Ep. 211. Interview Suresh Vaghjiani, MD Global Processing Services

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ST:  Welcome to Fintech Insider Interviews. I'm Simon Taylor from 11FS. Today, I have the pleasure of speaking to Suresh Vaghjiani, who's the MD of Global Processing Services, side processor for credit, and prepaid cards, including many prepaid cards that you may have heard of, I think Revolut, Monzo, and a few others. So, we'll-, we'll get in to all of that. So, welcome to the show, Suresh.

SV:  Thank you, glad to be here.

ST:  Thank you so much for coming on the show. I tried to describe what you did, I probably did a bad job. Do you want to tell me what Global Processing Services is? What does it do, why is it, what is it?

SV:  Uh, it's an interesting question, because the-, the correct industry term is something called an issuer processor, which is actually confusing as hell, uh, because people often think, are we an acquirer? Do we provide some sort of gateway? What we are is, we are that access point, for a number of fintechs to access-, uh, the scheme rails, so, when you talk about MasterCard and Visa, from an issuing perspective. So, in principle, we're like the outsource technology of the issuing banks.

ST:  So, for my sins, I used to work at, um, TSYS, Total System Services-,

SV:  Okay-,

ST:  Shout out-,

SV:  One of our competitors.

ST:  Yes, absolutely. And-, and I think the-, the thing that I learned there is, this is all of the things that, if I were to start-, if I wanted to give my customers cards, then you would-, and a-, and an issuer processor would provide you all of the services, whether it's the computers, whether it's access to the people who make the cards, whether it's the-, everything that sits around that. So, if I were to work with yourselves, I could give my customers a card, and they could take that in to a shop that had a Visa and MasterCard logo on it, and they could spend money from that card.

SV:  Absolutely.

ST:  Okay. So, who are those customers? Who-, can you give me examples of who you support?

SV:  So, you would have heard of the prominent ones, you know, you talked about, you know, the Monzos, Starlings, you know, the Revoluts, Ixaris, Glint Pay, you know, the ones that's doing the gold exchange, Curve, both Curves, you know, the card, and also the wearables. Uh. We've got 120 clients, and there's-, there's the ones that are more prominent, and then there are ones that are a bit more behind the scenes, that haven't quite gone-, gone full-fledged yet.

ST:  So, why do you think those customers choose you, versus some of the other providers out there?

SV:  Well, I think there's two things. One is, it's all about speed to market. What we're realising with these fintechs is, they want to get their program live, very quickly, so that they actually get the data, to improve their product, and actually get that real user experience, and-, and develop the product. The traditional banks can sometimes take up to two years to launch a product, and by the time they've launched, the market's moved.

ST:  Yeah, so-, and you don't know if a product works, until a customer's using it, right? So, I mean, ultimately, that's what you mean by get the data. If I launch this thing, will anybody want it? Well, I don't know if they'll want it in two years, but if I can put it in their hands, in, you know, a matter of months, then not only can I put it-, can I get that data, but I can actually iterate on it, before I've gone ahead and done that full product launch, in the background. It's a pretty interesting place to be.

SV:  I mean, absolutely. What we're finding is that the banks are building things, and they're trying to compete, and copy some of the fintechs, but by the time they launch, the market's already moved. And-, and what I've found, you know, in previous companies, where I've launched B2C products, is some of the things that you think customers are going to use the most, they don't, they actually use something else, and then you realise, "Well, why are they using it in that way?" and then you can actually develop products and services to further enhance those offerings.

ST:  And I guess that really fits with a startup mentality. So, how do you go about evaluating some of those companies that approach you? Because, obviously, you have a relationship with Visa and MasterCard, you have scheme rules to follow. If a company's going to come to you, yes, you want to sell your products, but you've got to know that they're going to follow some rules, right?

SV:  It's interesting you say we have to follow scheme rules. We do, but not in the way that you think, because we-, we're the technology, so we need to make sure that we are, you know, we're certified with the schemes, from the access side, the PCI, but in reality, we're the outsourced technology of the issuing banks, so we work with 40 different issuing banks, and they are-, you know, they are trusting us to follow the rules that they want us to-, to, you know. We set up programs on our platform, that they have ultimately signed off.

