Change doesn’t always come overnight.
Especially when a business or customer is used to doing things a certain way. Even when a better, more innovative option comes along, it can be hard to make the leap unless there’s a guarantee the change will be worth it. In the latest installment of PYMNTS’ Commander In Chief Series, Steve LaBella, CEO of BillMo, provides insight into why innovation isn’t just about delivering a flashy product or service but also about ensuring that offering will eventually become something the customer can’t imagine life without.
Here’s an excerpt of the conversation.
PYMNTS: How would you define your company’s approach to innovation?
SL: Our focus on innovation from day one has always been centered around the customer. Convincing customers to change decades-long behavior is generally viewed as insane by most people, but we’ve found success by focusing on delivering value to the consumer. It turns out the trick to changing a business model that has been in place for decades is relatively simple: Deliver clear, easy and tangible value to the consumer to earn their trust, and they, over the long haul, will ultimately trust, use and reuse your product.
PYMNTS: Where do you look for innovative ideas, and why?
SL: First, we study our consumer, their way of life and how they financially function on a daily basis and then hone in on ways to improve upon and utilize the technology they already own (smartphones). We simultaneously think of ways to make financial transacting easier for them. A sure way to change someone’s behavior toward your product is to offer them something that will not only improve their lives but also give them a new way to do something more efficiently to the point where, once they use it a few times, they can’t live without it.
In addition, we constantly study other companies in and around our space and zero in on what they’re doing well and areas on which they can improve in order to give us more inspiration on how to continue to enhance our product. That typically has led us to improving the customer experience and delivering superior value.
PYMNTS: What is the most innovative thing you’ve ever done?
SL: Simple: BillMo. We have completely flipped the business model of a $600 billion industry. For the past 50-plus years, remittances have been a consumer-paid service. BillMo’s approach is exactly the opposite. We subsidize the cost of sending money through a revenue stream generated by the use of the received funds. This means the consumer spends 90 percent less to send money with BillMo, but we do this not because we want to be the low-cost provider in a crowded me-too field, but because we’ve figured out how to make money a different way without the sender or receiver paying for it.
PYMNTS: What do you wish you had more time to do?
SL: I wish I had more time to help our large vendors move faster. In our industry, we have dependencies on various banks and service providers across multiple countries. Like most startups, we move an order of magnitude faster than most of our partners. We fundamentally believe that speed to market with new features is a differentiator for us, but we are often slowed by the pace of our partners.
PYMNTS: What do you think that most people underestimate about innovating in payments?
SL: They underestimate the complexity and interdependencies on the existing infrastructure in addition to the regulatory constraints we have to funnel through.
PYMNTS: What keeps you up at night? What concerns you most in the payment solutions space?
SL: Three things concern me:
- Compliance across multiple countries: As we grow and expand into new countries, we have to be pliable and often bend to comply with regulations within those territories.
- Government intervention: from local, state and federal governments imposing taxes on senders to additional regulations descending upon the industry as a whole
- The speed at which dependent vendors and partners move: We’re often restricted by their internal approvals or slow-to-market innovations, which hinders our goal to be nimbler and quicker to market than our competitors.
PYMNTS: What trends and changes are you watching that are affecting the industry and your role?
SL: Like many industries, mobile technologies are having a dramatic effect on the payments space and remittance in particular. Smartphones are becoming increasingly more pervasive across the entire socioeconomic spectrum, opening new doors for all individuals to have equal access to sophisticated payments services. This is especially beneficial to those living in cash-based economies — for the first time, they are able to use smartphones to financially transact safely, quickly and at almost no cost, giving them tremendous financial freedom that they’ve not had before.
As far as my role as an innovator, I have to first say it’s rewarding to know we’ve brought new financial tools to those who’ve not had them before. But at the same time, it spurs me and my team further, to look at the future of our space and to anticipate the gaps and then come up with the next big thing that will fill them.
PYMNTS: What product has had the most impact on payments in the past five years, and why?
SL: Simple: Smartphones. Anyone with a smartphone — and the number of smartphone owners within our target market grows daily — can move money at anytime from anywhere.
PYMNTS: What person or company do you think “gets” innovation, and why — and, conversely, who or what has missed it, and why?
SL: I don’t like to point out specific companies that aren’t innovating, but I will say that the money transfer industry as a whole is missing the mark. It’s archaic. With all the technology available today, why is it that people still have to walk into a brick-and-mortar store to send or receive money? It doesn’t make sense to me.
PYMNTS: What advice would you give a young innovator in this space, and why would you tell them to heed it?
SL: Run the other way! Truly, though, the space we’ve chosen to occupy is complicated and requires an unbelievable amount of compliance and government oversight, and it seems to be getting worse, not better.
If you think your idea is groundbreaking and you have the wherewithal and the high waders to navigate the compliance and oversight needed to function here, then we welcome you and look forward to learning a thing or two from you. Hopefully, we’ll be studying you to model what you’re doing right. Best of luck to you!