NMI’s Payment Playbook Podcast – Episode 5: Maast Chief Revenue Officer Ernie Moran

Here to kick off the next episode in our embedded finance series is Maast Chief Revenue Officer Ernie Moran. Ernie has been in the industry for over 25 years and is an integral part of the team defining embedded finance at his company. What’s his recipe for success? According to Ernie, a disciplined focus on delivering real value to the market always wins out. And few things offer more value in our industry than embedded finance.

Maast helps software providers like ERP and vertical SaaS become a one-stop shop for their customers by offering a suite of integrated services in their software platform. Their goal is to simplify money management for businesses while enabling software providers to unlock the hidden revenue provided through the embedded ecosystem in a way that truly optimizes the customer experience.

Ernie himself defines embedded finance as “everything to do with the flow of money.” He gives a comprehensive overview of the three-step process required for the most efficient embedded model for any business. Also on tap for our discussion is the necessity of having the right products at the right time and in a manner that is easy to consume. We also talk about the ISO community and its role in the future of embedded finance.

Tune in to hear Ernie talk about the embedded ecosystem, including the embedded finance trend related to the overall industry, the necessity for innovation to stay real-time and relevant, and the projected demise of organizations focused on selling traditional payment services. Ernie wraps up with some great concepts that software companies and ISOs should consider when exploring embedded finance.

Greg Myers: Hi, Ernie, and welcome to this episode of the Leaders in Payments Podcast where we’re doing a deep dive on embedded finance. So welcome to the show.

Ernie Moran: Thanks, Greg. Glad to be here.

Greg Myers: Great. So, let’s start out by having you tell us a little bit about your current role at Maast and maybe a little personal and career background about how you got there.

Ernie Moran: Sure. I joined Maast this year as Chief Revenue Officer. And I really wanted to be part of the team that’s truly defining embedded finance. I’ve been in the payment space on the acquiring and issuing side for over 25 years, with some big traditional players as well as some smaller niche organizations. And what that experience has shown me is that a disciplined focus on delivering real value to the market just always wins out. And I continue to be surprised at how that concept is so obvious yet so many struggle with it. And at Maast that truly is our mission, it’s delivering real value with embedded finance. And the reception so far has been positive and super exciting.

Greg Myers: Okay, well, let’s talk about the company Maast a little more detail. So, what exactly does Maast do?

Ernie Moran: Yeah, we help software providers like ERPs and vertical SaaS really become a one stop shop for their customers, by offering a suite of embedded finance solutions that is integrated services into their software. So, with a single contract and integration, Maast partners can provide their customers with integrated payment acceptance, business checking accounts, debit cards, and other forthcoming financial services, all under their own brand. And this integrated experience simplifies money management for businesses and ensures that those software providers maintain their brand prominence and loyalty. And additionally, this approach allows the software providers to really unlock hidden revenue, and amp up customer experiences by monetizing payment acceptance, and business checking deposits as features in the platform. And as we say, around here, when a software provider includes embedded services on their platform, they can cash in every time their customers accept payments, or bank the revenue.

Greg Myers: So, tell me a little bit more about Maast, maybe the size of the company and a few details like that?

Ernie Moran: Yeah, sure. So Maast has been working on this solution, pushing it to market for a little over a year and a half now. We’re about 20 employees, it’s important to know that we’re a wholly owned subsidiary underneath Synovus. So even though Maast is a small organization that’s bringing this embedded finance product to market, we’ve got the structure and the stability of this juggernaut of banking behind us, and most forget sometimes or don’t realize just how innovative a bank Synovus is, with this thesis, and with some of their sponsorships of so many ISOs out in the market. It’s a perfect match, to be able to allow Maast to provide the services, but standing behind them this incredible parent company.

Greg Myers: Okay, I think that might be a good segue to the next question of what differentiates Maast in the marketplace today.