ST:  Oh, that's interesting. So, they ultimately have to get some level of relationship with the underlying scheme, and then use you as the technology partner, I'm guessing working with you, who's done it with the scheme before, gives them some momentum.

SV:  They're the actual licence-holder. They're the ones actually paying the schemes. So, you know, when you go to a-, a Barclays bank, they have everything under one roof-,

ST:  mm.

SV:  But what we're seeing in fintech is, uh-,

ST:  Like Toys R Us [laughter].

SV:  Absolutely, absolutely. But, you know, Toys R Us don't, kind of, exist anymore-,

ST:  Yes-,

SV:  [Laughter].

ST:  Yes. Yes, really-, really interesting point. Um. Barclays were my former employer, so I-, I hope, for all of the people that work there, and are listening, they-, they do continue to exist, but that's besides the point. The-, the name "Global", Global Processing Services, obviously you've had a lot of success in the UK, and across Europe, but have you got customers in-, you know, outside of Europe, that-, that are really following this fintech narrative, as well?

SV:  Well, it's interesting you say that. So, I-, I just came back from Australia and New Zealand, I was actually on the-, the Lord Mayor's Delegation, he had selected certain companies to accompany him on this delegation, um, and there is a massive, kind of, momentum of fintech in-, across the country, uh, in Australia and New Zealand, particularly. We're already live in that territory, you know, we do the STA travelcard, that we work with one of our clients, Tuxedo, there. We've got programs live in the Middle East, with Emaar, so we do The Dubai Mall, Burj Khalifa, we're doing all of those things. So, when we say global, we really are, and that's one of our offerings, which is, imagine having a platform that operates globally, one platform, without separate, you know, iterations of regional platforms. You've got one API, and it works across the board, and I think the-, the thing that adds real value is that, when you look at fintechs now, they're-, they're not regional, you know, you don't sit there and say, "I just want to launch something in the UK." I don't want to just launch something in Europe. They want to launch something globally.

ST:  They want that global access, but they want it to work the way their business works, at the speed their business works, because-, uh, Jason often talks about, when he was founding and starting Monzo, and they were looking at who they could work with, on the payments processing side, he had a lot of meetings with a lot of people in suits, who said, "Maybe in two years, we can get you live," and it was like, "Well, where's the API?" and, "Oh, we don't have APIs," and it's like, "Well, here's our MQ messaging," and it's a slightly different beast. But, um, before we kind of continue down that road a little bit, we'll-, we'll come back to-, to some of those points, I've got to drop the bombshell. What about THOSE outages? Many listeners will know that, Monzo, and Revolut, and several others, all had-, all had outages, all at the same time, and it was you guys that potentially caused those outages. What happened?

SV:  It-, it's interesting. So, this is an example of a company, GPS, growing at a very fast rate, in a way that-, you know, we had always invested in the platform. We hadn't particularly invested in marketing or communications. So, what I'd say to you is-, I'll explain what happened, and-, and-, and I'll explain that we had-, where we'd kind of fallen short. So, firstly, is that we have been processing for eight years, uh, and last year, it was the first outage that we had ever experienced. In perspective, the type of, you know-, in eight years, without having any, zero, downtime, it was the first outage we'd ever had. Look, we are-, we are launching products that are ground breaking. These are products that nobody else has been able to do ever before. You know, we're talking about, you know, just-in-time loading, in real-time, for a transaction that you're using on a card, without it timing out on the backend. I mean, this-,

ST:  That you can access via an API, that can give you propositions that can differentiate you as a fintech, but still, there-, it's gone down three or four times. Like, what was the actual cause of it going down? Was it just that you guys were overloaded? You had too much going on? Like, what was-, what was the underlying root cause?

SV:  It's interesting you say that we've gone down two or three times, because, what I'd say to you is, how did you hear of that? Because what would often happen is, you know, we are working with fintechs that are always pushing the boundaries. On some occasions, they may go down, uh, and then we would get contacted by journalists, and we would say, "No comment." We would never comment on individual clients, ever-,

ST:  Mm-hm.

SV:  And the journalist would often write and say, "Ah, we contacted GPS, they said no comment, they have gone down again."

