In our payments education workshops, we make the point that today’s fintechs rarely do something entirely new. At the macro level, our activities and the transactions they produce haven’t changed. We buy food and clothing. We pay rent.

But where and how we do these things has been transformed by technology.

A Great Time to Be a Fintech

Fintechs are the newer, nimbler businesses that are most often changing how we do things. We buy tickets online, get takeout using our mobile phones, and file insurance claims via an app.

Fintech entrepreneurs are busting old processes with much improved user experiences and “value for money” propositions.

It’s a great time to be a fintech.

The building blocks are in place. Powerful cloud-based capabilities are common. APIs connect these tools. Rich data and machine learning generate specific, actionable insights. iOS and Android give smartphones super powers. Business models like payment facilitation help some fintechs. You can even become a bank.

Multiplayer Fintech Builds a Winning Service

Individual fintechs are partnering with others to develop and deliver compelling new services. This is multiplayer fintech. Think of it as the fintech supply chain. The direct provider of services to the customer uses the specific payments capabilities of other fintechs to expand and strengthen what it delivers to its customers.

This approach lets the provider get to market faster with better capabilities than its competitors. That builds a competitive moat for a period of time. And expands the company’s revenues through a broader range of services.

Not Always Easy in B2B

The ability of these fintechs to displace incumbent vendors and processes (“How we’ve always done it”) can be hindered by the target company’s size and reliance on legacy systems. Their complexity presents a barrier. Dismantling it can take a lot of time and change management process support.

For mid-sized firms, however, the choice to shift to cloud-based service delivery is fast becoming a no-brainer. The work from home imperative has only accelerated the decision.

Prospering Despite COVID

We all know that the Travel and Hospitality industries have taken a COVID-inflicted beating. But not every company serving those needs has suffered.

TripActions, focused on corporate travel, just raised $155M at a $5B valuation to help enterprises analyze travel and expense data.

Join TripActions‘ Robin Gandhi and George as they talk about how TripActions has prospered in the last year with its travel expense management service that makes both the COF and the employee smile.

TripActions has employed those building blocks and partnerships with firms like Visa, Stripe, and Modern Treasury. Using the multiplayer fintech approach, TripActions now has a service that has rewritten how an enterprise manages its travel and expense management processes. For the employee, the hated expense report submission process can be virtually eliminated.

TripActions’ services could not have been built even five years ago. Without today’s technical building blocks and those partner-provide capabilities, TripActions could not have built its services and hit the market as it has.

It’s a good time to be a fintech.

Here’s Robin talking about multiplayer fintech:

 

Read the Transcript at the Payments on Fire® website
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George Peabody:

Welcome to Payments on Fire, a podcast from Glenbrook Partners. I’m George Peabody, partner at Glenbrook and host of the podcasts. And we’re continuing our examination of how fintechs approach payments and how the horizontal functions that payments occupy get applied to some very specific sets of roles within a vertical orientation. And to do that, it’s my great pleasure today to welcome Robin Gandhi, who’s joined TripAction to lead its product engineering and operations effort for TripActions liquid offering, its next-generation payments and expense solutions. So, we’re really talking about expense management today, Robin, and payments. So, welcome, really glad to have you here.

Robin Gandhi:

Yeah, no. Great to be here. At least, I think I’ve been listening to the Payments on Fire podcast since you guys launched it, and so it’s great to be here and talk about this. It must mean that we’re doing something interesting, so hopefully, as people listen, talk about something that’s engaging and fun.

George Peabody:

Well, you also obviously have a bit of a talent for understatement because the market’s also endorsed what you’re doing about the time we’re recording this on the 5th of February. At the end of January, TripActions got, is it 155 million in investment, which puts Trip Actions, pre-money valuation of some $5 billion. So, very cool. Congratulations. I suspect that a lot of the market has, sort of a double-take because here is a company that’s focused on, your sweet spot has been in travel expense management, and now you’re expanding into expense management, but I kind of noticed that no-one’s really traveling a lot in this last year. So despite the fact that we’re all locked down, TripActions is getting some attention. I think one of the reasons that TripActions was happy to have you come on board and help out is that you’ve come from long experience at Adyen, which is a global provider of services to enterprises for payment services for enterprises. And let’s get started, Robin with a bit of an overview of trip actions. You know, let’s talk about expense management.

