How Tap on Phone Is Changing Merchant Payments

Narrator: Foreign

James Shepherd: shepherd here with another edition of the Merchant Sales Podcast. Got a really timely one for you today. Talking about Tap on Phone. Haven't really talked about it that much, but it is such a big deal uh, in the marketplace being able to have a Tap on Phone experience. So I brought my friend Vlad Sadowski in for this one. Obviously our sponsor of the podcast is Nativia, which Vlad is the CEO of. So I won't uh, belabor that point because we get into that in the podcast. But I'm really excited to talk to you about Tap on Phone and share what Vlad's got going on there, uh, for the industry. And then also after that we have a Today in Payments talking about a lot of new trends. Same store sales numbers, uh, come from Straw Hacker Group talking about fraud and some other uh, Fed related things. Fintech's getting access to banking. So it's just some really cool stuff we have for today in Payments. So we'll dive into that right after the interview. That being said, let's dive into this interview with Vlad Sadowski. Welcome to the Merchant Sales Podcast. Hey everybody here today, my good friend Vlad Sadovsky, CEO at Nativia. How are you doing today, Vlad?

Vlad Sadowski: I'm doing fantastic, James. Good to see you again.

James Shepherd: Yeah, great to see you as well. Uh, so of course SEAA right around the corner, uh, and as usual you've uh, got some cool stuff in the work. So today we're going to talk about Tap on Phone, um, and some of the cool things around that before we dive into that. Vlad, it's been a little while since you've been on the podcast, so for those who don't know, you tell everybody what, what exactly it is that you do if you can fit that into a short thing. I know you do a lot of

Vlad Sadowski: things so I hope that, that people still remember my face. Um, uh, in this case you're right, it's been a while. But we wanted to um, work on something that we could present on this podcast as usual. You know, uh, James, you getting the first dips of what's coming out of new out of uh, the tv. And uh, um, we want it to be significant enough to um, to talk about it.

James Shepherd: Absolutely.

Vlad Sadowski: So um, yeah, we've been hard at work trying to uh, come up with uh, new uh, solutions and new ways to sell for our uh, merchants and um, and uh, isos. And primarily isos, given the fact that SAA is right around the corner. So um, I think that uh, we've um, we have something cool that um, I believe will be very, very useful. At least. I had a problem with it for years.

James Shepherd: Yeah.

Vlad Sadowski: And um, I wanted to solve the problem once and for all and solve it in a way that it will be as revolutionary as some of our other products have been. And um, um, I think we, we accomplished, uh, this. And that's why, um, you see me on this, on this podcast and um, we can, we can definitely talk about it.

James Shepherd: Cool. So what I want to do before we get to the tap on phone, um, which, which we'll talk about goes with this Nativia Go app. I want to talk for just a second about Valor and Deja Vu. So let's, let's set the groundwork there because I know this kind of is in that same ecosystem. So talk about what has Nativia done with Valor and Deja Vu and kind of what's your theory on like, how do you think about these two kind of different hardware providers and your involvement in that?

Vlad Sadowski: So, uh, first of all, um, you know, one thing that I've made a commitment to, um, a couple of years ago when we first started in Savior, is that we want to do everything Square does. Right. Um, and every product that we put out is, is with that thought in mind. However, ISOs, an agent market has its own, uh, little uh, details that are not very straightforward. For example, you know, Square is a set of hardware and software. It's one set. Whether you love it or hate it, it's one set. It is what it is. Yep, it is what it is. And um, um, the ISO market today is a very diverse set of equipment. Recently we've done a study on um, how many devices and what type of devices we have in our merchant portfolio, which is now approaching 50,000 merchants. We um, basically have thousands of Valor devices and thousands of Deja Vu devices. Right. And you know, people were asking us, um, um, before uh, stating, uh, especially manufacturers, they were asking us, saying, oh, um, you guys are not buying a lot of devices. And it took me a minute to convince the manufacturers, both Deja Vu and Valor, to look into our mids that they see on the system.

James Shepherd: Right.

Vlad Sadowski: Um, what is our population of terminals within their ecosystem actually means?

James Shepherd: Right.

Vlad Sadowski: When they realized how much of our, how much our partners are buying and deploying their devices, that's when they took notice.

