GREG MYERS:
Hello, everyone, and welcome to the Leaders in Payments Podcast. I’m your host, Greg Myers, and today’s special guest is Phillip Goericke, the Chief Technology Officer at NMI. So, Phillip, thank you for being here and welcome to the show.

PHILLIP GOERICKE:
Hi, thank you. Really happy to be joining you today.

GREG MYERS:
This episode is part of our embedded payments theme, one of several topics we’re exploring in the Signal, where we cut through the noise and uncover what truly matters in payments in FinTech. Embedded payments have evolved far beyond the simple pay now button. Today they’re reshaping how software companies operate, driving automation, efficiency, and new revenue.

This episode unpacks where embedded payments began, where they are now, and what’s next. So, Phillip, before we dive into the meat of the conversation, can you give us a quick snapshot of your personal background, maybe where you grew up, where you call home today, a few things like that?

PHILLIP GOERICKE:
I moved a lot growing up. Yeah, that certainly shaped a bit of my personality, I think. But it was mostly in and or around the Austin, Texas area. But since then, really right after high school, I moved up to the DFW area. So I’ve been up here around, you know, 20 plus years. Today I live in Southlake, so go Dragons. Let’s go. Southlake Carol.

GREG MYERS:
Awesome. So, as you might remember, I’m in the DFW area too, up in Prosper. So, we have that in common for sure. So if you don’t mind, can you walk us through your professional journey and how you got to NMI?

PHILLIP GOERICKE:
My background’s kind of always been at the intersection of technology and business. I wouldn’t say I planned it that way, but that’s just kind of how it’s always worked out. And I’ve spent my career building and scaling software platforms. And I began that first as a software engineer writing code, designing systems and applications, and then sort of transitioned to leading product and technology teams.

That journey’s really led me to where I am today at NMI, where I serve as CTO. And my mission is to make the complex world of payments, and boy, is it complex to make that world feel invisible and intuitive so that our partners and their end users can have a great seamless experience.

GREG MYERS:
Well, if you don’t mind at a high level, can you tell us what NMI does?

PHILLIP GOERICKE:
Yeah. So, NMI is a payments technology company, and we’re powering payments behind the scenes for SaaS platforms, ISO payment providers, and the like. And we enable software companies to embed payments deeply into their products, not just as a transaction layer, but as a strategic growth engine. And we have a pretty significant scale. We’re powering over $400 billion in payment volume. And we focused on making it easier for software companies to launch and scale and monetize payments.

GREG MYERS:
Okay, great. So just to level set for this conversation, can you give us your high-level definition of what embedded payments means and why it’s so important to software companies and ISVs?

PHILLIP GOERICKE:
Yeah, good question. Embedded payments means that the payment experience is woven directly into the software workflow, into that system. It’s not a handoff where your customer is using a separate terminal or a separate website to go and do payments. The customer never leaves your application.

For software companies, that’s critical because it drives automation, it’s improving and streamlining user experiences and unlocks entirely new revenue models. So instead of just facilitating payments as like a person in the middle, if you will, they become a payment provider. And you’re able to capture residual revenue and strengthen your customer attention. Gives you a lot of control over the experience.

GREG MYERS:
Okay, great. Makes a lot of sense. So, let’s dive in and talk about embedded payments from a technical or product perspective, which I know you’re very passionate about. So, in your view, what was the minimal viable embedded payments model when NMI first started and how has that model evolved over time?

PHILLIP GOERICKE:
Gosh, the NMI has been around a long time, well before I’ve been here, you know, 25 plus years. But if I were to say, like boil it down, like back in the day, I’d say the MVP was simple checkout, you know, transaction enablement. But fast forward to today, and it’s a fully integrated life cycle of payments. So, when the embedded payments concept sort of first emerged, that MVP, I think, was just being able to take a card on file inside your application, which was great, right? A very simple checkout experience.

Today, though, it’s really delivering that full financial infrastructure from modern merchant onboarding, instant underwriting, automation of payout, real-time analytics, embedded financial services, all of that without ever leaving. So, payments has really gone from being a feature to being this foundation, and there’s just so much more expected as table stakes functionality today than it used to be.