Robin Gandhi:

Yeah, no, I think it’s a good idea to take a step back and just talk a little bit about the product offerings we have, right. And, if you think about our four off to your point, it’s, it’s squarely within [inaudible 00:02:43] and we’re essentially a next generation corporate travel platform, right? So we’re basically trying to provide a consumer friendly approach and a tech follow-up to how you book corporate travel. I think up until now, a lot of people just book rogue, right? We call it going rogue because people will go out and work on their favorite consumer site. Right. And what that does is that as a CFO or controller, you have no visibility, like where’s the money being spent, where are people going? And so on the corporate travel side, even. So I joined right around the time that the pandemic hit.

Robin Gandhi:

But if you think about where we were before the pandemic hit, we were growing like crazy. And we were seeing a ton of volume because you just didn’t have any of the other providers that could be at that level of consumer experience. And what’s been really interesting, and I think when you talk about the ratings, a lot of it has to do with what we’re building on the payments and expense side, but even on the travel side, I would say some of the largest customers that we’ve brought on have been during the pandemic because we’ve been able to pivot and really help customers, right. So there was a ton of cancellations if you were with one of the other providers. I think it’d be really, really hard to figure out, okay, well, where’s my money. How do I use that towards another flight? Where are my people in the world?

Robin Gandhi:

So from a travel perspective, what’s great about all the companies that we talk about that are really innovative. It’s easy to pivot, right? And you can see where the future is. And I think we did the same thing with the liquid offering. So the liquid, the TripActions liquid offering is really the spend management offering that we have in TripActions. And initially, before COVID hit, the idea was, hey, we’re already capturing hotel, air, rail. What if we captured the coffees that you buy at Starbucks, what if we captured the Ubers that you’re taking. And then as we saw, COVID really slow down people going and traveling. We realized that there was this other need that CFOs and controllers had, right. Which was, hey, now people are spending money at home, right? You’re building up their home office.

Robin Gandhi:

Now they need to be on a subscription for certain services, right. And people are making decisions on their own. And at the end of the day, that’s what we want to empower. Right? We want to empower these distributed workforces and we’re going to be, I think we’re going to be in this for a long, long time, right? This is the new normal, where we go into work here. A lot of days we stay at home. We want to give our employees the ability to make spend decisions. But we also want to be able to have a lot of control as a CFO.

George Peabody:

So, so let me totally simplify this for a quick second. Is that, instead of employees using their own money, their own cards to make expense purchases, whether it’s for travel or Zoom subscriptions or whatever, your liquid platform is putting a card of some kind, either physical or a virtual card into every employee’s hands, and the company is saying, “When you make business expenses on behalf of the company, you use this payment credential”.

Robin Gandhi:

We’re basically generating a physical or virtual card that can be controlled by your company so that you can make decisions on your own. Right. And so you’re not putting the company at risk but you’re able to make the decisions by yourself.

George Peabody:

Yeah. And I love that cause that you’re able to create a card, a virtual card for a specific project. It’s like, I’m the events manager, I’ve got to put on multiple conferences. I can create, I’m going to ask the CFO to create multiple cards, multiple virtual cards for my team that’s putting together each of these conferences and on each card I can put spend limits, I can put policies on, but who they can spend it with. All that kind of thing.

Robin Gandhi:

Yep, exactly.

George Peabody:

So that’s super powerful. So, you’re kind of intermediaries and between, do I think about sort of three parties who’ve got, you’re serving the CFO for the enterprise, so there’s that appeal. You’ve got a consumer orientation that you’re leveraging, but you kind of have to, because if you want to have users use the system and not go rogue, consumers, you’ve got to appeal to. The travelers, the corporate spenders. And you’ve also got the hospitality and the travel people and other entities to work with. So that kind of gets to how do you make your money?