ST:  So, it's the assumption.

SV:  So, the assumption-, you know, we've had situations-, I'll give you an example. We just signed a contract with Revolut, to process for them in Australia and New Zealand, so, we thought, "This is great news. We should do some press on this." We wrote to the journalists and said, "Oh, this is the press release, this is great news," so they said, "This is GPS. They are linked to the outage that happened-,"

ST:  Yeah.

SV:  "Last year." So, it's-, it's got to the point where everything we talk about is like, "This is GPS. Great. But they had an outage a year ago," to the extent we're saying, "Actually-,"

ST:  That's all people know about you.

SV:  That's all they know about us, and I would sit there and say, "Well, you have to ask yourself, why have all of these leading fintechs-, what have they got in common? Why have they chosen us? Why have they not gone to some of the incumbent providers in the space?" and-, and the other thing I'll also point out is, due to the nature of our clients, they are open with communication, you know, they are communicating with the customer on a daily basis.

ST:  You'd never have this with a bigger bank, for instance, they'd just be like, "Oh, a thing happened. We'll tell you about it, uh, never." 

SV:  So, you're absolutely right, we've got customers that are communicating clearly to their own customers, and they are saying, "There's a possibility, tonight, that your card may not work." Where a traditional bank wouldn't do that. And the other thing I'll also point out is that the type of processing we do, we have to always, always be there, and be available. What we don't do is something called stand-in processing, that debit and credit do. So, what that means is, if the processor goes down, the scheme stands in for you, and allows you-, to process on your behalf, if you're not available to process that transaction. We don't do that. We-, if we're not there, we are-, we are not there. There is no-, we're not hiding behind stand-in, that credit and debit can do.

ST:  And-, and what's the-, why would you not want stand-in?

SV:  It's not necessarily whether we want or not. What it is is, we had cut our teeth in prepaid. The regulations around prepaid, where the e-money issuers provide the services, is that, in principle, they are never supposed to ever go negative. In principle. They're not supposed to offer debt, or loan, or go overdrawn-,

ST:  Which stand-in would potentially allow you to do.

SV:  Exactly. So, you know, your balance is £1, uh, we're not available, stand-in comes in, and you buy-, and you buy something for £100 on your debit and credit card. Well, that's fine-,

ST:  That would authorise.

SV:  That's fine, it's fine, because they know you've gone over your limit, your bank's got an overdraft-, you can't do that with prepaid. So, it's funny, but prepaid, in principle, is some of the most hardest-, the hardest form of processing you can do. Which doesn't sound right, because you think, "Prepaid, I mean, that's like-,"

ST:  "But that's the easy one!"

SV:  "That's the poor-,"

ST:  "Surely everybody can do that!" Yeah.

SV:  Yeah, "That's the poor brother-," 

ST:  Yeah.

SV:  Right? Of everything else.

ST:  But it's-, it's interesting that you find yourself in this position, as almost critical infrastructure now, for fintech, because on the back of your existence, many companies have been able to launch, and get to market. People have been able to do things that banks always thought was impossible, which was execute and get to market in less than six months. You know, it-, people have done that. But-, so, there is an outsize impact you have when you are down, but also, I guess there's a bit of a, like-, but there's no credit for the role you've played in the market.

SV:  If we do something great, we do not get any mention.

ST:  Yeah. Nobody notices.

SV:  Right? Nobody notices about us. We-, we do something wrong, and, you know, last year, we had the issue, it was like, name and shame time. I mean, you know, we've launched programs, live to market fintechs, in less than eight weeks. You know. We've launched Apple Pay, Android Pay, Fitbit Pay. We were the ones that did all this. For our clients. But we're not going to get a mention, because we're an infrastructure provider behind the scenes.

ST:  And-, and to a certain degree, like, if you do your job, nobody should know you exist, but at the same time, by doing your job, there's things that come to market that couldn't come to market before, and it's an interesting place to have a conversation about. And when we talk about what things can come to market, that couldn't come to market before, or maybe that are going to come to market, what are you looking at, at the moment, and where do you see the organisation, in terms of where it's come from, and where it's going? Because, you know, you said you've been around eight years, you're how many people?

