What is Open Banking and How Will It Impact Your E-Commerce Business With Kieron James

Episode 215

Unlock the door to e-commerce mastery with our inspiring guest, Kieron James, as he traces his exceptional journey from web design to his innovative role in the domain name registration arena. With a keen eye for strategy and a heart for entrepreneurship, Ian’s story isn’t merely a personal saga; it’s a blueprint for aspiring business moguls seeking to chart their own paths in the dynamic world of digital commerce. His candid discussion on the importance of automation, the art of SEO, and the value of exceptional customer experience serves as a beacon for those eager to learn the ropes of online business success.

Prepare to have your perspective on payments transformed as Kieron James, CEO of Wonderful, leads us through the promising landscape of open banking. This episode peels back the layers on how this technology is reinventing financial transactions for businesses and charities, offering a glimpse into a world where high card processing fees become a relic of the past. Ian’s journey through the challenges of establishing a fundraising platform to pioneering a payment processing solution reveals the untapped potential of open banking to significantly impact the way we handle money.

Lastly, we examine the tangible benefits of open banking for small enterprises and nonprofits, with Ian bringing into focus how instantaneous transactions can breathe life into the daily operations of these organizations. He shares how his payment processor, Wonderful, is carving out novel pathways in the UK’s commercial sector, buoyed by the success with charities. We wrap up by spotlighting the human side of entrepreneurship, from Ian’s favorite reads to his views on corporate dynamics versus startup agility, and the crucial traits that define a triumphant entrepreneur. Join us for this compelling episode that promises not just insights but a roadmap to thriving in the e-commerce and fintech arenas.

How can the guests contact?  website, email, social?

Website: https://wonderful.co.uk/

Instagram: https://www.instagram.com/kieronjames

Linkedin: https://www.linkedin.com/in/kieronjames/

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00;00;24;01 – 00;01;00;15
Unknown
Welcome, everyone to the Firing the Man Podcast. On today’s episode, we have a privilege to interview Kieran James, an entrepreneur with 30 years of experience in launching and scaling startup businesses in the technology sector. Mr. James is the CEO and founder of Wonderful, a company that provides simple based, insecure, instant bank payment technology. On today’s episode, we are going to dive deep into Mr. James extensive background in entrepreneurship, which includes starting scaling and exiting nine businesses over the last 20 years, including two Nasdaq listed corporations.

00;01;00;16 – 00;01;25;27
Unknown
We will also learn about open banking and how merchants in e-commerce can use open banking to generate huge savings by this platform. At just one penny per transaction. We are very excited for this show. Welcome, Mr. James. I thanks. Thanks, David Kelly. Okay. And great to meet you. Thanks for having me on. Absolutely. So to start off the episode, can you share with our listeners a little bit about your background in your past in entrepreneurship?

00;01;25;28 – 00;02;00;12
Unknown
Yeah, certainly quite a circuitous one, but I got started in my own business in 1998, and it was having worked in teaching prior to that and for a UK trade association prior to teaching. So kind of very odd route into into kind of e-commerce. But 98 I was working in a training institute in the Middle East, running a training institute, and it was a kind of strange arrangement between the UK and the Omani institute owners, which ended up with a lot of the stuff not getting paid and me heading home with my family.

00;02;00;12 – 00;02;17;07
Unknown
One of the last things I did in the training institute was start looking, get some marketing plans for them. In 1990 they were asking me to put together a PDF to do some marketing and I was thinking probably we should be looking at the internet. So I started building a mini website. Got back to the UK. That job was over.

00;02;17;08 – 00;02;36;11
Unknown
So it wasn’t so much firing the money, it was more the mum being fi. It all made redundant at the very least. So I came back really thinking, What can I do? You know, I’ve got no job, got no money. But I felt like I wanted to do something on my own. So it was a quick trip down to the bank, tried to do it to get a loan for, I think, about £600 to buy a computer.

00;02;36;11 – 00;02;54;06
Unknown
And I thought the first and most obvious thing that I should do is probably start a web design business. I guess the rest of the UK in 1998. But hey ho, that’s how I got started. So here on let’s dive a little bit more into your experience in lodging and scaling and you exited nine businesses over the last 25 years.

00;02;54;06 – 00;03;27;27
Unknown
So let’s chat with the listeners about some of the common threads that have led you to be able to not only lodge an in scale but also exit nine businesses. Is there anything in common that you’ve kind of isolated? Definitely. And it is a range of different areas. So just one but that 1998 Web business. So I started off doing the design and and quickly had a need for domain name registration because obviously all my clients 15 websites, we wanted to register domain names for them and that’s how we started to get into, you know, the mass market side of things.

00;03;27;29 – 00;03;42;21
Unknown
So I teamed up with a company based in the North East in the UK who owned the domain name, domain names dot com and they they to the time they registered, they weren’t even sure what they wanted to do with it. So they started off by registering a few domain names and and using as an after sales market really.