GREG MYERS:
Yeah, and I think that’s an important point that some people I think kind of skip over as they think about it’s the payment, but there’s more than just the payment, right? You have, like you mentioned, you have the onboarding and the compliance and you know, all of those things that have to happen as well. And I think, you know, if I can put words in your mouth, NMI has sort of built all of those tools that enable these software companies to be able to do it in one place.

PHILLIP GOERICKE:
Yeah, you got it. I mean, that’s really what makes us special, is that we’ve got everything you need from an entire payments lifecycle, start to finish, sign up to payout. And it’s all bundled together in an easily consumable way.

GREG MYERS:
Well, as these software companies or platforms that are using embedded payments, as they start to scale, and that could be scale in volume, that could be scale by going to other geographies. You know, what are some of the bottlenecks or failure points that you’ve encountered?

PHILLIP GOERICKE:
Payments is a complicated ecosystem and it does, it spans so many disciplines and things to solve for. But I think one of the first big bottlenecks that you’ll see is commonly in the onboarding and KYC delays, right? And as your platform scales, the what you do today, maybe manual underwriting and your manual compliance, they often just don’t scale with them. And that can really slow things down and make for a pretty frustrating experience, both for you and your customers.

I think another one that I think about is just supporting that global and even regional expansion. As your business grows and you’re looking to support multi-cult multi-regions, multi-u-countries, managing local payment methods and compliance and global regulations, you know they’re different globally and regionally. California has different rules in Oklahoma, of course, cross borders, payout requirements, those get tricky and complex really fast. And then lastly, I’d say many platforms underestimate the data aspect, the data side of things. Because if you can’t see and act on payments data, you are leaving growth opportunities on the table. And you’re gonna struggle to identify and manage risk on a go-forward basis.

GREG MYERS:
Okay. And some of your clients will want deeper customization while others kind of want that plug-and-play simplicity. So, how are you, you know, how do you architect for both extremes without causing a lot of complexity?

PHILLIP GOERICKE:
This is one you’ve got to be very thoughtful about. I think we can pat ourselves on the back here. I think we’ve done a pretty good job here where it’s not so easy, but I think that it comes down to, from a design perspective, you’ve got to design for optionality, not complexity. And may that sound simple, right? And it’s easy to say, but you know, we approach this with a modular architecture. So, if a partner wants to be up and running in days, they just need to get up and going, they can drop in a pre-built no-code component that we’ve got and be off to the races.

But if they later need a deeper control, or they’re they’re already pretty sophisticated in payments and they want deep control out of out of the box and they’re willing to take that time, you know, that over whether that be things like the onboarding workflows or the user experience or the data, they can build on our low-code SDK solutions or even have full control with our API. So, we think of it as like no code, low code, and full control with API. And so we often find that our partners, in many cases, choose to get started quickly with one of our no-code solutions.

And then over time, as they figure out what they need to be doing and what’s important for them, they build out other functionality with deeper control that’s tailored to their needs. So, I think the key is that either approach is completely fine and correct. It just depends on where you are on your journey. And critically to that, these all run on the same platform. So, you don’t have to compromise flexibility for simplicity. And even maybe more importantly, is that you’re in control of that decision and timing.

GREG MYERS:
So do you see these software companies as having, I guess maybe it’s maybe it’s the size, maybe it’s not, but sort of they’re early in their development, they go with the real simple thing. And then as they grow, they may bring on a payments person or consultant or something, and then they kind of go deeper. Is that kind of what you see?

PHILLIP GOERICKE:
Yeah, 100% we see that. We see all shapes and sizes from, I’m a small company and I don’t have developers really to get going. You know, we don’t our we’re we don’t our business is a startup, right? Like we, maybe we don’t even have revenue yet. And the idea that we would invest developer cycles to go and build out some beautiful, you know, sophisticated workflow going to our APIs directly doesn’t make sense for them. And so they go with the drop-in, no code solution.

