systems around the world into one global network, allowing merchants to reach 44% more markets through a single platform.

Recently, we introduced open banking payments as part of the GoCardless offering. As a result, businesses can now collect one-off and recurring payments through one platform. This is a game-changing solution for merchants which helps them lower cost and churn and cater to payment preferences held by businesses and consumers alike. This new open banking feature also enables GoCardless to challenge the dominance of credit cards.

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How is the fintech ecosystem in the US/ Canada different from the EMEA region?

Fintech is thriving in both North America and EMEA. However, the ecosystem looks a bit different on either side of the Atlantic. One dimension that varies is the role of regulation in driving innovation.

Take open banking as an example. In EMEA, open banking is regulatory-led; that is, it was mandated that large, incumbent banks open up their customers’ financial data to third-party providers.

In contrast, the US has taken more of a laissez-faire regulatory approach to this, resulting in what could instead be described as ‘closed banking’. Banks are being pushed to offer APIs, but often these are private rather than public, and not standardized. Because of the inaccessibility of the ‘closed’ banking private APIs, we could see the emergence of an oligopoly in the US where only two or three companies have access to bank APIs and economies of scale. This could stymie the movement in the US by recreating the card oligopoly, which is precisely what regulators in EMEA want to avoid.

What are the unique challenges that you face in the US?

Bank debit is still seen as an ‘alternative’ payment method in the US. Compared to other markets around the world, there is a lack of awareness of the benefit it can bring to both payers and merchants.

For instance, GoCardless research indicates that while bank debit is the most favored way to pay by consumers in the UK, France, and Germany for household bills, digital subscriptions, traditional subscriptions and installments, debit and credit cards still take top billing in the US — except for installments, for which ACH debit is most preferred. What may surprise many, however, is that bank debit is second only to cards for both digital and traditional subscriptions, even ahead of digital wallets like PayPal.

The picture is similar for businesses. In the US the most likely way to pay for digital subscriptions and invoices is by using a corporate card, chosen by 54% and 52% of businesses, respectively. However, the second most preferred choice for each is bank debit (chosen by 38% and 42% of businesses for each use case).

We want to urge businesses to adopt bank debit as a payment method, especially because over three-quarters of US companies generate revenue from international markets. Many businesses are leaving money on the table by not offering bank debit to their customers, whether they’re businesses or consumers.

What kind of IT infrastructure does a company need to adopt your platform?

One of our main goals, when we started GoCardless, was to make it as easy as possible for merchants to access bank-to-bank payment methods such as bank debit. This means, for many merchants, no IT infrastructure is needed because GoCardless is cloud-based.

There are three primary ways companies can adopt our platform, depending on their needs. The first is using GoCardless directly through our online portal. Another method is to use our GoCardless API, which allows users to integrate our platform into their website or mobile app. This means they can build their own customized integration to automate payment collection and reconciliation.

Finally, merchants can connect to GoCardless through any of our 200+ partners, such as Xero, Salesforce and Zuora, to seamlessly integrate payment capabilities into their existing IT infrastructure.

Tell us about the recent trends in digital payments that you are most excited about. How did the pandemic push for new standards in the industry?

The pandemic accelerated the digitization of payments — and that trend looks here to stay. According to a recent survey conducted by GoCardless, 42% of Americans indicated that they will not return to using cash at pre-COVID levels or that their cash usage will remain low post-pandemic. That means businesses need to adapt to these changing preferences.

One trend in digital payments that I’m excited about is the introduction of open banking payments. At GoCardless we’ve long believed bank-to-bank payments are the best way to collect recurring payments – and with open banking technology, we have yet another bank-to-bank method our merchants can use, this time catering for one-off payments. But it’s not the open banking technology itself that will solve the problem. It’s the combination of open banking and other solutions.

GoCardless recently introduced Instant Bank Pay, a new open banking feature directly integrated into our global payment platform. This gives merchants the best of both worlds: open banking will provide instant confirmation of payment authorization, enabling them to have immediate visibility of their one-off payments, and bank debit will continue to offer the cash flow, cost and retention benefits they have come to expect.

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What services do you currently offer? What does your Ideal Customer Profile look like?

GoCardless has one product, which is our payment platform. Though this single platform, GoCardless merchants can:

• Access to eight currencies covering 30+ countries around the world through our global bank debit network
• Optimize payment success and retires using our Success+ feature
• Collect both instant, one-off payments and recurring payments, providing a compelling alternative to credit cards when companies need to provide instant access (e.g. streaming digital subscription) or ship a physical product at the outset of a longer-term relationship (e.g. grocery subscription)

Our ideal customer is one that is looking for a payment solution that offers a way to reduce both the operational and transactional costs of taking payments; reduce lost revenue from the involuntary churn of customers (due to cards expiring for subscription payments); and add a payment method domestically and internationally that is often preferred by consumers and businesses.

Fintech is one of the most proliferated data science marketplaces. How does GoCardless use data science, analytics, and AI?

One example of how we use data is Success+, a feature that helps merchants optimize payment retries. Success+ uses a machine learning model, trained on millions of recurring payments processed by GoCardless. Our algorithm uses the characteristics of payment to predict the likelihood of a retry attempt failing in the future. We combine these predictions with the preferences of merchants to decide if, when, and how many times to retry in the most optimal way.

Success+ helps businesses to recover, on average, 76% of their failed payments. Since its introduction last year, Success+ has helped over 10,000 merchants in 24 countries recover millions in revenue.

Which fintech startups / other startups from different domains are you keenly following?

I have been fascinated by commission-free retail investing startups like Robinhood in the US and Freetrade in the UK that have changed the investment landscape. They have opened up the previously expensive and semi-exclusive world of stock investing to the masses, for better or for worse!

Also Read: Global Fintech Interview with Oi Yee Choo, Chief Commercial Officer at ADDX

Thank you, Andrew! That was fun and we hope to see you back on globalfintechseries.com soon.