00;03;42;21 – 00;04;02;19
Unknown
So not cybersquatting but general names and then you know it might be accountancy dot com or something similar to that and then seeing whether there’s a market for them I think then quickly realized that integration with no minutes in the UK and network solutions as it was back in the day meant that they could resell domain names you know a brand new a point of registration.

00;04;02;19 – 00;04;20;02
Unknown
So that was my first kind of dip in to this sense of if we can automate something, if we can make that process slick and easy, that makes for a very good business and it’s all digital. And I think that’s been a recurring theme for me. It’s one of stick to the knitting, I guess it’s what I know.

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00;04;20;02 – 00;04;50;02
Unknown
But whether that’s been in telecoms, in domain name registration and company formation and then latterly in payment, it’s all for me about, you know, digital products we have ventured into doing some physical products actually came probably back in 2004 2005. We started an online zig an amp for Christmas business and because it was so nation and I guess, you know, this predates social media and everything so a good search engine query, you’d end up on our website.

00;04;50;03 – 00;05;07;26
Unknown
We were overtaken by demand and I found that really, really difficult to cope with, that we were actually having to, you know, find suppliers and so start couldn’t get it out in time. So we were busy packing hampers and doing all sorts of things right up until Christmas Eve. So that was my lesson learned. I’m not really great in that kind of space, so I’m sure Excel.

00;05;07;26 – 00;05;27;12
Unknown
But for me, if it’s digital, if it’s zeros and ones, that’s where I think I’ve performed best. And then in terms of the common threads, can I think again, it’s worked well to focus a lot on, on a couple of things. One is being found. So again, going back to 2000, early 2000 search engine optimization was a lot more straightforward than it probably is now.

00;05;27;12 – 00;05;54;29
Unknown
But that was a key to the success, making sure that we were highly visible, I think them from being found. It was a case of and I now sourced this service quickly and easily. So what’s that user experience going to be like from clicking this, the search result on Google through to actually completing a purchase? And we’ve worked really, really hard on that through all the businesses trying to scale with as little contact with the customer, you know, in terms of telephone calls or that level of support as possible.

00;05;54;29 – 00;06;19;26
Unknown
So allowing them to self-serve through good UI, through good PDF support back in the day, now using AI and so on for some of those aspects. But how can we get that customer from that first search and in its search engine result through to purchase with at least as minimal touch as possible? I really like that. That’s it’s simple it’s lean and it’s fast it’s it’s yeah automated and a great process and so thanks for sharing that.

00;06;19;26 – 00;06;37;14
Unknown
And one thing that Dave and I like to do on this show, I know a lot of shows don’t like to talk about failures, but I think as an entrepreneur, like we all have so many ideas that we’re spit it out, we’re trying and not all of them work. Everybody has to be honest and so are there any failures along the way that you’ve learned a lot from that you want to share with the audience?

00;06;37;16 – 00;07;00;15
Unknown
I think that the vision hampers was that was the standout, but there have been others. We tried to carry that on a thing. We go as far as Valentine’s Day and then it’s just sort of this wasn’t for us, you know, it was just one of those things and it’s knowing your strengths. I think the other thing that’s that’s important is knowing when you’ve got to pivot or indeed just hang up the boots and say, this isn’t working, nothing that happens, we’ll all have ideas.

00;07;00;15 – 00;07;20;24
Unknown
So we’ve had a number when GDPR was being introduced in the EU, we were looking at product ideas around based around data and so on. And again, we couldn’t really make it work. We came up with a couple of ideas, launched gently a product and then nice, This isn’t going to this isn’t going to pan out for us.

00;07;20;24 – 00;07;42;17
Unknown
So we backed out of that. And I think it’s just recognizing that it’s it never is a failure. It’s just another lesson learned. I think that’s a very, very strong way of putting it. Yeah, failure is kind of a harsh word. Lessons learned or the learning process is probably more like it. But do you have a is there like a tipping point or something that a light bulb that comes on whenever you’re like, okay, we’ve tried this enough, it’s not working.

00;07;42;17 – 00;07;59;27
Unknown
Let’s let’s take it out behind the bar and it let it rest. Like, is there a point where, you know, that’s not going to work? There is my background and I’ve worked with the same guy for all of these businesses for the last 20 odd years that mentioned domain names at the beginning. That’s how we got started, actually probably predates that in the publications business.

00;07;59;27 – 00;08;27;09
Unknown
So when I was teaching, he was doing educational publishing. He’s really strong on finance, probably stronger on business development, marketing and those kind of ideas. So we worked together really well as a team. So as a lightbulb moment, he’s my light bulb. And what I was saying many, many times when people ask, what’s the most important lesson learned or can you share a quote, I’ve no idea where this came from, but someone said to me, at some point in business, this this success is about being passionate and dispassionate in equal measure.