Robin Gandhi:

Yeah. I mean, it’s great because we’re trying to simplify this process for all the parties that you just mentioned.

George Peabody:

Yeah, but you’re trying to make money too.

Robin Gandhi:

We want to make some money too. So on the travel side, we operate the same way that you would think of your traditional travel management company or online bookings dealer. Right. So we, as we get supplied from hotels or airlines, we also get a piece of that essentially for referring that to the travel supply, which…

George Peabody:

It’s a commission of some kind right?

Robin Gandhi:

A commission on some level, right? So, that’s one place that we make money. We also make money on the travel side. We make money by just charging a fixed amount for the bookings that we make. And within that you get…

George Peabody:

And your CFO pays for that.

Robin Gandhi:

Exactly. Yeah. That’s where that one comes out of. And then, when we talk about the payments and expense side, there’s two pieces of it right? If you use us for all the expense management tools that we offer, we charge a license fee per user. And then the other place that we make money and where we actually share the money right, there is interchange, right? And so, on the interchange that we’re making off of, off of transactions, we’re sharing some with our corporates and then we’re keeping some of it for ourselves. Right? So, that’s how you can almost work around what we’re doing.

George Peabody:

So I love this where you’ve got this, you’ve got this hard focus on a particular vertical, and you’ve got all of these part-payment oriented tools. Now, let’s jump over to the tools. You know, Robin, one of the things, and we were sort of chatting about this earlier is that the fintechs today have got a toolkit that didn’t exist, I’d say even five years ago, and here you are able to provide not wholly new functions, but old functions in a wholly new way that really add value for all, for the stakeholders on multiple sides. Can you talk about some of the tools and the partners that you’ve got and how you’re using them to put this TripActions ecosystem together?

Robin Gandhi:

Yeah, no, I mean, I think this is, for me, this is the exciting part, right? Like being in payments for as long as we’ve all been excited about FinTech, to be able to combine what I think is best of breed in terms of next generation, then having the infrastructure to create then, beautiful user experiences around it is what I’m excited about. So if we think about one of the things that we’re doing is we’re using Stripe for issue of process. Right. And I, and to your point, I don’t think if we look three, four years ago, that you had the ability to do some of the things that we can do with Stripe. And I think you can do that with Adyen or Marquetta, but there’s the ability to basically apply policy in real time when someone swipes a card. I don’t think we ever had that before.

Robin Gandhi:

Right. So the reason we can put cards in people’s hands, and the reason we can make a CFO comfortable with that is you can say, “Hey, we’ll just turn off the car when someone’s not traveling. When they land in Sao Paulo, we’ll turn on the card. We know how much they’re allowed to spend when they’re in Sao Paulo”. That becomes really powerful. And it’s really something different when you can basically say, “You know what? I don’t need to know ahead of time. I’ll know really contextual clues. If you’re in a meeting who they’re meeting with what location they’re in and I’ll apply the policy that matters when they swipe my card”. That’s kind of crazy. Like, could we do that before? I don’t even think we could. Right.

George Peabody:

I’m just sort of laughing, thinking that maybe some of the travelers might think they’re in a surveillance state, from their corporate because in terms of the granularity that you get. But of course that means that filling out an expense report must be trivial at this point, with your tools.

Robin Gandhi:

I think I was telling you before, I’ve been here for a year and obviously things are different with Covid, but I have not reviewed an expense report. I have not submitted an expense report, but I know I’ve expensed things. Right. I’ve made business spend decisions on behalf of the company, but they’ve all just kind of singly gone through because they’ve been in policy and then they just get auto-approved. So that’s kind of cool. You know, you were asking about other Vintech infrastructure, right? We’re also using where we’re doing interesting things with Visa as well. All right. So between what Visa and Stripe are doing, I think there’s some really cool things. One, simple things are being able to just generate a card really quickly. You’re a new employee. You don’t have to wait for your card. It’s going to show up on Google Pay or Apple Pay.

