Paul Bridgewater has been the CEO of Sage Payment Solutions for five months now, having come over from TSYS. During that time, he has explored the obstacles that SMBs face in the realm of payments — problems that larger companies to do not have to deal with — and he has some ideas for how to make things right. He shared his perspective with MPD CEO Karen Webster on a recent podcast.
KW: I want to offer my congratulations; this is the first time we’ve spoken since you accepted the position as CEO of Sage Payments Solutions. What drove your decision to make the move?
PB: First of all, thank you, Karen. I’m very excited to be a part of Sage now.
There were a few reasons for the move. The basic one is that I wanted to get back on to the acquiring and merchant side of the business. I happen to think it’s the most exciting area; it’s where I’ve found myself most comfortable throughout my years in the payments industry. What better place to get back to it than Sage?
Sage is clearly focused on the SMB space; I think there’s a large opportunity, from a payments perspective. The segment just continues to be, in my opinion, very underserved — and fragmented, in terms of payments. SMBs are what really drive the economy, and Sage is just so well-positioned to serve that audience in a way that hasn’t been done before.
Just think about the size of the industry: There’s 70 million small- or medium-sized businesses globally. Sage is fortunate to have relationships with around 6 million of them, with about 3 million of those businesses in the U.S. The space has expanded at an incredible rate; there’s something in the region of about 570,000 new business startups every month in the U.S. alone. I just think the opportunities are boundless.
When you look at some of the innovation that’s happening in the industry at the moment — specifically within the payments space — I see Sage being a company that can power a lot of that innovation, including other areas of the industry in which we operate.
In talking to customers, it really excites me to hear how Sage is such a trusted brand with SMBs and with accountants on a worldwide basis. Deep relationships already exist, and I think we’re well-positioned to provide true, complete business solutions around payments that I truly think cannot be matched anywhere else in the industry.
KW: I can hear the enthusiasm and excitement in your voice; I’m smiling as I’m listening to you because you’re clearly jumping in with both feet and embracing the opportunity.
I agree with you that the SMB market is exciting. There’s so much work to be done because there’s such a great need: small businesses — and even larger small businesses — have many demands on their time, but they require the same level of functionality that do larger enterprises. This sounds like an opportunity to really serve that market in a way that is effective and efficient for them.
You mentioned that Sage is positioned well to serve the market. How so?
PB: There’s lots of change happening; I totally agree. And the point you just made, Karen, is critical: Some of the services — from a financial perspective, particularly from a payments perspective — are available easily and frequently to large businesses, while SMBs struggle to get a hold of them.
Sage is a software company — a technology company — so delivering great technology is just straight down the middle of our DNA. As part of that, we address the three primary things a business owner thinks about when they think about payments — the “golden triangle” of accounting, payments and payroll:
First, “I need to get paid.” That means meeting the consumer where and how they want to pay; it’s critical.
Secondly, “I need to make payments” — to suppliers, to employees, et al. That just needs to be done with the click of a button and with confidence.
Thirdly, “I need to manage my money/cash flow.” That calls for real-time payment updates directly into the accounting software, and access to alternative funding, an area where we’re seeing a ton of innovation at the moment. Again, critical.
I’ve been here five months, now; I’ve already gone out and spoken to a bunch of our customers. The current solutions that they’re struggling with are fragmented and they’re having to piece all of it together themselves. Personally, I think that’s just wrong.
SMBs need real-time visibility into how they manage their entire businesses, and they need to be able to make smarter business decisions.
When Sage puts together accounting, payments, and payroll, I just think that delivers a beautiful solution that meets the need in the market today.
KW: Let’s talk about some of things you’ve heard from the customers you’ve spoken with — specifically about some of the payments trends that they’re trying to wrap their arms around. What are you hearing?
PB: When you go and speak to SMBs, I think the first thing that you need to help them understand is what payment options they should be offering, and how that decision best serves them to be able to understand who their consumer is.
Today, we support Apple Pay and Android Pay, and of course we’re EMV ready for October; but in helping SMBs to make sense of all that, that’s where a trusted partner really steps in and becomes more of a consultant to that particular business.
Because they’re busy. They’re busy building their business, running their business; worrying about their products, their cash flow, their employees and their customers.
Omnichannel is a big word in the industry. Customers want and need to shop for products and services, wherever and whenever and however they wish — we know that. The adoption of connective devices makes it easier for commerce to happen across a number of different channels. And it’s really interesting to see how that enables the SMBs to connect in a deeper and more personal relationship with the customer.
It’s changing so quickly, too. Nine percent of all sales in 2014 were eCommerce, while it was less than 1 percent in 1998. As it moves so quickly, it becomes more and more important.