SV:  We're 150 staff.

ST:  Yeah, so still a relatively lean organisation, compared to some of the big issuer processors out there, but actually, you know, plenty of cards on file, I would imagine, and growing, with all that. So, there's obviously a vision for where that goes, there's a view. So, what are two or things are you hearing from clients? What are you hearing about the future of payments, as you talk to clients?

SV:  I would say two things. One is that-, I talked about speed to market. That's not our-, you know, that's one of our selling points. We are extremely rich in APIs, and-, and we can't really explain what we do, until we show you how our clients use us. And, you know, it's-, as I say, it's all very-, very good, kind of, saying, "Well, we're a great processor," but how are people using us?

ST:  It's easier to see somebody using your service, and to-, it's easier to be shown, than to be told.

SV:  So, I could tell you some examples of programs that we've done for clients, that you would think, "Oh my god, I can't believe that's even around," but it may not be prominent. So, for one of our clients, called MIR, we worked with Lucozade last year, and I don't know if you remember, but on the underground, they were giving out contactless bottles, and the promotion was, you know, "Lucozade always gets you home," and it worked for one journey, tap in and tap out, with a Lucozade bottle.

ST:  Mm.

SV:  Uh, and that was done for summer last year, in one particular month, and it was great. It was actually payments crossing barriers-,

ST:  Yeah.

SV:  And we enabled that, with that client, where you tap in and tap out, one journey, that-, it was a payment device, it wasn't Oyster, you could never use it again, we had to block it on the backend, and make sure it can't be used, but such a simple solution, no? Another solution that we've just done with one of our clients, um, which is stadiums. So, uh-, so, this is live with Aston Villa, uh, and it's about to happen with-, with Man City, as well. So, very clever, it sounds very simple. So, it's a payment card that doubles up as a season ticket.

ST:  Ah.

SV:  Right? So, okay, sounds very clever. So, the card is locked down, that you can only use it within the stadium, okay? So, that's good, so the money goes in to the stadium, right? But this is the really clever bit. Because, let's say you can't go to next week's game. Uh. You would sell your ticket, within the app, to the fans, uh, and then the fans would actually give you money, and then your card will no longer work at the turnstile, and I can do multiple taps to get my friends and family through the turnstiles, in real-time. In principle, you're eliminating ticket touts.

ST:  Wow. So, you're moving-, there is a set limit number of tickets, and you can reassign those across any number of these legitimate season ticket holders.

SV:  Correct. And the client that we're doing that with, they're called Fortress, and they're the ones that actually provide the turnstiles, so they're the ones that are doing this, and they have about, I think 60% or 70% of all the Premier League football clubs in the UK.


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ST:  It's interesting, now we're really getting in to the insider, Fintech Insider stuff, but it's interesting to me that an issuer processor is working with the merchant side at such a close level, you know what I mean? Like, that's usually the acquiring side, that would have been doing that, um, but it's-, but you find yourselves in a position where-, well, actually, you're provisioning payment devices, and doing interesting things, and innovation, around the payment device, and around the payment, that could be done by millions of companies, on a B2B basis, around the world. Have you done any of those as case studies? Have you put them out there? Is-, is that something people know about?

SV:  As I said, one of the things we've never done particularly well, uh, is-, is kind of the communication. You know, we-, we've never done that, and managed that well, and that's where we put our hands up and say-, you know, we've just invested in the platform to launch products quicker than anyone else, have more flexibility than anyone else, but we haven't really done any case studies, marketing, and even a-, even, I would say, our website, up until a year ago, was-, was an embarrassment-,

ST:  [Laughter].

SV:  That's the reality of it.

ST:  Tell me about it-,

SV:  Um-,

ST:  That's the problem, when you focus on execution, is, like, sometimes, the marketing side has to-, has to suffer a little bit. I find it interesting that-, that contrast of focusing on doing, versus focusing on marketing, and then finding the right time to-, to go out and say this stuff, but I did see that you were voted as the Payment Industry's Most Influential Player, I can't remember where this was voted. Congratulations, well done. But did I see you accepted it in a Batman costume, in a wrestling ring?