00;08;27;09 – 00;08;48;08
Unknown
And it’s something that I think is really important because if you’ve got the passion and the belief in a particular business idea and that often comes from starting something that you enjoy that you know, that’s I think that can be really, really important. A really significant ingredient in the success. So if I love yoga, do a saw yoga business, if I love making music, do I look at ways of selling that online?

00;08;48;09 – 00;09;19;04
Unknown
One of the problems with that, however, is that you can become a little bit blind to when that isn’t working because you’re so passionate about it, because you’ve got that now unstoppable belief that you don’t see. Actually, people aren’t sharing that belief and that passion for the thing that you love. So the dispassionate bit comes in the numbers, and I think the numbers just tell you black and why if it’s not working and it can be really hard and a really bitter pill to swallow, but sometimes you’ve just got to stand back, look at those numbers and be 100% objective and go, Maybe I love yoga, but maybe there isn’t a market for this thing.

00;09;19;09 – 00;09;37;06
Unknown
I’ve developed to help people do The yoga. Passion and dispassion in equal measure is the thing I would live by even now. I am glad I really like that. Well, because it is. Entrepreneurs are really optimistic and fired up on the front end of a process, and sometimes that momentum doesn’t stop even when it should. So I really, really like that.

00;09;37;07 – 00;10;07;03
Unknown
Let’s pivot a little bit and it folks are attention on e-commerce and in checkout optimization. So what trends do you see as shaping the user experience in online transactions in the coming years? big question, many, but I think there are a couple of standouts. I think e-commerce owners now store owners need to be very aware of omnichannel sales approaches and the link of that between social selling should be safer buying directly from Instagram or buying directly from Facebook or whatever it might be.

00;10;07;04 – 00;10;41;01
Unknown
I think those are really, really key trends going forward. I have been for a little while, but that’s going to continue. So making sure there’s a consistency in your approach, in your branding, in your messaging and everything across any different platforms that you’re using. I think that’s going to be really key and also an ability to again, going back to the discoverability piece back, I’m going to talk about search engine optimization is the same thing now on TikTok and wherever else it’s making sure that your content is visible is interesting, is relevant, but also critically, the path from that content to completing a purchase is really easy and friction free as well.

00;10;41;01 – 00;11;01;07
Unknown
So irrespective of where you’re finding that product or service, what channel that’s appearing on that process wants to be consistent throughout that message, wants to be consistent. And I think it’s one of the things that can get left behind a little bit. You focus very much on your own website in Messenger, messaging is up to date and relevant and you both posts rule up to date and so on.

00;11;01;07 – 00;11;19;28
Unknown
But that mission statement might have got a bit of out of date on one of the other channels. So it’s keeping all of those things really, really tight. I think the other one that we can’t ignore is I am clearly that’s here to stay. I was astonished actually, just a few weeks ago to hear that JPT was one year old because it feels like so much has happened both months.

00;11;19;28 – 00;11;42;03
Unknown
It’s extraordinary. But leveraging that, I think it’s again, for a lot of people, I guess myself included, 12, 14 months ago, it’s a little bit terrifying, but I think we have to be leaning in to that. And there are any number of ways in which e-commerce store owners can be thinking about how they can leverage and whether it’s from a customer experience point of view or helping with forecasts, whatever it might be.

00;11;42;03 – 00;11;58;26
Unknown
There are lots and lots of ways to deliver G content creation is an obvious one as well, though I think still I’d be I’d be saying using user as a jumping off point for content creation. Don’t rely on GPT to write your blog posts, but that’s my own. My only I’m sure there are many people who were using you very successfully to write blog posts.

00;11;58;26 – 00;12;17;26
Unknown
So Karen, can you share a story behind the inception of the wonderful organization and what motivated you to create a free fundraising platform? Another long, long answer to your question. Yeah, 2016 was my 50th birthday and it was also our 25th wedding anniversary. A couple of the kids had significant birthday, so it was a 21st and an 18th.

00;12;17;28 – 00;12;37;04
Unknown
We all as a family felt, What can we do to mark this year because there’s a lot going on. So I’ve been running for charity for many, many years, decided I was going to do the New York Marathon again in 2016, actually a little bit before that, probably early in the year, maybe even back into 2015. I was thinking, if we do this, how do we go beyond just running the marathon and raising some money?

00;12;37;04 – 00;12;58;13
Unknown
And I had this crazy idea of, well, let’s build the fundraising platform that supports all of the money raised. Emma Rationale for doing that was that I felt there was a space in the market. So was a little bit aspirational that you look at donors and fundraisers and charities and every day those people are getting up and doing wonderful things and we thought there’s a space in the middle of those for platform to be equally wonderful.