Ernie Moran: Yeah, great question. Well, first, it’s just simply it’s payments and banking in one solution. And unlike others who offer payments or banking, Maast offers, both in a single integrated offering. This allows those software providers to follow the flow of money and to end by helping business owners and they can get started really fast. We simplify enrollment. They can accept more payments and link those bank deposits. When that happens, the software providers can fully understand how, when and where their business customers are moving money, so they can promote relevant offers and extend that critical lifetime value. Second thing I’d say is that differentiates us is it’s really easy to buy, sell and use. Software providers can get started in just a short period of time with a single production ready integration, no more complex vendor connections for multiple providers. And unlike others, Maast offers a fully brandable experience fully brandable. So, business owners, the customers of the software providers, they know and trust their software providers. One less logo reduces confusion and increases value for that software provider. Probably third is we’re a built in bank sponsor. So, Maast is a wholly owned subsidiary of Synovus, as I mentioned, it’s a recognized innovator in the industry. So, we blend that security, stability and compliance services that come with Synovus and Synovus has a rock solid reputation, and then that member FDIC status with the same agility and vigor of a startup that we are.

Greg Myers: Okay. And, of the things I think, just to remind people, your CEO, Tom, was on the show a few months back, and one of the things he and I talked about that I thought was really intriguing, as someone who’s been around this space for a while, is the fact that, you guys know the importance of getting your customers customers to adopt the product, right, whether it’s a payment product or a checking product. Right how important that is, and you guys work with them to create marketing campaigns to get that adoption. And I think that’s an interesting component that I don’t hear a lot of other companies do.

Ernie Moran: Yeah, it’s so true. First off, that was a tremendous podcast with Tom Bell. I mean, he’s an industry titan. I would highly suggest if people have not heard that, watch that to go back and listen, it was an outstanding podcast, always great to listen to Tom, and you did a great job on that, Greg. But, yeah, if you look around the industry, in people that are doing similar things on the embedded payment side, not but in finance, but embedded payments side, you know, they’re driving partners to do the integration, they’re driving partners to acquire the services. But then the majority of those partners just unfortunately, don’t end up actually realizing the adoption metrics that they’re looking for. And that’s a real shame, because there’s a lot of work that goes into it during that buying process. And during that integration process, and that’s a huge differentiator for Maast is that we work with that partner to on a go to market strategy, that guarantees that we’re going to drive either adoption or conversion from their existing base, or even help with customer acquisition, like we’re doing with a couple of partners today, where they don’t have a base of business, but we’re going out to market and helping them with campaigns and content that’s really driving new customer growth to their software. So, it’s a real differentiator. You’re absolutely right, Greg, thanks for bringing that up.

Greg Myers: Yeah, absolutely. And, you mentioned embedded payments, and that’s been all the buzz for several years. And it may go right under the term payment facilitator or payfac, I mean, that’s kind of similar, right. But what I want to talk about with the rest of this session is let’s look at that beyond payments, because I feel like that’s what this series is about. And I feel like, that’s the future, right, and the companies that are setting themselves up now to provide that I think are going to be successful. So, just high level question, how do you view or define embedded finance?

Ernie Moran: Yeah, it’s, it’s a great question, because everything has been embedded payments to the point where it’s fairly ubiquitous. Embedded finance, simply put, is everything to do with the flow of money. It’s when banks or other financial service providers help the software provider or other organizations offer a suite of financial products as features in their software. And normally, this requires multiple providers to deliver things like payment acceptance, bank accounts, debit cards, and other financial products that leads to multiple relationships, complex integrations, and really, unfortunately, in the end, really clunky customer experiences. And often banking services are provided through a third-party tech company that requires a bank sponsor to comply with federal and state regulations and that adds even more complexity. I spoke to a partner this week who was onboarding a customer and he said that every day they uncovered a new integration with the customer. And then the cost factor that customer was paying in the end over 9% in fees, because you know, vendor A takes a piece at the point of sale and vendor B takes a piece down the line, et cetera, et cetera, there’s definitely a better way. And the trick is to have the right solution. When the business owner, the customer, that software provider needs it, and makes it easy to get started. And the most efficient models are typically three steps. And this is what we follow. The software provider, of course, enrolls the business owner and signs them up with their software, then we begin identifying or looking for signs a business owner needs additional services like business checking, payment acceptance, loans or more. And that’s where our performance marketing comes in. And then the simplification of it, the key making the services the business owners need readily and easily available right within the platform. And so that end-to-end financial services strategy, can help you create value for your customers by making the right products available at the right time. And by making those products really easy to consume, the direct benefit to the customer is often more services at lower costs, and less time having to do this swivel chair thing between platforms, most of which those platforms don’t speak to each other, which cause additional operational inefficiencies.