James Shepherd: Yeah.

Vlad Sadowski: And so the mission of, of, of Nativia today is we are trying to do the best of breed of devices. So if it's a form factor that you need, if it's uh, uh, if it's a particular device that you like or if it's a particular way of um, of you know, having a software on a device. That's what we are here to give to people. We believe that, you know, the leaders are so neck to neck. Um, you know, before it was Pax, it was kind of leading in the space. Right. And I truly believe today that PAX is lagging behind. They're way.

James Shepherd: Definitely, definitely in the ISO agent community they're lagging very far behind. And I think that is a lot of that is the functionality and some of the things that they've, the choices they made strategically. But definitely lagging behind. Yeah.

Vlad Sadowski: I believe that Android devices from both Valor and Deja Vu are far more superior. They're a lot more ISO friendly and um, you know, at Nativia it would be stupid for me to not recognize that fact.

James Shepherd: Yeah.

Vlad Sadowski: Um, however the Deja Vu devices and uh, um, Valor devices are very different in nature and we recognize the fact that it has its own audience. So when we realized that there is a Valor camp and then there's a Deja Vu camp, we thought about how we're going to be able to combine the camps for the benefit of the merchant number one and for the benefit of nativity number two and provide value never seen before in the ISO space. Yeah. And so the value that we're going to provide is we work with both manufacturers, Deja Vu and Valor and, and created NV Go app upgrade, um, that we've had for years but we completely redesigned it from scratch um, and we put it out on um, a Valor device and we'll put it out on a Deja Vu device. And so why have we done this? The reason we've done this is because to for the moment of today where we are releasing stop on an iPhone on a mobile device and the beauty of that, we already have both apps completely locked and we took over the terminal um, in both Deja Vu and Valor, um, um, Valor World. So you get to use either one of these hardwares, you download our app that will occupy the entire terminal. You're not going to be able to use other apps within our native Valor app or native Deja Vu app. But what you're going to get in exchange of that is a tap to phone app unavailable anywhere else that will connect and will present one coherent view just like it would be on Square. You see, you can. Now basically with the setup that we've done, you can mix and match Deja Vu and Valor device on one merchant and have one experience and top it off with the tap the phone. That's the innovation that we're bringing into the mix and it's unavailable anywhere else. And the result of it, merchant wins. You get to use the hardware you like as an ISO, an agent and you give something that Square and other fintech providers already provide with tap to pay. And at the same time it's economical. And when we talk about economics, um, I can't wait to reveal to the merchants um, uh, these type of scenarios and um, um, basically um, uh, we cannot discuss more that um, with these type of scenarios we are combining tap to phone, all these devices and all that comes of it as one price. So what we're going to be doing is with every device, Valor or Deja Vu, we will provide up to five tap to phone devices completely free. You're not going to get charged any transaction fees, you're not going to get charged any monthly fee for any tap to phone devices. Um, and um, in the Valor side, our monthly fee for the Nativa Go app includes Valor fee as well. So you don't have to have two fees for Valor. Um, on Deja Vu we're also working out substantial deals. We have loyalty program going on with Deja Vu, um, that if you start buying Deja Vu devices we will absolutely um, uh, create a very similar economics that we've done for Valor devices if it's coming through us. If you are servicing Deja Vu terminals yourself, we will provide rebates through our Nika Banking, um, ecosystem.

James Shepherd: Wow, that's awesome. So Vlad, have a question. So it's surprising to me how, what, what a small percentage of agents actually are able to sell tap on phone right now. Or, or maybe they can and they don't realize they can, but there's very little of this. Like, so when I talk to agents it's like what are you using when a merchant wants tap on phone? And they're like I don't have that right. But the merchants all want it. Help my audience understand why it's so hard. So why hasn't everybody else already done this? Because it seems like man, everybody should be able to go sell tap on phone. But actually what you've rolled out here is like yeah, there's very, there's hardly another solutions that agents and ISOs are selling that allow tap on phone right now. So help us understand what goes on behind the scenes and why it's so difficult.