Robin Gandhi:

But the really cool thing that we’re now starting to implement is when we think about Europe and you think about SCA doing second factor authentication or three net pass. It’s so quirky, right? Like you got to do a text message or maybe an email. Now we’re talking about doing it using biometrics. We already have the app on the phone, just use touch ID or face ID to verify that transaction. Back-end stuff is kind of cool. So, so Visa, Stripe, the other company that we use a lot is Plaid.

George Peabody:

So what does Plaid do for you?

Robin Gandhi:

Yeah, we use Plaid for two reasons. So, one is for reimbursement. We’re in this crazy world where up until now in general, most people pay out of pocket and then they wait until payroll pays them back.

George Peabody:

Assuming they have to get their expense report in on time.

Robin Gandhi:

Right. Exactly. Three months later after you’ve finished with all your trips and you’re sitting at home over the weekend and you follow those reports then you’ll get it two weeks later after applicant sent me. Right? Yeah. No. Now, if you submit a expense that you made on your own card or in cash, because we didn’t use the card that were issued with the stripe, or the card, if it’s in policy, you’re going to get money back the next day. And, we’re going to use Plaid to say, “Hey, just tell us who your bank is and we’ll send it to you”. And we’re using other things. So we’re using companies like Modern Treasury to connect bank to bank, and we’re moving funds in that way. The other way, the other reason that we were using Plaid is that we’re also recognizing that at the end of the day, everyone may not use the liquid card for every single transaction.

Robin Gandhi:

Right. So, you made a transaction on your Chase card. Let’s just log into Plaid. You can pick the transactions that you want. I also know what trips you’ve been on, so I can say, “Hey you know, during your trip to Brazil, here are the transactions that you need on your Chase card”. And we can make really cool experiences like that. So you can just start pulling them down instead of having to figure out, let me go back and look at my Chase account and see what I spent. Checking this stuff out.

George Peabody:

So the customer portal that you put together, you can expose not only the card transactions that have taken place on the Trip Actions card, you liquid program, you’re also displaying, and here are the ones you made while you were in Brazil on your personal card. And we can expose those as well.

Robin Gandhi:

Exactly. Yeah.

George Peabody:

Wow.

Robin Gandhi:

You know, the last thing I was going to say, one of the other pieces, which isn’t like traditionally thought of in this insight but like the most CR that we have these days is so good. So we use a company called Verify to do our CR. You can you take a picture of that receipt. Less than within three seconds and you’re going to be able to pull out all the line items on it. You’re going to be able to see exactly what somebody had. Sure. We can get it through level two, level three, but you don’t always get them. Right. So being able to take a picture of a receipt and really look at every single line item, that’s crazy, because you couldn’t do that five years ago. I think you would still have to double check that you’d still have to, it’s still taking a solid few hours, if not a day to say, “Okay, I’m a hundred percent sure I need to”.

George Peabody:

So I thought I could take a picture of the folio, my hotel bill folio, and you’re going to expose it to me electronically on the portal. And I can say, “Yes, yes, yes. Those are all business expenses. These two are not”.

Robin Gandhi:

Yeah, exactly.

George Peabody:

Extraordinary.

Robin Gandhi:

All of this is happening in mobile, right? We’re a mobile first I believe, because in the end, do you really want to go back to your laptop if you’re out in the world traveling?

George Peabody:

You’re really going after some other fintechs who’ve been out there for a little while.

Robin Gandhi:

Essentially. I think we can all probably play well together. There’s a ton of space. I mean, the reality is there’s just so much opportunity for innovation where everyone’s out, and selling to market. In the end, I think there is room for everyone to flight, right? But, yeah. It’s when you can give this level of visibility, it just becomes interesting.

George Peabody:

And a lot of what we’ve just been speaking of is goes well beyond the travel expense.

Robin Gandhi:

Yeah. That’s what we think. Right. Because that’s what you were saying. Hey, what does it mean to know our model in our mind and say, “Hey, your travel is a big piece of where employees spend company money. So it makes sense that we have that”. But then why not just widen them? Right. Why not think about all the other use cases that people spend money on the app in the company. And then, then you have a really great granular picture in real time with the spend is happening. It’s an interesting time, isn’t it?