00;12;58;13 – 00;13;19;16
Unknown
How will we be? Wonderfully well will ensure that every single penny that’s raised goes to the charity with no deductions for anything. So this will be an entirely free service. So we set about building this and I was running a telecoms business at the time, and the engineers were super supportive. They gave up their lunch breaks and coffee hours and weekends and so on and and helped us build this platform.

00;13;19;17 – 00;13;36;14
Unknown
And we launched and we thought the charities were all going to come on in big numbers. But of course they were a little bit skeptical about our motivations. So that was a lesson that we learned quite quickly. You don’t just email cancer Research UK and expect them to go, this is fantastic. It’s free, let’s join. There are lots and lots of hoops to jump through and so on.

00;13;36;14 – 00;14;06;01
Unknown
But as we launched that platform, one of the things that became apparent very quickly was that the cost of running the platform was going to be prohibitive because it was launched the around processing fee. So that was a predominant cost in running the platform was the amount that we’re paying Stripe every month. So essentially we had to find a solution to that, which brought us to the business that I’m now operating, which is wonderful payments and that solutions in open banking, the route into getting started for it was an odd and very personal one.

00;14;06;01 – 00;14;35;00
Unknown
And again, it’s quite for me, it’s been a really important lesson learned that sometimes the best laid plans in terms of what you do in your business can be overtaken by something that comes along this entirely serendipitous, that creates an even bigger opportunity. So we had that lightbulb moment with a fundraising platform where we saw actually in solving this problem of the cost of moving money from a donors account to charities account, we can solve exactly the same problem in moving money from a customer’s account to a retailer’s account, reduce those costs massively.

00;14;35;00 – 00;14;56;13
Unknown
So that’s how we got started. And then it’s been a kind of interesting route in selling the telecoms business and moving all this stuff into a payments business. So before we before we kind of pivoted to the payment piece of this, can we go over more of the the wonderful organization and kind of some of the goals that you’ve set up for that as well as what are you what do you foresee the the organization, you know, the long, long term goals?

00;14;56;13 – 00;15;14;02
Unknown
We had one, one, one mission, and that was to be free for charities, completely free. So there will never be any costs in any charities using our service. That will always be the case. As I say, that became difficult with with credit card processing and debit card processing, but we’ve solved that particular problem. So we have this very low ceiling on our impact.

00;15;14;02 – 00;15;38;06
Unknown
Some reach that’s been removed, which now allows us to do lots more things. Essentially, if you think about it, we were funded through corporate sponsorship in the early days, so we undertook to be the first corporate sponsors, the telecoms business. Then we go to UK Bank to be a sponsor as that as the platform grew. And then we got to a point where actually we don’t need a sponsor anymore because the cost of processing those payments is actually so low that we can grow without one.

00;15;38;07 – 00;16;01;20
Unknown
So in terms of goals and ambition now is fantastic for us because we’re able to use the technology, open banking to do so many things moving forward for charities that we wouldn’t have been able to do before. We can serve many more for one, which is great. We’ve that ceiling is now gone, but open banking goes as well as the payments piece gives us ability to do lots more very interesting things with donors and charities.

00;16;01;20 – 00;16;22;13
Unknown
Let me give you one example. If you look at go to pay or donate to a charity at the moment on their website, very often you’ll see the same kind of approach, which is you’d like to make a donation today. Would you like to donate £25, £50 or £100? And there’ll be three things presented, three numbers present to you typically, and then maybe an option to two out of different amounts of your own.

00;16;22;13 – 00;16;44;07
Unknown
Those three numbers typically come from the charities doing lots of research amongst their donor base, but that’s still effectively a bit of a one way monologue piece. It’s the charity saying, here are three options. Choose one. What open banking allows us to do is say, actually, with the consent of the donor, we can use our accounts, information service permissions from the Financial Conduct Authority here to go.

00;16;44;08 – 00;17;03;00
Unknown
What’s the affordability like right now? What’s it like next month? What’s it like in three months and actually have much more of a meaningful dialog between the charity and the donor? So instead of just presenting those three numbers with one consent check we can get, actually, the affordability for you is probably around this kind of point, which becomes really, really interesting.

00;17;03;00 – 00;17;20;10
Unknown
I think a lot more 21st century in terms of that relationship. I’m not sure charities should be taking the approach whether they do or not or whether they admit to doing enough of the kind of gym membership subscription model of let’s keep taking £20 a month off these donors and hope we don’t disturb in too much and to carry on paying.

00;17;20;10 – 00;17;37;23
Unknown
Yeah, that doesn’t feel right now. It doesn’t feel like the right kind of relationship. So open banking, I mean, that’s just one example of how I think it allows us to provide better services. And so just a quick follow on there. I really like what you’re doing with that organization. I think that’s really, really cool and I wish you the best of success there.

00;17;37;24 – 00;17;55;14
Unknown
Okay, so now I’ll kick it over to David and we can kind of dig into the payment processing piece of this, which I think there’s going to be some very unhappy businesses and banks that are operating in the margins. They’re not going to want to hear this conversation, but I’m excited to hear it. So my follow up question is, is open banking, is this a concept?