Vlad Sadowski: So what's going on behind the scenes? Just to give you guys, just to give you. Jim's an idea is that it's a, it's a two and a half, three year project that we've undertaken because Apple is very strict with who they give licenses to to be able to have tap on phone and iPhone. Um, Androids are much easier there you, you would see other providers, Gateway that are doing Android devices. IPhone is a huge deal. Yeah, uh, it's, it's, it takes a long time on the um, getting an agreement done with Apple and you know United States is uh originally was 50 50. Now I believe it's like 75 to to 80% of iPhones and 20 to 25% of Android devices um in the mix. And so uh, a lot of customers want iPhone and you just can't roll out a product without it. And um, um, um with our product it's a really, really really big deal to be able to do an iPhone uh, without uh, you know and having a native output for the phone itself. Um, like I said, Android's easy. We will have it on Android. It's coming up by the time we hit sea uh in a few weeks. This um, is not going to be an issue. Uh we will have Android and iPhone but we started with an iPhone to begin with and um, Androids are coming right, right after it. Um, but iPhone is a huge problem logistically to get a contract done with uh, with, with Apple that was the biggest hurdle. And um, um the other important piece is the price right what we are the processor. And for the processor to come up with a deal like this, um, it's not possible. Everybody's charging. So if you go to Deja vu today for example and you decide to do tap, tap to phone which what they do, um, that's not going to be that simplistic and it's not going to be that cost effective. You'll get a separate charge for tap to phone which means you're gonna have to figure out a way to build that into the price. And a lot of agents just don't, don't want to build it and they end up losing deals to square that says look, you know here's your, here's your tap to phone right then and there and you don't have to think about it.

James Shepherd: And I think too it's also you know know I think the size of these merchants right like if I'm, you know, if I'm, I would imagine a pretty common use case would be something like a, a hair salon where they want to do multi mid or something where each stylist is going to process you know $2,000 a month or 3,000amonth. And so those, those additional fees for tap on phone really add up. When you're talking about a collection of smaller merchants rather than those big ones, you know where it's going to offset?

Vlad Sadowski: Absolutely, absolutely. The case number one. Number two, you're also looking at um, um, the fact that in the traditional terminal scenario you have to wait for the terminal to come in. Right. So if the merchant is approved, how are they gonna start processing? Oh, 24 hours until the terminal gets there. Right, right here. There's no delay, Right. You got the approved, download the app, the next thing you know, you're processing. Yeah, yeah.

James Shepherd: So I have another question for you. So I've been talking a lot on the podcast of as I'm you know, promoting Nativius, uh, in terms of sponsorship. We've been talking about the fiserv deal that you went public with at your event recently. So the other question that I think my audience would love to understand a little bit better is like how does this work? So you know, is there, there's this gateway behind it, is it TSIS and fiserv, is it help us understand a little bit more of like what does it mean if I'm an ISO and I want to come to Nativia, I want to offer this technology, what all, what can I do and how does this really work behind the scenes in terms of like routing transactions and everything.

Vlad Sadowski: Right. So uh, it's, it's Thesis behind it right now. And um, Nativia is working on um, its own platform. It's not, not, not an overly public secret. So we'll be most likely available on TV platform, um towards the end of the, towards the end of 20, uh, 26. But more importantly, yes, you do have to get a certification done with, with, with one of the platforms. We chose Thesis because we have more flexibility there. We can do same day funding. We will be doing instant funding on a tap to phone accounts very, very shortly. So um, those things are important considerations when you choose where, where the, where the platform is.

James Shepherd: Yeah.

Vlad Sadowski: And um, um, uh so from that perspective that that's kind of there. Um, and on five star people wanted, they wanted to Clover all the way.

James Shepherd: I'm just literally just about to say that I'm like really fiserv only. The only reason people, the only reason the ICE wants 5 serve is clover. So it doesn't really matter anyway.