Greg Myers: Okay, and, you know, I know some software companies have started to integrate products beyond payments, I don’t think it’s anywhere near kind of the penetration of payment acceptance. But, you know, when do you see that starting to really happen in the in the marketplace?

Ernie Moran: Yeah, as you said, it’s great news is they’ve already started, which is great for the consumer, it’s great for the business customer. But you’re right, they’re only just getting started. Forbes projects, something like $230 billion in revenue, by 2025. That’s a 10x increase from 22 and a half billion from in 2020. So, it’s growing. But there is a heck of a lot more runway for growth. So, I see it from this point forward, starting to accelerate at a pretty quick pace. And Maast is providing some of that pace. But the opportunity isreally massive for software providers are going to be able to enhance their platforms with valuable features, to attract new customers, increase revenue per customer and deepen those relationships. Because like you said, payment processing, embedded payments, it’s definitely proven path to success, Everybody I talked to is thinking about it already. There’s very few if any, that aren’t, but it’s not a differentiator anymore. So other embedded finance offerings, like banking, can increase that value, create the new revenue streams deepen the relationships, I would say if a software company isn’t already thinking about all of these opportunities to differentiate their product from their competitors product, it’s time to dive in.

Greg Myers: Yeah I agree. And you said banking, to me, banking is a broad term, where do you see like, what’s the next step for a lot of these companies? Is it credit cards? Is it debit or deposit products? Or, what is it, insurance? I mean, what do you feel like is sort of the next set of products that we’re going to see really get some penetration?

Ernie Moran: Yeah, the short answer is, it’s going to be very vertical specific, of course. But the longer answer is a place to store value, a business checking account, at its core is just such a fundamental product. And believe it or not, it’s not as for those people that don’t know, it’s not as easy to acquire, it’s not free, generally. And so there are challenges with that. So, I think that business checking accounts, is really going to launch and be kind of a launching point for so many additional products. You know, so many software providers, they’re just capturing just a little piece of the revenue right now in that payments flows through, but where does it flow through to, it flows through to a bank account that they have? No, they get no value off of, they get no monetization of that bank account. They only monetize it as that payment is flowing through. Being able to provide business checking accounts, a real value to your business customers, where not only can those payments flow through your embedded payments function, but into a checking account that you’ve now provided to your customer. That’s going to be a game changer. And it’s difficult right now, which is why we’re what we’re doing. But it’s going to soon be a place where as a business customer, you’ll be looking for your software provider to be able to give you that extra service of business checking account. I think from there, it’s a launching point for other financial services, once you have payments and banking, lending becomes easier, insurance becomes really easy things like accounting, and then all of the data that gets mixed up in this, that you can utilize as a provider really becomes powerful. So, I think the launching point for me is that value storage that business checking account is such a critical component of, of businesses.

Greg Myers: Yeah, and you mentioned something that I was going to ask you about the whole data aspect, I feel like that’s such a powerful component of this that we don’t talk a lot about. But just the amount of data to your point you have, you have your payments running through this engine, you have the bank account, you have so much data there that you can make – you meaning Maast or your customers can make really smart, intelligent decisions about what products to offer. And when and under what terms, it just seems like capturing that data is just a huge part of the success of this.

