Scale and stability in the world of digital payments

The high-volume world of digital payments brings its own unique IT challenges. Payrix CIO Jason Key talks to Pulse Q&A about what a difference it makes when you’re dealing with the customer’s money and how he espouses ‘reductionism’ when dealing with IT complexity.

Pulse Q&A: Welcome to another edition of AMA. Today I’ll be talking to Jason Key from Payrix. Thank you so much for joining us today Jason.

Jason Key: Certainly. Happy to.

Pulse Q&A: Could we start off a little bit with your journey and how you got to CIO at Payrix?

Key: I started off in purely engineering and did a number of startups. A lot of gaming, which had the high throughput/high transaction-type models. I then moved from there into Marketing Automation and spent some time at CenturyLink in the early days as they were becoming sort of the conglomerate there. 

Back in 2010, I got recruited to come out to PayPal, in a product architecture role to help the go- to-market for people here that really got me around the commerce space. That brought me all the way into this payment world. 

You’re literally moving funds that are not yours. That adds a degree of heightened expectation.

Pulse Q&A: With digital payments, is it also a similar high-volume job as well? What are the specific challenges to a workplace that has that kind of environment? 

Key: Of course you have scale and stability. It’s one thing when you’re talking about the ad space or the gaming space because you’re paid for what you’re putting out. In the case of payments and financial services, it’s somebody else’s money. So it’s really critical that scale and stability go hand in hand. Because it’s one thing to run slower but you’re actually impacting somebody’s ability to do business.

Pulse Q&A: I’m guessing you get told too when it is affecting their businesses as well?

Key: We don’t usually get a lot of bad feed back but, if you have a problem where there’s something going on with the platform that our automation doesn’t pick up, I assure you that we hear about it.

Pulse Q&A: How do you deal with customer feedback as a manager? 

Jason Key PayrixKey: I’m an agile advocate. The tenets of agile, essentially, hinge on transparency and communication. Our operations team, even though it’s not a traditional engineering sprint, it’s the same model. It’s in lockstep with engineering. Similarly, so we’ve got the operations team in an area where we also have risk and compliance. They’re all in the same lockstep. That allows for that communication flow between the customers all the way back into engineering in a really transparent way. That allows us to stay on top of what the customer is going through. 

On the engineering side we do as much automation as we can and monitor the platform to make sure that we see it from we see it from behind the curtain as it were. 

Pulse Q&A: What are some of the tensions that you would see in your day to day job that you might not see in other verticals?

Key: Like I said before, in the gaming and marketing automation world, you’re not messing with somebody else’s money. You’re literally moving funds that are not yours. That adds a degree of heightened expectation. As a result, you have to understand when you’re building an application or you’re building out infrastructure, that you’re doing it for the sake of increasing the confidence level or guaranteeing the confidence level that the customers actually trust your platform. 

Amazon and the bigger platforms have the same problem. If they’re dealing with an e-commerce company and Amazon goes down, they’re taking their whole business down. So it’s the same in the credit card processing space. Without electricity you can’t have lights. Without internet you can’t have network. And without payments you can’t have a business. You think that all the way up and without an internet service provider–a cloud service provider–you can’t have a storefront.

Pulse Q&A: Tell us a little bit more about your business model.

Key: This is going to get a little esoteric. We are part of an emerging model where SAS-based companies have made the decision to own more of the payment infrastructure. That goes all the way across not just from a user experience perspective, but also even some of the risk and liability perspective. 

Think of a point of sale system, a commerce system or scheduling system that has payments baked in. A lot of what the business model has always been over the last few years is that you get pushed into another payment service provider even though there might be a referral arrangement between me the software developer and you the payments company. I can sort of tighten that up a little bit from a UI perspective: merchants, Mercer, QS, developer over into systems that are completely outside of my control. 

Social Authentication’s loss might be IAM’s gain

It causes a disconnect and a bit of churn when trying to provide the best experience for my customer. Then they bounce out and go to this other partner. They have a bad experience with that partner. I’m not really in the middle anymore. I don’t own that experience. We provide what they call a ‘peanut facilitation’ framework or layer. I like to call us the payments cloud layer in that when they connect they can either have the full underwriting as a payment facilitator. That’s our enterprise level. 

What that means is they’ve done the full banking underwriting so they can demonstrate that they can do the liability and risk. 

[N]o matter what automation you put in place or oversight you layer on top of it, the more complex the system is, the higher risks there are.

They use this strictly as a platform. They can choose how far down the rabbit hole they want to go. They can come in, we have all the portfolio management pieces, which is not something they would expose to their customers, but all the merchant interfaces reporting around transactions. 

Effectively, what we do is we make a company like a software developer that has their app on the marketplace that does invoicing or scheduling and things like that becomes a payments company. 

Pulse Q&A: We have a question that we had on our forum about IT complexity and what sort of processes you’ve put in place, or what sort of strategies you have in dealing with complexity?

Key: I do tend to be a bit of a reductionist. Meaning that the more complex the system, the higher the risks are. Because no matter what automation you put in place or oversight you layer on top of it, the more complex the system is, the higher risks there are. My team and I work quite hard to reduce things down. It’s a hard effort in this business because payment processing is quite complex.

Different countries add different payment models, different payment types and different use cases. Germany does a lot of things on invoicing. Brazil allows you to break every trend. Every country’s unique like that. So the level of complexity in the payment space is already quite broad. 

Pulse Q&A: I’m going to give you the last word and give you the question to set it up as well. We have a few months now to 2020. Is IT as automated as it ought to be?

Key: In my opinion, we’re just really still scratching the surface of that. Both microservice architectures–the way software is built– the tools and systems that are emerging both from any number of languages that I could throw out there, it is moving so fast. I don’t think you could say it’s as comprehensive as it needs to be. 

It’s never as automated as it can be. Just because I automate something that reduces the need for manpower on one side, that just means that the same manpower can be dedicated to the other side of the house in another way. This is even within technology that helps you scale even more.

Pulse Q&A: Thank you so much for joining us today Jason. We appreciate it.

Key: Thank you very much.

 

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