00;17;55;14 – 00;18;15;01
Unknown
Is this what is open banking? Can you explain what that is? Okay. So open banking in the UK kicked off with the Competition and Markets Authority basically mandating the top nine banks to open up APIs for fintechs like ourselves, be able to do a number of things. I mentioned in that last piece that a little bit about account information services.

00;18;15;01 – 00;18;40;08
Unknown
So we’re using APIs with the correct consents in place. Obviously the people are sharing information with us, will consent to do that and they want to get something in return. But similarly for making a payment, you can provide consent for us as a fintech to take money from your account to pay it into another account. Now that’s a tokenized super secure payment and it’s a permission that we will have in place for about 5 minutes from you giving us authority to do that.

00;18;40;08 – 00;19;05;00
Unknown
So you’ve got to complete that. Once you’ve said, okay, can you want to give £10 to Cancer Research UK, give us your permission to do that. Now we’ll take £10 out of your account. What would happen then? And again, I’m guessing you’ll have a similar kind of thing in the US as we have here. So if you make that payment via a card you’ll often be asked to do nowadays is to make a confirmation and that might be through a one time password sent via a text message.

00;19;05;00 – 00;19;25;00
Unknown
Or it might be a link into your bank account to use your mobile bank account out to authorize that payment. EU Now that’s mandated for transactions over €30 in a number of circumstances. So what we have is this situation now where instead of going I’m at the e-commerce checkout, I’m about to pay, I’m being asked for a 16 digit card number.

00;19;25;03 – 00;19;41;19
Unknown
I mean, ask for an expiry date. I mean, ask for CV. I’m only being asked for a first line of address and is it cold? And I might be minus for a card holding down. I then make the transaction only to find that the next thing I’m asked for is to confirm that payment either using a one time password or in my mobile banking app.

00;19;41;20 – 00;20;00;06
Unknown
Now what open banking does is it skips all of that card entry and just goes, you’re about to make this payment. Will you confirm this in your mobile banking app? And that’s essentially what we would do to a person making a donation or making a purchase. We just tell you you want to pay £10, select KeyBank, you select your your bank in the UK, just tap on that.

00;20;00;06 – 00;20;21;25
Unknown
That would open your mobile banking app. You would say, right, you going to pay £10 to Cancer Research UK or you’re going to pay £10 to whatever vendor it happens to be and you’ll just authorize that in exactly the same way as you would with a with a strong customer authentication on a card payment. So really, really simple cutting out lots and lots of data entry, which can be either fat fingered or lost or compromised or whatever else.

00;20;21;25 – 00;20;42;26
Unknown
It’s just cutting that all out and going straight to the bank. When you think about it, in the majority of uses of a card, i.e. a debit card, which certainly here is the majority of card transactions, effectively, that’s all the debit card is doing. It’s allowing you to move money from one account to another. It’s just a 60 or watch the debit card slightly, slightly shorter, maybe a 30 year old method for doing it.

00;20;42;26 – 00;21;07;18
Unknown
Interesting in there’s typically fees that are associated with that from I’m understanding, open banking. Now, if you think about the card transaction, you’ll have up to 14 intermediaries or middlemen taking a slice of that pie, which will be, you know, in the range of in the UK, typically 20 PPI per transaction and 1.4%. And we look at that and we say, here’s my analogy.

00;21;07;18 – 00;21;24;27
Unknown
If you if you’re making a payment 20 years ago and that payment was for £50 and you put a check in a post and stick it in an envelope and sent it to somebody, you look at the cost of a first class postage stamps and UK that will be broadly equivalent to the cost of processing that £50 payment.

00;21;25;03 – 00;21;43;17
Unknown
That’s fine. That will make sense. Now, I’d say that check out of the envelope and a put a check in the envelope. That’s for £5,000. If the Royal Mail in the UK said actually not need to put a stamp on the envelope, that’s for 120 £220, we’d be astonished, shocked and disgusted. And yet that’s effectively what’s happening with card transactions all the time.

00;21;43;17 – 00;22;01;01
Unknown
So all of you coming into this was to be super transparent and fair. You know, we want to make we want to make a charge for making that transaction, but that doesn’t have to depend on the value of the transaction for us that revenue to use a small business is earning, These are their revenue. It’s not always just to take a piece off because we can’t.

00;22;01;01 – 00;22;30;12
Unknown
I love that analogy that really makes it click for me. I really like that. So thank you for that. How did you discover open banking in this solution and what do you think is going to be the impact over the next few years? The discovery was made in the first three or four weeks of Cogat, so I mentioned we were running a telecoms business at the time and we were providing all of the wonderful to all platform completely free, but actually effectively seconding telecoms staff to operate that platform free of charge.