And then we see the big you know, enterprise kind of customers that they do have the resources to invest in that. So it’s really no one size fits all. You also find really mature companies that just want to get going very quickly while they build out their full control experience. So it’s it’s it we see it kind of all over the place. But yes, you’re exactly right. It kind of depends on where they are.

GREG MYERS:
And do you find that they typically have the technical resources to handle the integration?

PHILLIP GOERICKE:
They often are very quickly able to get up and going through our SDKs and that we’ve got great documentation and you know, our developer resources, plus our support. You know, we have got integration support and we hold your hand if you need, right? But we often find that our partners can, in many cases, get up and going pretty easily on their own. And again, when you get to the more full control, that just takes a bit more time and an investment to do a rich API full you designed the full experience end to end yourself. That just takes more time because you’re doing more.

GREG MYERS:
Well, let’s talk about the business side of embedded payments for a minute. So, embedded payments are becoming table stakes for some of the bigger software companies and ISVs. So, how does NMI differentiate itself in this kind of crowded space? And what are the motes that you’ve built around your business from a differentiation perspective?

PHILLIP GOERICKE:
I like this question. I think one of our biggest moats is that we’ve solved a ton of really difficult problems across the spectrum of payments. And we’ve packaged it all up into a truly modular platform, sort of that what you need when you need it approach. And as an example, our partner can start with just the payment processing use case, a no-code, low-code solution like we just talked about, and they can easily add services like merchant acquiring or fraud prevention or residuals management or tokenization, whatever, financing as they’re growing.

And when you combine that with NMI’s scale, which is a highly reliable and available platform, along with deep compliance expertise and our world-class support that has this partner first philosophy, we’re not just a vendor. We’re an extension of your business, we’re your partner in the truest sense. And that’s pretty uncommon. I think that’s a pretty, pretty great thing that differentiates us in this crowded space.

GREG MYERS:
So, in the sales environment, when you’re selling embedded payments to software companies versus you know traditional merchants, what are the biggest friction points or objections that you hear and how do you address those?

PHILLIP GOERICKE:
You know, I’d say one of the more consistent sources of feedback we hear are concerns about sign-up, boarding, and integration complexity. Because it is, it is, we’ve abstracted a lot of stuff behind the scenes. And you know, we’re always investing in how to make that better. And we’ve invested heavily in tools and SDKs and documentation to kind of get as close to that plug and play as possible. But we’re constantly investing in improving these experiences. I mean, heck, the main theme of one of our three strategic imperatives is about this.

So we’re taking it very seriously and releasing several enhancements so far this year already. And I’m really excited about releasing even more transformational partner and merchant experience improvements next year. There’s a lot that we’ve got on there. I’d say risk, Greg, is another concern. We handled so much of the heavy lifting on underwriting and compliance and monitoring. And we spent a lot of time helping partners model and understand the revenue upside, the value prop of it all. So, they see payments as a growth driver, not a distraction. Does that make sense?

GREG MYERS:
Yeah, absolutely. And it’s you know, it’s something that I hear that software companies have, I guess, matured to understand better where to find the revenue, what are the things they can do to enhance the revenue. And then a lot of them, it’s about the client experience, right? What are they, what’s the experience they’re allowing and you know, who takes on the risk and who takes on the different aspects of it. So it sounds like with NMI’s kind of modular platform, they can plug in what they need and when they need it.

So when you’re thinking about designing and positioning that modularity that we’ve been talking about, how do you do it so that partners can take advantage of it, you know, without feeling, hey, I need to build something, you know, this from scratch, and then there’s this other module from scratch. And I mean, it’s probably a very technical answer, but I’m curious, you know, how do you do that so that they don’t feel like modularity becomes something they’re rebuilding every time from scratch?

PHILLIP GOERICKE:
Yeah, you know, I think of modularity a bit like building blocks, like Legos, if you will. And you don’t have to rip out your existing tech or commit to some significant massive migration. You start what solves your immediate problem, and that’s the modularity aspect of it. And, you know, maybe that’s merchant boarding or maybe it’s payment processing. I don’t know. It depends on where you are. You expand as your strategy evolves. So that flexibility is a big reason partners choose NMI over all or nothing monoliths.

