Global Fintech Interview with Jeff Siegel, Chief Executive Officer at BitRail

Hi Jeff, welcome to Fintech Interview Series. Tell us about your role at BitRail and how you started here. 

I have been a partner in a small investment bank for the past ten years or so. Over that time, we started several digital technology companies and made strategic investments in others. Throughout my career, I have run many organizations from Fortune 500 Companies to startups.   

BitRail started as an outgrowth of one of our existing ecommerce businesses. We wanted to launch our own, branded digital token that our customers could use to buy products online. We also knew that existing payment methods (credit cards, checks, etc) were too slow and expensive. As we built a digital token for ourselves, we realized that we could use our tech platform to launch branded tokens for other companies as well.

As the product took off, we needed a full time person to run the company. So I took over about a year ago.

Will it be apt to say, BitRail has created a USP in the Fintech domain? If yes, then how?

BitRail has a few unique selling propositions. The first is that we allow companies to create their own digital currency. These branded tokens live next to outdated and expensive options like credit cards at checkout.

The second unique selling proposition is that BitRail can help companies save money on each transaction. Credit cards usually charge merchants 2-5% for each transaction. BitRail is significantly less expensive than that because we use new technology and have less overhead.

Finally, BitRail allows companies to use their own branded currencies inside their loyalty programs. Currently, most companies have to use credit cards in their loyalty programs, which means higher expenses as well as missed opportunities to upsell and gather first party data.

Also Read: Global FinTech Interview with Stefan Rust, CEO at Laguna Labs

What is BitRail’s “Branded Digital Currency” and how is it benefitting the users in comparison to the credit cards? 

BitRail creates branded “tokens” that consumers can tie directly to their bank accounts. These tokens are used at checkout when people buy goods and services online. We have a secure, closed platform, so money transfers safely, quickly and less expensively.

Additionally, consumers benefit through incentives/loyalty programs like cash back, discounts, free merchandise and points as they use their digital tokens.

Over the past 5 years, BitRail has secured Money Transmitter Licenses (MTLs) and exemptions in most states and Washington DC. What are your plans in regard to the same?  

MTLs are a key differentiator for BitRail. Each state requires MTLs of any business that transfers funds or provides payment services. MTLs must be licensed in every state in which activity takes place. For example, if a money transmitter has a principal location in California but conducts money transmission business in 37 other states, the transmitter must be bonded in all 37 states in addition to California.

MTLs are expensive and time consuming to acquire and maintain. The implosion of the crypto markets were caused in large part by the lack of regulation and government oversight. In conjunction with our private tech platform and security measures, our MTLs insure that BitRail is a safe, regulated digital currency for our partners and the consumers.

Jeff, you are preparing to grow a new blockchain startup in Atlanta, could you please share a few insights about the same?  

BitRail is based in Atlanta and most of our tech team is there as well. We use the BlockChain mostly to track transactions. Our growth in Atlanta will include launching new products, onboarding new customers and expanding the team. We are currently onboarding many new customers and have had very favorable response to our product offerings.   

How is the role of a CEO in the Fintech space different from those in other industries – such as retail e-commerce or software development?

I’ve had the fortune to be a CEO and serve in executive leadership positions in several industries. In some ways, leading companies in different verticals is similar… it’s about the people first. Our team, our investors, our customers and our vendors. Then it becomes about managing expenses, growing revenue and improving operations.

Software development and the FinTech vertical present unique challenges in that they both change so fast. A Fintech CEO has to plan at least one year ahead with our product roadmap and staffing. The needs of our customers change quickly as technology evolves, so we have to adapt. We must also stay focused on selling what we offer, not completely blowing up our roadmap because of one customer or conversation.

Additionally, regulation and market volatility play a big role in the Fintech world. In order to secure funding, we have to stay on the leading edge and make sure we anticipate potential regulation while also keeping a close eye on our competition and the market overall.

Also Read: Global Fintech Interview with Sarah Idahosa, Founder at WomenInDeFi

How according to you will the fintech segment evolve in the coming years? Which industries will benefit most from the latest innovations in fintech, how and why? 

Online shopping in the U.S. still accounts for only 8.9% of retail sales, leaving a large opportunity for continued growth. Smartphones are becoming faster, smarter and more widely used. Security and safety measures continue to improve, leading way to consumers becoming more comfortable buying goods and services online. Advertising continues to improve in targeting and effectiveness. Social media continues to play a larger role in people’s lives.   

As a result, my predictions:

1. I wouldn’t be doing my job if I didn’t predict that digital payments and money transfers would be one of the largest areas of growth in Fintech. The legacy systems (credit cards) are simply too old and expensive to continue unchallenged. Smaller, more nimble technology like BitRail will oppose legacy methods.
2. Cryptocurrencies will continue to struggle until they are regulated. They also have to become easier to convert from USD to digital currency for the use of making purchases, not just trading on the value of tokens.
3. Artificial intelligence has the potential to improve the security, accuracy and efficiency of financial services.
4. The gig economy (short term employment, temporary and part-time positions filled by independent contractors and freelancers) will continue to drive the need for peer to peer payments and digital money transfers in fields like IT, programming, counseling, banking and marketing.

What are your organic and inorganic strategies for 2023?  

BitRail will continue to focus on securing large online marketplaces to use our branded tokens. Verticals like gaming, Quick Service Restaurants, mobile, retail and others will be a focus for us.  We will continue to work with existing payment processors to offer branded tokens for their merchants. Finally, BitRail will continue to provide cost savings to merchants and allow them to maintain control of their customers within their loyalty programs so they don’t have to rely solely on credit cards as a payment option.

How is AI contributing towards the Digital Payments space and in other relatable industries that you plan to dive into?

AI will play a large role in detecting and preventing fraud by pouring through large amounts of data to identify nefarious players and flag unusual transactions. Additionally, AI can automate workflow, utilize facial & voice recognition as well as apply image detection on documents to improve speed and security in financial transactions.

Also Read: Global Fintech Interview with Brandon Spear, CEO at TreviPay

Given the rapid pace of change in fintech today, what would your top five tips be for reskilling/upskilling initiatives for teams belonging to this niche?

1. Stay ahead of the trends and technology related to mobile, social and ecommerce.
2. Understand how money flows in a digital environment.
3. Study the new technology players and platforms in this space. What new solution do they provide?
4. Understand the world of NFTs and Crypto. What went wrong? How can we avoid the same mistakes in the future?
5. Understand where brick and mortar solutions have failed. How do we improve process and technology?

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

[To share your insights with us, please write to sghosh@martechseries.com]