00;22;30;12 – 00;22;51;24
Unknown
When COVID came along and Boris Johnson announced a lockdown in the UK, the next thing that happened was our telecoms business. We run a free telephone conferencing service as part of that service, which was used by the National Health Service in the UK. And many, many of us can imagine we get an announcement and literally within 14 days the capacity on our telecoms network went up by 20 fold.

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00;22;51;24 – 00;23;08;09
Unknown
So we looked at the platform that we were running for the conference two service, we looked at the platform that we were running for the charities and we thought, Something’s got to give here. We can’t possibly manage both. We’re small team. Let’s just pause the fundraising platform for now. Concentrate on providing telephony services because that seems really, really crucial.

00;23;08;10 – 00;23;28;19
Unknown
Three weeks in, I then made a donation to somebody on LinkedIn who was having their heads shaved during lockdown for charity, and that donation was made using open banking. And we reached this point just prior to effectively closing the platform, albeit temporarily, we were thinking we’re going to have to tackle this problem of card processing fees and we’ve got no idea how we’re going to do it.

00;23;28;20 – 00;23;48;02
Unknown
Having made this payment, this donation via a link on a linked in post that was so quick, so straightforward and unbelievably easy, I got in touch with the provider and said, you know, how is this working? And they said, okay, so the open banking powered. And we said, we need to talk. So that’s really how we discovered it was three first time use in the platform.

00;23;48;05 – 00;24;08;26
Unknown
So well, not in the platform. It’s one of the old. But then as soon as we made that, I’d made that donation, it was like, this is the way that we we get the platform back up and running and reduce our cost massively. So it was a it was a real world experience. And we basically replaced the card processor instantly reopened the platform exclusively using open banking and then set about getting our own authorization.

00;24;08;26 – 00;24;29;12
Unknown
Interesting. And so are you still working on the telephony piece, open banking piece, or have you switched to the just the open banking now? Yeah, So that’s the funny business. I mean, that was again, quite, quite instrumental in going back to that serendipity point earlier. I think we just realized, you know, we were in voice telephony space. How often do you see people making phone calls now or receiving them?

00;24;29;12 – 00;24;47;20
Unknown
So the mobile phones are being used for entirely different purposes. And there’s that moment, again, when you go back to the passion dispassion, when you go this business, it’s probably got some life, but it’s not going to continue growing. What do we do with these very time to people? Here’s a new opportunity that’s come around through open banking and we it the entire stuff.

00;24;47;20 – 00;25;10;07
Unknown
Barring one who was a real specialist until after he and the acquirers wanted him, everyone else came just to wonderful payments and that business was born. That’s interesting. Yeah. And personally coming. I worked to Stephanie earlier in my career with 16 kilobits phone lines, and so I transitioned to optical networking. And so I kind of I understand the transition there from from a legacy technology to a newer one.

00;25;10;07 – 00;25;24;25
Unknown
So let’s pivot. Let’s talk about open banking in the future and kind of where it is now. You had talked quite a bit about in the UK. Let’s talk about what do we think it’s going to be like in the future and that also is it like that in the US? Is it going to be like that? Do we know?

00;25;24;25 – 00;25;43;07
Unknown
There’s been an interesting journey that has been happening in in the countries that were adopted, open banking and it’s one from it’s taking us from open banking into open finance and then to open data and people talk about open everything. So just the potential that we’re seeing now is growing massively. I think we’ve seen significant growth in payments.

00;25;43;10 – 00;26;08;22
Unknown
I talked earlier about the the account information services and the number of queries that were happening through those APIs always exceeded on the accounts information service side. It always exceeded the payments queries that were happening and actually they’ve now crossed quite recently and the growth that was sending payments is absolutely huge that I think was definitely the incentive and the growth around that was through that Monday regulatory mandate of the CMA.

00;26;08;22 – 00;26;30;04
Unknown
Nine banks in the UK, you know, had they not been required to do that and open the open their APIs up to fintechs like ourselves, I’m not sure we’d have seen the growth that we’ve seen. So that’s been instrumental. And now the other banks will be following suit. So we’ll soon have coverage. We’ve got coverage of about 90 odd percent now of people who are bank accounts, but the remaining 10% will follow in the U.S..

00;26;30;04 – 00;26;55;05
Unknown
I think we’re slightly behind in terms of that regulatory mandate, but I think that’s that’s happening. And I think you’ll you’ll see very soon the same kind of progress that we’ve seen in the EU and in the UK. So that’s on its way. And just to kind of talk about, I guess, the impact of this, so like our our e-commerce store on our own website, we use straight to process payments and I’m going to lie, it’s probably in between 2% to 4% that we’re paying Stripe.

