From its headquarters in Silicon Valley, i2c Inc. sits in the center of a payments boom. Investment money is pouring into startups promising disruption, but i2c founder and CEO Amir Wain knows that payments is a long game. At the helm of a startup he formed in 2001 and that now operates in all 24 time zones, Wain also knows about staying power. He spoke with Paybefore about what it means to be global, how to stay relevant and why a single line of code keeps his business from becoming a commodity.
Paybefore: Payments is global. Did you build i2c with a global focus from the start?
Amir Wain: Absolutely. It’s reflected in the technology as well as the service delivery and the approach. If you want to be global, you really need to structure yourself with that in mind.
We’re the only processor running a single source code globally. Many global providers have multiple platforms. So, if a client wants a global product, it has to be integrated with 15 different platforms. Requiring multiple integrations adds complexity to product rollouts or enhancements. For us, it’s a single source code—a single integration point no matter where you are. That has given us the ability to scale and create a sustainable global model. We’ve built a million-piece Lego set. If you create a new use case, we’ll go build that Lego piece. Once we do, it can be used anywhere.
Paybefore: Does scale export?
AW: No, the benefits of scale you get in the U.S., for example, don’t necessarily transfer internationally. In most markets a processor has to build out local infrastructure—set up datacenters and deal with regulations that sometimes require a localized version of the platform source code. There’s no scale in terms of operational or cost efficiency operating like this.
By contrast, our single global platform runs off the same hardware and software stack. Because we use a virtual approach, our SaaS model leverages a cloud-based computing architecture that enables us to add capacity, such as more servers, or operationally manage a local instance—all off the same platform. In China it only took us 90 days to set up a datacenter at around $1 million, compared to legacy platforms that require large mainframes and many millions of dollars.
|“Far from a commodity, I think the single biggest thing that’s going to affect the output of your business is the processing infrastructure and what it enables you to do. The race track doesn’t matter if you don’t have a good car.”|
Paybefore: Speed to market is something you tout. How do you deliver, particularly as you expand?
AW: It’s important to understand brain versus brawn. Brawn doesn’t get you speed. And there’s a big myth that you gain speed at the expense of quality. It comes down to design. The only way to increase speed and improve quality is by automating processes, such as product setup and customer provisioning, which typically require a lot of manual work. Then you speed up the process and reduce opportunities for errors.
Paybefore: Some say processing is a commodity. Do you agree?
AW: If you’re talking about a traditional platform doing debits and credits—just a general ledger at scale—that’s a commodity. But there are a lot of unmet needs when it comes to offering a feature-rich payment product. That’s where we’re seeing convergence of loyalty and payments—whether it’s customer engagement or reporting and analytics. Being able to do the 15 other things our clients need is what keeps us relevant and keeps us from being commoditized.
We take a whole product approach that doesn’t require integration with outside vendors. We were the first to launch card-linked offers in 2008. Many have launched since then, but what we’ve done is to create in-authorization couponing. For example, if you go to buy something and there’s an offer for 20 percent off, when you swipe your card the POS will deduct the discount automatically. This real-time capability combined with messages to cardholders can drive desired behavior—such as card swipe versus ATM withdrawal—and improve program profitability.
Paybefore: So, how do you see your role as a processor?
AW: Far from a commodity, I think the single biggest thing that’s going to affect the output of your business is the processing infrastructure and what it enables you to do. The race track doesn’t matter if you don’t have a good car.
Paybefore: Payments is highly regulated and in prepaid, specifically, we’re seeing compliance costs go up. How do you approach innovation in that environment?
AW: We’re more of an innovation enabler. A lot of innovation is happening in how our clients deploy our platform and the use cases they develop. Innovation doesn’t need to be a super algorithm; it can be a super use case.
Paybefore: What does mobile mean to you and your clients?
AW: We see three approaches in the market. One is just doing what you do with plastic on the phone, which doesn’t make sense to me. The other extreme is to come out with some mobile feature or application that misses the reality on the ground. They’re trying to do something on the mobile without connecting it to the real world. It’s not ubiquitous or scalable.
The approach we’re focused on is how to leverage mobile to bypass the limits of the existing infrastructure. For example, mobile can be a channel for communicating supplementary information to improve the consumer experience. Think of my earlier coupon example. We facilitate execution of the offer as part of the payment and use mobile to send a message thanking the cardholder for redeeming the offer. It’s all part of the same transaction and user experience. For mobile commerce to work, it has to be integrated with the real world.
Paybefore: Your headquarters are in Silicon Valley. Is it inspiring?
AW: It’s expensive … It’s a great time to be in payments and work in a region so highly focused on disruption and innovation. I think payments is an industry ready for disruption, but there is one issue. The majority of Silicon Valley invests are looking for return in three to five years. Building payments infrastructure is not a three- to five-year investment. Payments is an extremely complex business. It’s not for faint of heart.
Paybefore: Who will be left standing?
AW: No. 1 is substance. You have to provide something that’s differentiated and can stand the test of time. The second thing is scale. And the third thing is really being global. The world is getting smaller and there are lots of opportunities for enabling cross-border commerce. We’re driven by being relevant and meaningful in what we do. We don’t want to be just another also-ran.