Payments are often a black box, with most people merely observing money moving in and out of their accounts, seemingly by magic.
But behind the scenes, the payment ecosystem is a thing of nightmares, with tech stacks built in the 90s, dozens of different companies mashed together, and waiting 18 hours just to see if a piece of code works.
Today’s guest has a habit of explaining how the payment ecosystem works at any opportunity he gets.
Richie Serna co-founded Finix, a fintech that started as a payment infrastructure startup and gradually expanded into facilitating and processing payments. Finix has built its tech stack from scratch, which allows it to connect directly with any credit card network in the US market, where four payment processors have 80% of the entire market share with technology from the 90s.
Richie and I talked about all things payments, the product insights he gained from the industry’s history, Finix's business model evolution from enabling vertical SaaS to becoming a payment processor, and how payments will shape the future of software.
To date, Finix has raised more than 130 million dollars and processes tens of billions of dollars in payments.
Learn about fintech and payments today:
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🗒 Show notes:
[3:08] - How Paying for Your Nike Shoes Works
[13:11] - Why Payments Are a Black Box
[24:06] - Play Your Money Well
[34:45] - Take the Android Approach
[42:02] - How to Focus on the Right Thing
[59:18] - Payments Will Change SaaS
🧠 Key Takeaways
#1 Explain it in a Napkin: Presentations are the worst way to explain anything. Your audience is trying to decipher the slides and figure out how the different components integrate when they should be listening to you. Instead, explain it by drawing on a napkin or a whiteboard (depending on the setting of the conversation). That way, people can follow your reasoning as you speak, and don’t get distracted by information on the slide that you haven’t said yet.
#2 Know Your Industry’s History Inside and Out: Many things that seem broken now, have a reason to be the way they are. There’s a method to the madness. If you want to be able to fix it, you first need to understand its history. Study your industry deeply to understand how it came to be the way it is, and the solutions might come a little more easily to you.
#3 How to Prioritize: This simple process helps you decide what is worth your focus in your current stage:
Number the options of features and products you have
For each, calculate how much money and time it’ll take
Then, think about the unknowns that would make each one harder than it sounds
Look for people who tried it before and failed, and ask them what you’re missing
If you’re fundraising, how much will each option help you with your fundraising story?
😲You won’t hear this anywhere else
“Fintech has been this hot space for the last few years. But when I first got into payments in 2013, with the first startup I worked for, we struggled for well over a year to raise our Series A, and we were neck to neck with Stripe. In Hacker News, it was always us versus Stripe, and we were beating them consistently, we clearly had a better product. I talked to investors and they said ‘How many fintech companies have gone public? How many had massive exits? The last big one was Paypal in 2002’. There were so many barriers for people to be successful, that fintech as a whole hadn’t really been proved out. Then Stripe, Plaid, and a bunch of other companies started having success and more money started rolling in.”
🎧 Richie Serna, co-founder of Finix - Building the AWS of Fintech and How Payments Will Shape the Future of Software