How to Deliver Payments as a Platform

the cloud
What's Next In Payments®
7:15 AM EDT June 24th, 2014



Take a cloud-based credit card vault, bring it to 71 countries, and integrate it with 60+ payment gateways. What do you get? Spreedly. Last year, we spoke with the company’s CEO Justin Benson to get the scoop on what Spreedly brings to the table – or better yet, to the cloud. In a recent podcast interview, MPD CEO Karen Webster caught up with Benson to discuss how Spreedly’s vision has changed in the last year, and how it delivers payments-as-as-platform services to help mobile and ecommerce-focused merchants thrive.


KW: Last year, you described your business as a credit card vault that works with a number of gateways across many countries. But I’ve noticed on your website that you talk about Spreedly as “payments as a platform.” Tell us how that positioning evolved and what you’re doing these days.

JB: Our vision early on was to create an experience that developers enjoyed integrating to, where cards could be stored in the cloud and then allowed them to work with whatever gateway they wanted. Early on, we wanted to do the front end, but let merchants and platforms work with whomever they wanted from a processing perspective. We now have 60 plus payment gateways that we’ve pre-integrated to, allowing merchants and platforms to work with one or all of them.

What’s changed for us is that we’re expanding on that vision.

Once we launched, merchants loved the concept of having their own credit card vault, and said they didn’t even want to transact against a payment gateway, especially those in the ticketing or travel business that have a bunch of APIs exposed to them. Now, we can continue to support payment gateways, but also support those in the mobile commerce and ecommerce space who are choosing to work against those APIs.


KW: What kinds of things does Spreedly allow a merchant who wants to embrace the mobile commerce opportunity to do?

JB: If a merchant already has an account and wants to add a mobile experience, they may have a processing relationship in place, but the technology may lag competitive offerings. Those merchants can use Spreedly for dual integration, but not change their processor relationship – all of the financial flow and integration to ERP does not have to change; they can keep it all in the backend.

The other way we’re seeing Spreedly help merchants is, as an example, one of our customers has a mobile app for the Governor’s Ball, a 3-day musical fest. Users would sign up and input their credit card, and the customer used Beacon technology with merchants at the event. As users walked around the festival, they could order from various merchants through their phones, without any holding of funds. We’re allowing services like that to enable mobile payment with many payment gateways without any change around the flow of payment.


KW: On your website, you describe the reduction in the PCI compliance burden that merchants have to undertake. Can you explain how Spreedly does this?

JB: Most modern payment gateways already use tokenization and don’t let the card data touch your service or phone, so they make PCI standards relatively simple for merchants. The challenge is, as soon as you want to work with more than one payment gateway, you have to work out where you’re going to store those cards. If you’re working across more than one, you may have an individual buying from one merchant and then another 10 minutes later. They need to store that card and run it for different merchants using different gateways. As we know, as soon as you’re storing data, you’re within full scope of PCI compliance.

What we do that’s different is allow these merchants to get all of the benefits of easy tokenization with an independent, secured vault. That’s fairly new, not many others are doing this. Spreedly gives these merchants a transparent redirect, keeping them out of scope, but they are their customers’ cards on their side of the equation, and they use the gateway that they choose.


KW: You have a really colorful Gateway Index that you publish monthly on your site. What is the index designed to measure, and what motivated you to gather this data on a monthly basis?

JB: There are two things that motivated us.

One was an individual merchant that we had that experienced fraud on their site. Their payment gateway turned up the fraud filters on that account, but they didn’t ever turn those fraud filters off. The merchant then came to us and said that their decline rates had gone through the roof, and renewals were not processing. We looked at their data deeply, and we realized their decline rate jumped from 9 to 22 percent within 24 hours of that fraud event and never went back down. We saw that data and figured we should be doing something with it – no one knew exactly what a normal failure rate was when we asked around. That was the impetus.

The second thing was that we felt like, in all fairness to payment gateways and processors, if you’re grinding a few basis points off one gateway, not realizing that your decline rates are going to be 5 percent more, is that fair for the merchant and payment gateway? Spreedly and Shopify agreed to pool their data, and that became what we used to form the index. It’s focused on successful and failed credit card transactions, launched about 9 months ago. It exists to make sure discussions about decline rates are much broader than they have been – you now have that context you didn’t have before.


KW: Can you give us a preview into some of the things that you may be working on as Spreedly’s roadmap evolves?

JB: One of the most interesting things in the last 12 months, and really the last 3 months, has been the number of payment gateways approaching us and wanting to work with us. We have a couple that we’re working with that will use Spreedly as a bridge so they can keep their North American-based business but also help a merchant onboard a European gateway. We’ve had others say that while they’re not competitive with Spreedly’s payment gateways from a developer mindset, they have other strengths that Spreedly can help them continue to focus on. And we’re starting to see clients roll out Beacon-related payments, and what we call the “Uber-ization” of payments where the storing method is on a mobile device, and you can move seamlessly from merchant to merchant. But it will really be interesting for us to see what happens in the next year with mobile-driven online payments.


Spreedly GatewayIndex

 Spreedly GatewayIndex


Justin Benson
CEO of Spreedly

Mr. Justin M. Benson serves as the Chief Executive Officer of Spreedly, Inc. Mr. Benson served as Senior Vice President of Business Development, Sales & Marketing at Intraware Inc. since April 4, 2007. Mr. Benson served as Vice President of Sales and Marketing at Intraware Inc. from March 30, 2005 to April 4, 2007. Prior to Spreedly he was in sales and marketing executive roles with companies such as SafeNet. Mr. Benson served as the Regional Vice President of Sales at Intraware Inc., from March 2004 to May 2005, Regional Sales Director from March 2003 to February 2004, and Area Director for the Eastern Region from April 2002 to February 2003. Mr. Benson joined Intraware in 1997. Before joining Intraware, Mr. Benson worked within Client Relations for the Charles Schwab brokerage before moving to an online brokerage start up that was later acquired by Discover Card. Mr. Benson holds a BA in Politics and a Graduate Diploma in Economics from Monash University, Melbourne Australia.

Listen to the full podcast here.




  • homeless_disqus

    I’m glad read this article because I found Spreedly’s Gateway Index tool very useful in terms of data and very well implemented from a visual perspective. However, in looking at the latency outliers they appear to be gateways serving the Australian and German markets. I presume that if the Spreedly had infrastructure nearer to these markets that these gateways would have lower results. What I wonder is if Spreedly plans to deploy infrastructure in EMEA or APAC/Australia? Since the latency seems to be skewed by distance from Spreedly and there didn’t seem to be a correlation between latency and success rate, is there anything to be gleaned from the data surrounding the Australian and German payment gateways?

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