SV:  Uh, yeah. I mean, I'm not always lost for words, but yes. Uh. So, I'm really proud of that achievement, I-, I was in that list-,

ST:  For wearing a Batman costume in a wrestling ring?

SV:  [Laughter].

ST:  [Laughter].

SV:  I-, I would love to say it was all-, all set for that, but it wasn't quite, and-, and the actual award was-, it sounds uncredible because, you know, I was in a Batman outfit, but, you know, Tom Blomfield was in that list, you know, uh, Julian was in the list, so it was-, it was a very credible list, and it was-, it was nice to be-, to be topped on that. So, what had basically happened is, at-, at the PayExpo, there is something called the Payments Punch-up, and basically, it's-, it's a heated debate, uh, that is in a boxing ring, with microphones, and, you know, as much as we all love payments, the reality is, payments can be quite dull.

ST:  Yeah.

SV:  So, we wanted to have a bit of fun, so basically, the-, the theme of it was that, it was Batman versus Joker, and, uh, it happened-, the actual [laughter]-, the actual debate happened just before they were awarding the, uh-, the award, and I didn't get time to change, and I knew that I would regret it-,

ST:  [Laughter].

SV:  Um. But then when I actually posted it up on LinkedIn, I was like, "I know I'm going to regret this," it had something like 25,000 views, and that's the most views I've ever had-,

ST:  Ah!

SV:  And it seems like dressing up as Batman in payments seems to be a-, a good thing, but-,

ST:  I think-, I think you've got yourself a future, there-,

SV:  [Laughter].

ST:  And Producer, Ollie, if you're listening, you see, you just need to dress as Batman. I think it's-, it's the way forward. I like that, as well, because I think there's an element of, um, willing to have fun, with this stuff, but-, and also, for listeners who are payments nerds, I-, I don't know that payments could ever be dull, we love them, really-,

SV:  [Laughter].

ST:  [Laughter]. Um, alright, so, you've got me intrigued. Tell me a little bit about your background, before Global Processing Services.

SV:  So, I've always been on the innovation side, so, you know, I've always liked to launch things, uh, that are ground breaking. So, prior to there, I used to be Head of Issuing at Paysafe Group, and prior to that, I was at a company called Kalixa Payments. But at Kalixa Payments, I did some really interesting things. We were the first to ever launch the-, a contactless watch in the UK. Uh. That was in 2011, so that was way before Apple Watch was even around. That was pretty amazing, because we were using it-, testing on TfL, almost a year before it was open to the public. And then, in 2012, we actually launched a contactless NFC solution for iPhone 3-,

ST:  Wow!

SV:  Which is pretty amazing, right?

ST:  Yeah, because, I mean, contactless and NFC, I remember following this one, to, sort of, 2009/10, when contactless became a thing, and everybody was like, "[Gasp]! It's going to change the world! Oh wait, it hasn't changed the world yet. Oh, the tech giants are coming. Oh, wait, the tech giants didn't come." And, uh, then every bank innovation department around the world did something in a proof of concept, or, you know, did a lot of PowerPoint about all of the wearables, but actually executing putting it in market, getting it working, and the thing that you said at the outset of the interview, that ability to iterate, once it's in market, become the things that you need, rather than just trying to put it in the existing plumbing, actually having a new partner could be an interesting place to be.

SV:  And-, and just to emphasise, you know, stickers for phones had been around for a long time, so this wasn't a sticker. This was actually an app that enabled NFC to be switched on and off, on your iPhone 3, because-, it was a bit of a cheat, but it was a case that goes around it, and in the case was a micro SD that acted as the antenna-,

ST:  Ah.

SV:  And the secure element was in there. But it was all-, it was all controlled by the app, so it was a real, app-controlled NFC solution for iPhone 3, which was ground breaking.

ST:  I'm a believer in fake it 'til you make it with product propositions. I know that concierging in fintech-land is something that will be familiar to a lot of you. For those of you that work in a bank, it simply means, uh, you make something look automated, but there's a person behind the scenes. So, you know, you-, you launch a new feature, you don't know if anybody's going to use it, you stick the feature in, but actually, it goes in to somebody's queue, and they-, they just bosh out the messages themselves, or whatever, and then you look for the data to drive whether or not people love that feature, and you look for feedback. I think, uh there's-, there's no embarrassment in a thing not being productionised. People tend to focus on, "How do I productionise this thing?" instead of, "Does anybody want this thing?" Interesting perspectives. So, before we were recording, you told me about some interesting cards that you guys have been producing, some pretty high-end ones. What on earth are these cards?