00;26;55;05 – 00;27;20;29
Unknown
I’m not exactly sure where that’s a substantial amount of money. And so what will happen in the U.S. when when the open banking comes in and will that completely go away? Will will Stripe not charge fees where there will be new providers? What does that look like? But it’s a very big question and a really important one for for open banking we talk about at the moment is the fact that open banking for an e-commerce provider is not this or that solution.

00;27;21;02 – 00;27;39;05
Unknown
So this and that solution. So we wouldn’t be asking anybody to do what we did with wonderful dot org, the fundraising platform where we just said, no more stripe, no more cards. What we’ll see, I think is this approach at checkout. So if we look at our integration with WooCommerce, for example, you can in the UK use wonderful to make payments.

00;27;39;05 – 00;27;55;14
Unknown
We will commerce in the same way as you would when you get to check out with a card. You can select card provider, be that stride, be that whoever it might be or you can select wonderful. The motivation for the retailer is really strong because it is, at least in almost every scenario he knows it’s probably even more than this.

00;27;55;14 – 00;28;22;15
Unknown
But he’s going to be north of 80% savings with us. We’re quoting 97%. So it isn’t literally a penny a transaction. So for £9.99, we’re giving you a thousand transactions a month of any value in theory. So I think that’s going to be really instrumental in driving adoption because what can merchants do with that money, those savings? Well, they can put in place their own loyalty schemes so they can use those to fund those savings, to fund all sorts of things.

00;28;22;15 – 00;28;49;07
Unknown
And again, another analogy I like to share a lot of the time is it’s okay the encouraging people to use a credit card to get a discount, a VIP lounge at an airport. But what benefit does that actually give to the merchant? Not all it’s doing is really increasing loyalty for the card provider, not for the merchant. So if I can save 97% on my processing fees, I’m probably likely to promote open banking amongst the payment options available at checkout.

00;28;49;08 – 00;29;06;25
Unknown
And we’ve seen that happen. You know, we’re seeing that happen already where people are an airline in the in the EU is doing that. And open banking was number one on its list of methods to make payment. This was a big airline. So I think you’ll see that. I think the critical thing about this being a this and that solution is really important.

00;29;06;25 – 00;29;28;21
Unknown
While the adoption and that awareness and that information piece are going on about this new technology, what’s also great to see is that once people have made their first open banking transaction, 90% of them will go back and make another. So there’s really strong adoption since that typical thing about new technology, first one’s a bit difficult or a bit challenging or a bit scary or I’m not saying it before.

00;29;28;21 – 00;29;44;27
Unknown
And then once you’ve done it, once you’ve got said, Why would I ever put my card details in again? Because this is so much quicker. I think that’s fascinating. Yeah. And definitely I think the adoption rate, like you said in the UK was just massive. I really see the same happening in the U.S.. Last question then I’ll kick it over to David.

00;29;44;27 – 00;30;02;11
Unknown
Has there been any pushback or lobbying from large organizations? Has anybody come knocking on the door like, what are you doing to us? Whether that’s being overt or whether that’s happening behind the scenes is is a different saying. There are clearly lots of there’s a lot of interest in maybe not working, but let’s put it that way or not working soon.

00;30;02;13 – 00;30;25;27
Unknown
And you may see that if if you’re asking me as a cynical person, things like the downtime, if there’s an open banking situation with one of the big banks, would they allow the same amounts of downtime technically for a card payment? Probably not, because it’s not in their interest to do so. Similarly, things like if you look at the limits on an open banking transaction can be on a single transaction.

00;30;25;27 – 00;30;44;19
Unknown
They can be up to £1,000,000. So some of the banks business bank accounts will support a £1 million transaction in one open banking payment. Typically they follow the same kind of value as faster payments in the UK, which will be in the 20 to £25000 mount. Some of the banks, however, would say we’re going to limit open banking to £3,000 per day.

00;30;44;20 – 00;31;03;10
Unknown
There’s no good reason or justifiable reason why they would do that. So, you know, again, asked me of my cynical hat on, is it a blocker? I don’t know. But I think ultimately the writing is on the wall. What we’re going to have, I think, was what’s happening in the moment is we’re trying to slow down that process because there’s a lot of vested interest in that remain saying for a while.

00;31;03;10 – 00;31;34;03
Unknown
One of the things I just should mention actually well, let’s talk about open banking. And one of the other key advantages is that settlement time. So that’s really key for small businesses, too, because the moment I authorize that payment is the moment it hits your bank account is the merchant or the retailer. So you’re talking about near instant, it’s a couple of seconds as opposed to waiting for, you know, a card provided to settle those funds out to you or in the charity world, you we we see providers that are taking up to 30 days or more to actually pay the charities, which they take that money and hold it and make interest as that

00;31;34;06 – 00;31;53;23
Unknown
should about right. My inner accountant is jumping for joy as I think about cash conversion cycle and how that would really help out with that that instant transfer of cash. I really like this. So my life is huge for small businesses. Obviously it’s the lifeblood. You know, it can be it can be the difference between them operating or not.