Payment innovation is another area where we’re seeing huge changes and huge trends. The one constant in the payments industry over the next decade will be change. We’ve got contactless payments, now; we’ve got EMV; we’ve got mobile wallets; we’ve got tokenization; and even digital currencies such as bitcoin are showing up more and more these days.
New payment technology and the entrants into the space every day are bringing a lot of innovation. It’s great news for the industry and it makes it the place to be; if you’re not in payments now, I think you’re missing the beat. It’s great for customers, it’s great for business partners…and I’m really pleased to say that we’re already talking with a number of these new entrants.
I believe — and Sage believes — that partnering with innovators within our industry is the quickest way to embrace and deliver value directly to our customer, who is the SMB.
KW: I agree with you, and something you said makes a lot of sense: They’re looking for a trusted partner.
SMBs don’t have time to do the research and the vetting and the due diligence on what they should be doing; so they would naturally turn to a trusted partner like Sage to help them sort it out — not only what to do, but when to do it and why. That last question, which should often be first on the list, kind of gets buried.
Let’s talk about a “why” that I think is interesting: loyalty. It’s another one of these blunt instruments that I think businesses try to use to get customers engaged. But there are many flavors of loyalty solutions; there are many ways to approach it. Clearly, the aim is engagement and a relationship with the customer. Is that a topic of conversation with the businesses that you are talking to?
PB: Absolutely. And it relates back to an issue we were discussing earlier: the access to loyalty products and solutions that small- and medium-sized businesses have, versus what the large businesses have. I don’t think the industry up until now has done a great job in creating accessibility for SMBs for innovative loyalty programs and strategies.
SMBs need help. They’ve got to get access to similar products and services that larger businesses have available to them, such as, for example, financing and growth solutions.
At Sage, we’re really focused on creating solutions that are not typical — or affordable, for that matter — to SMBs, and doing it in a real simple, consistent, and cost-effective way.
Customer loyalty at SMBs exists at a rate much higher than it does at larger businesses. SMBs are more local; that’s a defining aspect. Connecting with Karen or Paul as we walk through the door — it’s table stakes; it’s pretty straightforward. It’s what small business owners do today. But staying connected with us? That’s the critical piece.
SMBs getting access to products that can connect them with customers via social networking or marketing growth solutions is so important, and it forms such a large part of our strategy around something that we’re calling “the movement of money.”
KW: When you say “the movement of money” — that’s very big. What do you mean by that?
PB: It’s bookends for a small- or medium-sized business.
It’s payments in — getting paid; it’s payments out — making payments to suppliers and employees. It’s the management of money. It’s the ability to access short-term alternative funding in order to augment a cash flow. It’s the protection of transactions as they move through a business. It’s the visibility and the access to social networking tools and marketing solutions that are cost-effective and affordable and available in real-time.
It’s all of these things pulled together, within one environment, and all connected into the accounting system for real-time cash flow, which we know is critical to our clients. That needs to be delivered and made accessible through a seamless and convenient onboarding solution.
Once an SMB owner has applied for and been onboarded into our payments program, for example, they shouldn’t have to be required to apply all over again if they want to use our payroll solutions. There should be seamless connection with Sage into that “golden triangle” I mentioned earlier, of accounting, payments and payroll.
That’s where we believe the core value is in a business solution for small- or medium-sized businesses.
KW: Can you give us a little peek into what’s next for Sage?
PB: I can give you a broad view of what’s next because Sage is changing. We’re no longer just an accounting software company; we provide software, payments, payroll, et cetera — we’re a professional services business. It’s not really about the front office anymore or the back office; it’s one office.
One thing I can talk about more specifically is Sage’s Global Customer Summit, taking place July 27-30 in New Orleans. We’re going to be hosting over 7,500 attendees, including customers, ISOs, and business partners. We’ve got more than 100 press and media outlets coming to cover keynotes and discussions with successful entrepreneurs — small business owners — like General Colin Powell, Deepak Chopra, Chad Hurley (one of the founders of YouTube), Tony Hawk, Jane Seymour, and a bunch more.
We’ve for sure got our plate full. It’s really exciting to be with Sage as we move forward.
Paul Bridgewater, CEO, Sage Payment Solutions
Paul joins Sage after most recently working for TSYS as the group executive and general manager of global product and innovation. Paul started his career in the U.K. working as an engineer and then joined Anker Data where he held positions in product management and field service engineering. He then worked for NatWest Group in its international merchant services business. Later, Paul joined Citibank and worked across Europe with roles in business development, product management, sales and distribution. After five years at Citi, Paul moved to the U.S. and joined Digital River as the SVP of Global Payment Services.
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