Ernie Moran: It really is. It’s just like, just like so many other industries, data is the key. With data, you can do some amazing things, imagine you’ve got data from the payments, revenue, the payments flows, who they’re selling to, you’ve also got the bank account and the deposits that are flowing into the bank account, you’ve got the debit card spend off of that bank account, now you’re able to get a full picture. And in combined with the data of the software provider who maybe is focused on inventory management or payables, you can take all of that data and you can start de-risking additional offers that you want to make to the business customers. And in the end, that data and that capability to de-risk your offers means that they’re going to get better economics for the services that you’re going to be able to provide them. So, take lending as an example, you now have the ability to provide them better terms, so that they can grow their business, because you’ve got data that says that this is a customer that we can ensure we’re going to have a return on that is super powerful. But there’s so many other cool data examples. We talk internally, you know about some crazy ones, but they’re not so crazy. They look like magic now. But there, they won’t be magic shortly, you know, like imagine a world where software for a mom and pop candy store notices that the revenues are up, but the owners are still working 80 hours a week. And so the software automatically provides an offer of working capital back to the owners so that a clerk can be hired, while at the same time providing five recommendations through their embedded HR solution. Like it looks like magic now. But pretty soon, it’ll just be commonplace to those software providers that really embrace the data and the full suite of services where they capture all of that value.

Greg Myers: Yeah I’m sure we could talk about tons of use cases and some really cool things, literally. So, we’re talking about software companies, but there’s a huge part of the payments industry that not many people are talking about when it comes to embedded payments. And I don’t want to, you know, kind of just go through this whole interview and not talk about it. It’s the ISO world, right? It’s the independent sales organizations which have been around as long as payments have, I think so what is this trend towards embedding products mean to that segment of the payments industry?

Ernie Moran: Yeah, I’m really glad you brought up – the ISOs because I’m a big fan. Just like how embedded finance helps software providers focus on what they do best within their industry, vertical. Embedded finance is going to be helping ISOs focus on their core business and deepen those relationships. With every successful ISO that I’ve worked with is a relationship company. They get to know an industry better than most, they connect with those decision makers who have the foresight to grow their businesses, the smart ISOs are already recognizing that they can distribute a wider array of solutions by partnering with embedded finance providers.

Greg Myers: Yeah, definitely. And I’m sure you’ve heard this too, “the death of the ISO” I mean, how long have we heard that? And to me they haven’t gone anywhere but do the ISOs get disintermediated in this?

Ernie Moran: To me death of the ISO you can mark that one right up there with death of cash, you know, it’s been, we’ve been talking about it for decades now. Listen, ISOs have a critical role going forward, full stop, they already specialize in payments. I mean, the smartest people in the industry, regarding the intricacies of payment acceptance are in the ISO space. And before long, there’ll be specialist in embedded finance products too. So, add that trusting relationship they have with business owners, and in those verticals, and the understanding of the unique needs of the variety of industries, and they’re going to remain relevant, far into the future. So, do they get disintermediated? No, they actually have a real opportunity here to provide even more value to their existing market. So, I’m a big fan.

Greg Myers: Yeah I tend to agree, I think the days of thinking about an ISO as someone who has the hardware in the trunk of their car, and they go down the strip mall center, and just try to sell merchant processing, I think those days are long gone. But I agree with you the ones who are that have a vision and really want to grow their business and stay up with the trends in the industry are going to figure out how to make it work.

Ernie Moran: I agree, I don’t know any of those anymore. The ones I know, are really brilliant individuals who understand the industry, they understand those intricacies. And they’re taking advantage of it by providing value to the customers that I’d say a lot of the traditional payments providers, or even some of the kind of disruptors out there, they just don’t have that level of expertise or desire to provide that level of expertise into that customer base anymore. So, you know, from a knowledge source, they truly they provide just absolute tremendous value.

Greg Myers: Yeah, I completely agree. Well, let’s step up a level from software companies and ISOs to just kind of the payments industry as a whole. So, what do you what do you think this trend towards embedded finance means to the overall payments industry?