George Peabody:

Yeah. It really is. And to think that, you’ve got a toolkit that really lets you do some very, some things that weren’t possible before to that point. How do you divide out your engineering?Is that, you’ve got a team that’s focused on user experience. You’ve got another, that’s focused one on consumer, one on CFO, a data analytics team. How do you divide out your development resources?

Robin Gandhi:

Yeah, I mean, for us, when we talk about our engineers, like they’re generally working across the board when we talk about the new space, right? Because you need both sides to be really happy about the experience, right? Whether the user is the CFO controller or whether he is the user that’s actually taking the card or their phone on the road or wherever they’re making purchases, you want to make that really beautiful. Right? So the way that we’ve broken the engineering team out is, we have our mobile team, which is really focused on your experience. And then we have the web team that is really delivering a lot of that admin experience. How do I get better visibility? How do I set policies that reflect what my actual policy is so that we can make these real time decisions so that when it shows up on the mobile phone that it’s a beautiful experience in that the user doesn’t have to do anything because we want to get to a place where you don’t have to punch anything, right? You want to pay for something, you pay for it, it gets categorized and gets approved. It gets sent to, it gets attached to the way and goes into your ERP, right? Like that’s, that’s where we’re getting very close to how we’re going to keep iterating to get there. But that’s kind of how it breaks out.

George Peabody:

What are the integration challenges you have with each of your enterprise customers and what’s the process and what are you finding the big, most challenging in terms of helping them take advantage of the capabilities that you’ve got?

Robin Gandhi:

We’re we’re asking companies to do something that they haven’t traditionally. Right. And so what I would say that our biggest challenge is this change management process of saying, because up until now, it’s always been, ile a big expense, get it fully approved and then push it to your ERP system. And that’s when you get visibility. Now we’re saying we’re going to buy a policy real time based off of what you want. And if the policy applies, it’s going to go through, otherwise it’s going to get flagged. And someone from the finance team is going to review it. It’s a big change, right? Because now you no longer need to have a big expense report that you are reimbursing on payroll every two weeks. It’s just, you know, the transactions are flowing through, you’re getting visibility. And so now we have to, we may have to get to a place with a lot of our customers on saying like, there’s two big change management things. One, most people don’t give cards to everybody. Be okay and be comfortable giving them away because you’re going to have enough pencils. And two is like, how do I think about this financial data? Not from the expense of what was back then.

George Peabody:

Yeah. I would think that tying that financial data to line items and the GL, for example, too policies or too cards, that’s a whole different workflow than they’ve ever experienced before.

Robin Gandhi:

Yeah, it is. I think we’re not obviously not completely turning this on its head, right. I mean, you still get corporate card feeds into your ERP. You still get expense management feeds into your ERP, but it’s like now we’re merging these two ideas together and then getting everyone to understand, how do I want to see this data? How do I want it? How do I want it to show up on my financial reports? I think that’s where it becomes interesting. And that’s where we, we also need to help everything at our enterprise customer, because they’ve just been so used to doing it every month.

George Peabody:

How have your enterprise customers traditionally handled just the expense reporting ingestion process? Have they staffed it themselves or they outsourced it? What have you seen?

Robin Gandhi:

I think most of them are using some of their traditional life expense management tools. And then most of those expense management tools have integrations into ERP systems, which we have as well. But like I said, it’s a different approach of thinking about how you do that. I think it’s worth noting that because we’re still relatively new in this. I would say we’re not going far into enterprise, just right. I think on the travel side, we have a lot of big enterprise customers, but we’re also recognizing that, at the onset, it’s probably going to be a little bit smaller organizations that have less complex means because I think as you get deeper and deeper into enterprise the needs around gel coat mapping and I use it issuing and in tax reclamation, they become more complicated. And then you also need a bigger global footprint. And I think, as we work with our partners, we’re continuing to push them and ourselves to increase that footprint, but it will inevitably take time.

George Peabody:

And I was assuming that as you move up market, given the complexities of enterprise, that you’d run into more legacy gear, legacy technology that might inhibit your ability to integrate.

