Justin Benson, CEO at Spreedly, payment orchestration provider, recently talked with Davide Villa (Consultant, San Francisco). During their conversation, Justin talked about the origin of Spreedly, their value proposition and shared his views on key market trends.
Hi Justin, thanks for taking the time to talk to us! Could you walk us through the origin of Spreedly and what led to its founding as a payment orchestration platform?
Spreedly has its roots in building a recurring billing solution for the web to help support the “subscription” economy emerging around 2008. Our founding team built out a wide range of PSP integrations to support this offering, however, soon after I joined the organization, we noticed a wide range of prospects more interested in non-recurring cloud-based tokenization with a wide range of pre-existing connectivity. Several of our current customers came to us all the way back to this time – when orchestration was still being defined and created as its own solution set.
Our initial investors saw the value in how our offering would support the ever-increasing integration needs of the payments space. At this point, the subscription-based side of the business was sold and our team went full in on orchestration.
The value proposition for Payments Orchestration at this time was difficult to differentiate from other large PSPs. There was a strong need for education of the market on why access to the full payments ecosystem was so important. We often met with large organizations that were building this same functionality in-house.
The common thread? The need for orchestration continued to grow and we along with it. Spreedly built on top of our foundational efforts and continued to add value for our customers.
The market has significantly shifted since that time over 15 years ago. Competition in the space is at an all-time high. We remain the leader in the space with incredible insights from the over $40B in annual GMV processed through our platform and our strong relationships with PSPs and other payment providers.
How does payment orchestration differentiate from traditional payment gateways and acquirers, and why should a merchant consider implementing an orchestration layer?
The dramatic rise of web/CNP and mobile app payments caught the industry flat-footed with out-of-date offerings. This created a tremendous opportunity for new PSPs like Braintree, Stripe and Adyen to step in. Merchants just needed payments to work and to stop being a drag to their overall growth and accepted the trade-off of having to work with a closed payment stack.
As these PSP offerings matured and traditional PSPs caught up, merchants began to chafe at the trade-off between flexibility (open ecosystems) and simplicity (it works) European merchants probably led the way here but the US has also caught up to this line of thinking. Somewhere between 2015 and 2018 merchants moved from choosing which PSP they would implement to choosing which mix of PSPs they would implement.
Payments Orchestration is an approach that leverages data and connections to multiple payment services in order to deliver the best possible payment experience to customers and the optimal revenue to the merchant.
Spreedly offers an agnostic or independent Payments Orchestration solution to merchants and merchant aggregators that value independence and the flexibility to use whichever payment service is best for their particular needs. It’s independent because the platform supports numerous PSPs, fraud tools, and other services while remaining agnostic about which services the user leverages.
Where do you see key areas of growth for payment orchestration?
We’re seeing a marked increase in demand for truly independent orchestration. Independence is important because it allows a user to select the right mix of services from across the entire ecosystem. They aren’t forced into a walled garden of solutions that are approved by the orchestrator. Instead, a company can experiment with new vendors, or change up their mix if they are unhappy with the service provided by a particular vendor. Independence is also helpful because it provides a significant source of data and insight for companies.
Agnostic orchestrators can, by their nature, gather authorization rates, latency times, and other intelligence across payment services globally. That insight helps companies better choose which payment services they want to work with.
Today, the benefits of payment orchestration are accruing to those merchants who control their own payment stack. I think you’ll see platforms like Shopify, BigCommerce and Zuora design payment orchestration solutions to meet the needs of merchants who are tied to their platforms.
How does the need for Payments Orchestration vary across different types of organizations?
A traditional merchant, one selling directly to a business or consumer, is the business model most payment solutions focus on. These organizations typically come to us with a specific business need which impacts payments directly. This might be a need to grow by entering a new market with unique payments needs, a desire to maximize revenue by optimizing each transaction for revenue, cost, and customer experience, or they may wish to refocus developer resources on building core business value and away from building multiple gateway connections.
A merchant aggregator (platforms and marketplaces that onboard and serve merchants) has payment-related requirements that are significantly different from a traditional digital merchant. They must support a broad range of payment services and scenarios that their merchant partners demand. That makes it difficult both for their development teams to keep pace and for their business teams to monetize their payment offers. They also have the unique opportunity to create new revenue streams by offering value-added payment services to their merchant customers.
What are your hobbies? Are you reading any interesting books at the moment?
I’m an avid cyclist - road, gravel and mountain biking. I also kid myself that it helps with work as it’s therapeutic to roll problems through your mind as the miles go by.
I’m fascinated by politics and economics, so I’ll consume a lot of content from say the Economist, Foreign Affairs and other journals. The most recent book I’ve read is “A Thousand Brains - A new theory on intelligence”.
What are your long-term personal goals?
I’m very single-threaded. Education, travel/explore the world, career, family, give back. I have largely completed four of these big goals of giving back to the next chapter. Once I’ve run my course with Spreedly I will focus on giving back.