00;31;53;23 – 00;32;12;18
Unknown
Writing is cash is often the case. It’s fine if you’re a larger business, which is again, one of the reasons that we don’t offer discounts for bulk when offering discount for volume. For us, it’s if anyone needs discounted payment processing, it’s a small business. So, you know, for us it’s a penny transaction. I don’t care if you’re huge, it’s still a penny transaction.

00;32;12;18 – 00;32;32;13
Unknown
I like that. I like that. For our listeners that are doing business in the UK and they use wonderful as payment processor. Absolutely. So we’re we’re at the moment we’re rolling out a number of things. We’ve just gone live for the commercial products fairly recently. So we’ve been very focused on making sure everything works since we took off over from our previous payment providers.

00;32;32;13 – 00;32;48;17
Unknown
And the great thing is doing that in the charity space, again, with no disrespect to charities, but they probably wouldn’t be your target market for a payments innovation product. You know, you wouldn’t be the first people you think about, who can we do this with? Because we were obliged, forced to do it because we had no alternative.

00;32;48;17 – 00;33;06;08
Unknown
It’s been a fantastic learning curve for us and we’ve been able to see what the adoption is like amongst the charity donor demographic. And the feedback we’ve had has been fabulous. It’s been really, really strong. So I think that’s really key is is is doing that and testing that in the charity market has given us the scope to that.

00;33;06;08 – 00;33;24;15
Unknown
Now release those products in the commercial world. So the way that we’re doing that is through integrations. Typically we’re very focused on the small business market and that’s where we want to operate. And our route to doing that is through integrations with accountancy platforms, with e-commerce platforms. And we’ll be rolling out a number of those over the coming months.

00;33;24;15 – 00;33;46;01
Unknown
So we’ve started with WooCommerce, I’ve mentioned we’ve got a number of other platforms under development at the moment. We’ve also launched an integration with the Xero accounting platform, phase one of that’s now live and phase two will go live soon. So Libi, a number of ways that you can implement this on your website along with a public API, if you’ve got your own your own set up, then you can use us equally.

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00;33;46;01 – 00;34;03;04
Unknown
At the end of every episode, we asked our guests the same questions. This is what we call the fire round. Are you ready? I’ll do my best. All right. Karen, what is your favorite book? Anything by Haruki Murakami, but probably dance, dance, dance. I think he was the first one to read. I just love his writing, not funding.

00;34;03;05 – 00;34;24;27
Unknown
Absolutely. On Put It Down a bull, if that’s a word. I’m sure it is now. All right. What are your hobbies? Running. I’ve mentioned already that’s been a lifetime passion. Both yoga. I also mentioned I really enjoy my yoga. So those two things keep me balanced in the hectic startup life and music. Music production started life as a drummer many, many years ago and then moved into doing electronic music production more recently.

00;34;24;29 – 00;34;45;03
Unknown
Okay, very cool. What is one thing that you do not miss about working for the man? Inertia I would say just that that larger organizations, just the speed at taking decisions and implementing them I guess is one of the reasons why, you know, historically we’ve we’ve exited businesses reason. Obviously, I think this is a this is a different one because the opportunities are great.

00;34;45;03 – 00;35;03;18
Unknown
But also I love that small, small business. Get things done. Just get it out, get it live, test it in the real world. So inertia, don’t miss the. So I’ll like that one. Okay. Last one. What do you think sets apart successful entrepreneurs from those who give up, fail or never get started? You know, I was listening to Matt on your last episode and I couldn’t agree more with them.

00;35;03;18 – 00;35;24;11
Unknown
I think, you know, at that point of it, you don’t fail. You just learn lessons I think is really, really important. But I think going back to again, some of the comments earlier is that tenacity is the ability to keep going when things really, really fail hard. I think that’s really key. I think that passion in the first place don’t choose something because someone else is doing it.

00;35;24;11 – 00;35;39;16
Unknown
Choose something that you want to do because it’s something that really interests me. I think that’s a great way to get started in business. And then it is just knowing when to stop. So you’ll miss those two things. They mean conflict, but if it’s not working, move on, do something else, you know, and that can be another business.

00;35;39;16 – 00;35;59;19
Unknown
It doesn’t mean stop doing your own business, but just recognize it’s not working. Okay. Excellent. Absolutely. I want to thank you for being a guest on the Powering the Man podcast that people are interested in using wonderful as a payment processor. What would be the best way? Wonderful Coda UK. So very simple domain name goes back to my domain name registration day so registered to nominate in 1998 and finally go to good use for it.

00;35;59;21 – 00;36;13;29
Unknown
Awesome Very nice and we will post links to all of that in the show notes. Karen, we want to thank you for being a guest on the podcast. This has been an outstanding conversation. We’ve definitely learned a lot about open banking and looking forward to the future on this. So thank you so much for your time. My pleasure.

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