You know, there’s these platforms where it’s like you’ve got to use everything or nothing at all. And I like to think that we’re an all-in-one platform, but with optionality to meet you where you are. And again, you can choose everything we’ve got or just one thing or some combination. There’s an infinite number of permutations that you could do. Well, not infinite, but a significant amount of ways you can combine things. It helps with that modularity and getting to what you need to do without having to rebuild everything from scratch.

GREG MYERS:
Well, let’s talk now about the future. So, this episode is focused on embedded payments, but many people, as you know, are already eyeing embedded finance, meaning financial products, others like lending, insurance, checking accounts. That’s kind of the next wave that’s coming. So, from a technical and product standpoint, what are the things or enablers that you’re building now that will support that expansion in the future?

PHILLIP GOERICKE:
I like this one. There’s a lot we’re thinking about and building for the next wave in embedded payments. And I actually like to think that we are, you know, we’re helping evolve payments and embedded payments, and we are on the forefront of that. Kind of what we just talked about a minute ago, one of the biggest bets that we’re making for the future is around partner and merchant experience. As I look at a lot of the options out there, this is a real challenge. The experience is not great.

Today, a lot of those embedded payment solutions are very fragmented and siloed, and you’ve got to log into multiple different systems, you’ve got to sign separate contracts, you got to integrate a bunch of different APIs that are kind of unrelated to piece together the functionality you’re needing. We’re unifying everything that NMI offers payments, onboarding, features like tokenization, data and insights, and new future services like business capital into a single modular platform experience.

And that means that our partners can access everything in one space and they can add the capabilities as they grow and design solutions that work either standalone by themselves or seamlessly together. And actually, I would say even better together because they build on each other and the data is helpful between them. Another foundational focus around this expansion is really enabling embedded finance.

And things like lending, insurance, or treasury, just as some examples, come down to three big factors that enable that identity, compliance, and data. Because you need to truly know your merchants and you’ve got to build compliance into the fabric of your platform and harness that transaction data so that it’s already flowing through your systems. And a great example of that in NMI is a product we’re launching later this year called Business Capital. It lets our partners offer embedded lending directly to their merchants without any credit check by using the merchants’ payment volume patterns.

Again, that’s that data we’ve got on all that’s happening there. It’s using that data and those trends that we have. That is the underwriting signal. And that’s really powerful because it shows how payments data can unlock entirely new financial services. All of these sort of embedded seamlessly inside of our partners’ software experiences that they’re offering. It looks and feels just like them. And honestly, I think this is just the beginning because once you’ve built those foundational capabilities, other things like work and capital, insurance, revenue-based financing, they can become natural extensions of the platform.

GREG MYERS:
Okay, so you mentioned it, so we’re going to go there. You said data. And when someone mentions data, AI comes up. We don’t specifically have a question. We were going to talk about AI, but I think it’s worth asking or at least exploring a little bit. You know, you have all that data. Are you using AI tools on top of that to make some of these decisions? And how is AI sort of playing a role in this?

PHILLIP GOERICKE:
We are very serious about AI and mindful of it and looking at it. What I would tell you is that we, you know, we’ve embedded AI into a lot of our internal operations, as I suspect most companies have. And we’ve been thoughtfully looking at how we can embed AI to our products. And we are, we are in the process of rolling out a product that has AI to help with those decisioning, you know, MCC code automation, things like that.

Where I’ve got my concern head on is that the current state of AI with these LLMs is this probabilistic sort of engine. And if you ask the same question 10 times, you get 10 different answers or eight different answers, and two of them might be wrong. And that’s just not okay in pine, you know, mess with people’s money and you get it wrong some of the times. Just not okay. So I’ve got my cautious hat on if I can’t put on a product that’s AI backed that gets it wrong 10% of the time, 20% of the time. It’s got to be right 100% of the time.

And so we’re just making sure we’re very thoughtfully stitching it together with our existing data intelligence and insights that we have and automation and smart workflows and AI to augment that. And you know, building out MCP servers that can be trained on our existing knowledge and data and workflows, and then just that way it reduces the probability of AI getting it wrong.