Ernie Moran: Well, as I mentioned, I’ve been in traditional payments for a long time. So, I’ve seen it from the beginning, practically, I would say to the traditional payments provider out there, it means innovate or get left behind. And maybe that’s been being said for a long time. But it couldn’t be more of the case now than any other time. Because here’s where it comes down to the value to a software provider of true embedded finance is so compelling, that there’s absolutely no room for organizations who are focused on selling traditional payment services. So many organizations are playing catch up right now, because they’ve already experienced the impact from just embedded payments. So is embedded finance offerings, like what we’re doing at Maast become more widely available, the impact to traditional payments just grows. But at the same time, with that warning, it also means a tremendous opportunity for the payments industry to really lead this new era of embedded finance. What I like about this, overall, the embedded finance and what it means as well is to the business customer, you can’t stress this enough this real value that it’s providing to the business customer. It’s you know, a seamless, white labeled experience under the software providers brand can just really help increase operational efficiencies, lower costs, so many things so much value to those business customers. So embedded finance is a tremendous opportunity across the payments and finance spectrum in this traditional payments industry.

Greg Myers: Yeah, totally agree. So what does the future of embedded finance look like?

Ernie Moran: Well within a few years, I truly believe that business owners will look to their primary software provider, be it an ERP, vertical SaaS marketplace, whatever, for the majority of their financial products. You know, today’s practice of procuring financial products directly from multiple sources, will really be as odd of a concept is building a website and then picking up the phone to call your bank to ask what solution they offer for ecommerce. It just it doesn’t doesn’t happen. As as a business owner, why would I spend valuable time away from my customers? When with a couple clicks of a mouse I can get my payments, my checking account, my debit cards, credit cards, funding, you name it financial services from the software provider who is most important to the operations of my business where most of my trust is, the short answer is they didn’t look to their software providers for all of those financial services 15 years ago. If a business or business owner needed payments, where did you go? You went to someone that sold you a terminal, you went somewhere where they sold you a separate product separate from your business because you needed payment acceptance. Nowadays, you wouldn’t dream of following that same process. Where do you go? You go to your software provider with financial products. And in a few years, it’ll be exactly the same.

Greg Myers: Yeah, I love that. I love that vision explanation that kind of gives you that visual and makes it kind of come to life. Yeah, well, already, we’ve covered a lot of ground so far. Is there anything else you’d like to add before we wrap up?

Ernie Moran: Sure let’s talk about a few things software providers and ISOs who are exploring embedded finance should consider. One really needs to make sure that your prospective partner aligns with your goals, your prospective embedded finance partner. So, evaluate your current tech stack, your product roadmap and your customer base. Where are the gaps? Where are the gaps, where the hidden where’s the hidden revenue, the right partner is going to help you upgrade quickly, seamlessly and securely. They’ll provide a single integration. And they can even take control of underwriting compliance, security, support, and even marketing so you can focus on your core business and serve your customers better. Number two, are you both invested in your success? Embedded finance represents a very powerful profit opportunity for software providers, they should look for a partner willing to share in the economics of all financial services. And number three, is your prospective partner on the bleeding edge of risk management. You can’t talk about anything in FinTech without a focus on risk and compliance. A little hat tip, as business software focuses more on individual industries, a key differentiator will be who is best attuned to their customers. A singular focus on the user experience shouldn’t compromise critical data security and protection concerns. So, the right embedded finance partner should offer institutional grade compliance and risk management.

Greg Myers: Yeah, thanks for sharing those considerations. Very, very good way to wrap up this session. So Ernie, thank you so much for being on the show. I know your time is very valuable so I really appreciate you being here and discussing embedded finance today.

Ernie Moran: Greg, I appreciate the time I had a great time. Thanks for having me.

Greg Myers: Absolutely. And to all your listeners out there, I thank you for your time as well. And until the next story.

02:13 - About Maast & Ernie's Background

03:06 - Details about Maast

05:13 - Maast Differentiators

08:59 - Definition of Embedded Finance

11:50 - Products Beyond Payments

15:39 - Importance of Data

18:07 - Impact of the ISO Community

21:17 - Impact of Embedded Finance on the Payments Industry

23:08 - Future of Embedded Finance

24:48 - What Software Companies & ISOs Should Consider