Robin Gandhi:

Yeah, if I think back, even on my years of admin, right? I think that there’s, you start more with companies that are more flexible and that are tech forward and see the value of what we’re delivering. And then, and then you kind of get to the companies that are, are a bit more legacy and for them it’s a big change, but at some point they see hey, there is so much value here that it’s going to be difficult to rip everything out, but it’s worth it. I know that that one is a journey that I will see again. How does that add in? And I can see that we’re probably going to be on a similar trajctory.

George Peabody:

A lot of those younger companies are already growing up on cloud based infrastructure. You’re all cloud-based infrastructure. So it’s reaching to those companies are still processing on-prem with their own gear. That’s going to be where the tough part is. Oh, well, Robyn, what happened? We’ve spoken about? This has been a really interesting,

Robin Gandhi:

You know, one of the things that we probably haven’t touched too much on is the fact that we’re trying to bring a lot of context into when we talk about spend management and it’s weird that we haven’t done it up until now. We, you and I live in a crazy hyper-connected world, right. We know what everyone’s doing. We’re connected all the time. There’s all these data signals that are coming in. And the crazy part is that in expense management if you think about how it’s been up until now, if you’re a manager approving a expense report, or if you are a CFO controller or trying to figure out if that report was, if that expense was good or not, you have no context except for maybe what someone writes quickly in the memo line. Right. I think what we’re able to do now is, be able to bridge all of that data into a place where you can make informed decisions against it.

Robin Gandhi:

And it’s like that thing, okay, am I on my edit? Am I on a trip with a colleague? Or did I go out to a business lunch? And where am I in the world? And you know, what time of day is it and what project am I working on? And all of these things that we all know, and they’re all zeros and ones, and it should be easy enough. Like we just haven’t connected it all together. So that’s one of the things that I think becomes really powerful. And especially for us as a travel organization for us to also be able to understand where someone is based off of what they worked becomes kind of interesting. And I think to me, it’s pretty exciting. So that’s one, the other thing that I don’t think we touched on a whole lot is this idea of having people pay for stuff out of their pocket.

Robin Gandhi:

If you think about what that means. I know I’ve had a lot of young employees join my teams and it’s crazy that sometimes they have to go ask their parents to say, “Hey, can I use your card? Because my company doesn’t have a corporate card, but I need to make a $2,000 expense to go fly to wherever it is”. Right. How is that fair? If you think about from an equity perspective, it doesn’t, we’re disadvantaging people or we’re putting our employees in such an awkward spot. And the reason that we did it is because as a CFO controller, you kind of say, “Well, I’m definitely not giving everyone cards. It’s like my money. So let them figure it out”. And we’ve been okay with it. But like when we start thinking about equality and haves and have nots, it shouldn’t be that way. Right. I mean, I don’t even know how we got it here, but it’s because of the lack of control. And so I think for us, were saying, “Hey, we can give you a console. Let’s make this better for everybody”.

George Peabody:

I’ve never been a great fan of expense reports and always hated filling them out. And sometimes it’s cost me. So yeah, I’d take this trade despite the amount of data that I have to share to take advantage of it, as you said, that that data sharing is essentially transparent to me. So it’s an easy trade.

Robin Gandhi:

Yeah, no, exactly. It’s worth it in the end. I think like I said, if you never have to file an expense report again, you never have to do one except for the one or two that are out of policy instead of trying to figure out, hey, do I trust that person? What do I think? You know, how subjective is that? And it just, it’s not fair to, it’s not fair to them. It’s not fair to the end.

George Peabody:

Right? You can, a lot of assumptions about personalities can be eliminated here.

Robin Gandhi:

Yeah. Exactly.

George Peabody:

That’s a really good thing. Well, Robin, thanks so much, been a lot of fun, really appreciate the look into TripActions and what you’re doing and, and how payments fits. Again. I’m loving this intersection of sophisticated payments capability as applied to, well, I’m not going to tie you down just to hospitality and travel and say to the whole broad problem of expense management. It’s really cool.

Robin Gandhi:

Yeah. Well, thanks for having me. We’re pretty excited about what we’re building now. Looking forward to chatting about this. Thanks again for having me here.