GREG MYERS:
So as platforms or software companies embed payments even deeper, and we talked about this a little bit, they potentially take on more risk, and it could be fraud, it could be regulatory data privacy. I mean, all of those are risks that companies have to deal with. And then, you know, even more if they’ve embedded payments to the point where they want to take on that. But what are some innovations or solutions that you’re excited about, or maybe even investing in around helping these companies around that kind of risk aspect?

PHILLIP GOERICKE:
Yeah, I mean, you’re absolutely right. As payments become more deeply embedded in software platforms across the world and these platforms scale up that surface area for risk and attack, it just expands. So it’s not just about fraud anymore, it’s regulatory complexity and solving that and data privacy and how do you verify identity of your merchants and people using the platform and ongoing compliance. So the key is turning that challenge into an enabler for scale.

And I was kind of just talking about this, but you know, an area I’m pretty excited about is how we are combining our existing stuff like data intelligence, automation and workflows with AI to get ahead of that risk. You know, we sit at the center of so many payment flows, as I know you know that, but but we’ve we’ve got really rich insights into transaction patterns, the behavior that our merchants, our partners, merchants are using, and even anomalies that are happening at like a global scale, stuff that happened in Oregon that also happened in Florida, we can kind of piece that together and detect like a signature.

So we’re investing in systems that can proactively flag this kind of unusual behavior and even dynamically adapt to fraud, fraud thresholds and prevent the bad actors before they enter an ecosystem. And we can do all that without adding any friction to the user experience. So look, we’ve been building compliance as a service, those capabilities directly into our platform. And that’s a big problem to solve for partners, isn’t it? If you were having to solve these things for yourself and being left to, hey, good luck, go and figure out how to navigate KYC, AML, PCI, insert your three-letter acronym here, right?

We’ve abstracted that complexity into our infrastructure. And that means that you can scale globally and you can onboard merchants faster and you can stay compliant by default because we’re solving that problem for you. And maybe finally, and importantly, on this, on the transaction side, we’re leaning heavily into technologies like network tokenization and 3D secure. Like if I’m not sure how everyone is with the audience here with you know tokenization, but tokenization is amazing. Like it reduces fraud, improves your approval rates by replacing those static card numbers that can be stolen and you know, taken used with fraud, and replaces those with dynamic secure tokens.

And they’re kind of meaningless without the backing of what that token means, translating that. And then 3DS, that’s adding an intelligent authentication layer that steps up verification when it’s needed. Like maybe there’s a suspicious transaction or a high-risk geography. You can really dial up that verification, but it can also be invisible when it’s not needed. So by combining these, they make payment safer and smoother for the end users, and they also reduce fines and fees and burden for our partners. So we really don’t just see risk as a blocker, we see it as a catalyst. And if we can handle it intelligently behind the scenes, our partners can focus on what they do best, growing their business with confidence.

GREG MYERS:
Well, I’m glad you brought up the network tokenization because we’re going to actually have an episode during the series on tokenization. So, we’ll be doing sort of a deeper dive into that. So, I’m looking forward to learning more about that. But Phillip, this has been a great discussion so far. And, you know, kind of one final question. When it comes to embedded payments, what’s the one idea or mindset that you hope the listeners will take away from this conversation?

PHILLIP GOERICKE:
One mindset. I’d like you to take away that embedded payments, it’s not just a technology choice or a cost center. They’re a business model decision. And the companies that win are the ones that stop thinking of payments as I got to bolt on this feature just because I’ve got to take payments. And you start treating it as a strategic lever for growth and innovation and retention. So that’s what I’d like to leave you with.

GREG MYERS:
Well, Phillip, thank you so much for being on the show today. I know your time is very valuable, so I really appreciate you being here today.

PHILLIP GOERICKE:
I enjoyed it. I think it was a great, great topic that you brought up, some really good questions, things I’m particularly passionate about. And I just I’m grateful for the opportunity to chat with you today, Greg. Thank you.

GREG MYERS:
Thank you. And to all your listeners out there, I thank you for your time as well. And until the next story.