SV:  So, we've got one of our clients, they're called Aurae, and they are kind of ex-AmEx Black executives. They said they wanted to launch a card that would clean the floor with AmEx, and you're thinking, "Well, AmEx do black, metal cards. How do you challenge that?" Um. What they have come together, and they're actually using Jacob & Co. as jewellers, they have actually produced solid metal gold cards. These are solid gold cards, with rubies, emeralds encrusted on them, uh, I'm not joking, the product is live now, it's called Aurae Life Style, um, and, uh, even the limit-, and-, and-, and they're actually prepaid cards, with limits in the millions.

ST:  Well, you guys are doing some pretty interesting, innovative stuff, like next you're going to send a card in to space, on a Falcon X rocket, like, you're going to make the rocket itself a card-, this is pretty fun stuff. Alright, so, there's a couple of questions we ask everybody, um, and I think the-, the number one question that we've asked most of our interviewees is, what's the best career advice you've ever been given, and what would you give?

SV:  Uh, I'll probably do the one that I give, first. So, I always say, you know, people move around in the industry, different companies, different-, I would say, uh, never choose a job, choose an opportunity. You know, I have people sometimes ask me and say, "Look, I've got this opportunity, should I go and join this company, or shouldn't-," and-, and-, and I-, I say, "Well, you need to decide. What's important to you? Is it money? Or do you actually want to make a difference?" So, if you're in a company where you can have real change, and you can-, you've got real influence to make a change, um, then there's massive opportunity there. So, you almost have to question, and say, "Do-," you know, what is it that you really want? But I would say, "Don't choose a job, choose the opportunity-,"

ST:  Mm.

SV:  And I've-, I've often chosen jobs, not based on money, but based on the opportunities that they-, they open up.

ST:  Well, wise words, I-, I completely agree. And, so what's next for GPS? What-, what does the future look like, do you think?

SV:  What we're doing is, we-, as I said to you, we kind of cut our teeth in prepaid, but, um, we are doing more and more on the debit side. So, that area is particularly growing, and-, and we've-, you know, we entered the market as underdogs. We were never supposed to succeed, you know? We entered, and people were saying, "Oh, this small bunch of rowdy guys, nothing's ever going to come good of them, because-,"

ST:  "They're too small to do anything."

SV:  "They're too small." We entered the market, you know, after-, we, ourselves, were using a third-party processor-,

ST:  Mm-hm.

SV:  So, what you won't know is, if you went to any Westfield shopping centre, or Intu centre, we do all their processing. All their gift card processing is us.

ST:  And so you didn't have a mainframe that had been up for 20 years, and people still bought from you.

SV:  No [laughter].

ST:  Yeah, interesting. Um. Alright, so, where can people find out more about you and Global Processing Services?

SV:  Um, you know, we've got information on the website, but to be honest-, you know, we're going to be exhibiting at Money20/20 Europe, we're going to actually be flying to Singapore, the day after tomorrow, so we're actually at most of the conferences, um, and, um, you know, we're-, one of the things that makes us different isn't just about the platform, it's about the people. We're extremely open, approachable, and we have very knowledgeable staff, people that have left large companies like, you know, MasterCard, Visa, um, you know, Paysafe, um, PayPal. They've left these companies to come and work for us. And you say, "Well, why have these people from these large companies come to work for this small unknown?" Uh, we've got some really good staff, really open doors, and we hire people on attitude, not necessarily on-, on experience.

ST:  I like the sound of that. Alrighty, well, thank you very much for joining us on Fintech Insider.

SV:  Thank you.

ST:  And thank you for listening. If you like wat you heard, subscribe to our podcast, leave us a review on iTunes, those reviews help us out massively, and, you know, befriend us on Facebook or Twitter, we're-, we're friendly souls. That's all for now.


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