Vlad Sadowski: No, look, uh, yeah, I mean we have five serve in the same banks that we have Thesis platform. Right. So reality is outside of Clover and outside of uh, uh, maybe some uh, uh, debit heavy such as supermarkets and liquor store topper merchants, uh, there's really no use for the platform because the flexibility that you get especially around funding times and what we've built around Thesis platform with the instant funding that we have on the devices etc. It's is, is just not there um, on Fiserf. Now having said that um, we are uh, going to be doing uh, instant funding on Clovers M so that's another announcement that I would like to make. And yes, instant funding on Clover will be coming. I think we'll have it by Midwest Acquirers in Chicago. Um, we are actively working in it. Uh, we've kind of announced that we will do it. So our partnership with Clover and Fiserv is going to go higher and we expect that it's going to be a big deal just like it is a uh, growing need for that, for that business. And I believe that Fiserf, uh, executive management is actually doing a lot of things to extend their Clover platform because let's face it, this is their crown jewel. Yeah, um, and um, um, I think we want to be part of it. Um, and um, uh, just like we want the ecosystem of Valors and Deja Vu to be part of it. But what we want to do is we want to have Nativia experience within every one of these ecosystems. And if that means instant funding on Clovers and tap the phone between Deja Vu and Valor, that's what we bring into our ISO. So that when the agent and ISO looks at and says okay, I'm going to go and I'm going to pick my processor tomorrow, um, people pick on three different scenarios. Scenario number one, how reliable it is in terms of processing platform. Well look, everybody knows Thesis and Fiserv most two reliable networks in the country, right? The next, the next question is, you know, how long has the ISO been in business? We've been in business for, you know, significant amount of time and the management team has been in business for decades.

James Shepherd: Right.

Vlad Sadowski: Um, how large is the ISO I mentioned earlier? We're approaching, you know, 50, 000. So I think we're, we're, we're gone over this threshold where we should be considered to be an up and coming super ISO. And I think, I think that's, that's a distinction um, a reliable veteran player should consider. Right? Uh, because if you are having somebody pay you $100,000 plus in residuals or $10,000 plus in residuals, uh, you want to get paid on time, you want to get paid accurately and if there is inaccuracies or whatever, whatever that could be that it's fixed and, and uh, rectified. And it's not a question that the ISO or um, uh, the agent that you're under as a sub agent running out of money. Right. And then the third piece, the most important piece is uh, you could call it how innovative are you uh, or how, how much of a product are you willing to put out?

James Shepherd: Right.

Vlad Sadowski: And then we are in the world of solutions. You know, you, James, you know, work unstackably, you know, day and night. Uh, and it's become, it's, it's starting to become part of your, part of your everyday life.

James Shepherd: Yes.

Vlad Sadowski: And it's a lot of work.

James Shepherd: And every night and every weekend. Uh, yeah. Right.

Vlad Sadowski: It's a, it's a lot of work until, until you get to a point that y, uh, this is, this becomes viable. Right, right. Um, and uh, you have to roll it out vertical by vertical. It's a lot of work. But there's also all these micro merchants and we now see you know, square being part of the part uh, of the ISO ecosystem front and center. Um, and uh, you um, have to think about that. You know, how are you gonna, how are you going to attract uh, the business as an ISO, um, and give the tools that would make sense.

James Shepherd: Yeah.

Vlad Sadowski: And this is one step that we're making to having the tools that make sense that gives the ISO an edge to talk about it to the merchant, gives them the ease of use and gives them an opportunity to have it at a cost effective price. The combination of the three.

James Shepherd: Cool. I said I uh, have one more question for you and then I want to talk a little bit about kind of which partners are right for this and everything. But if you're a nice or an agent, how does this change the game for you? Or you know, can you give some practical insights in terms of like are there certain merchants where you see hey this is an MCC that would be really good for this is their sales strategies or tactics. What are some things that, because you now have tap on phone and you know, have the deja vu in the valor. What are some practical insights you'd have for the ISOs and agents on how they're going to use this?

Vlad Sadowski: Look, practical insights is, is very simple is events driven number one. Right. So anytime there's events, flea markets, farmer markets, etc, I see it all the time. Square dominates the space.

James Shepherd: Yes, for sure.

Vlad Sadowski: Right. They dominate the space for one reason and One reason only. Um, it's not like the merchant doesn't do volume. Merchant does 5, 7, 10, $20,000 a month. Mhm. What happens is that they have three, four workers. Those workers don't want to go through the chips. They just want to tap on phone, get it going and be done. Yeah, salons, hair salons, they do a, uh, transaction, you know, three times a day. They don't want to walk around with the terminal. They just want to know that's their cab drivers. They just want to, they just want to know it's there. They forgot that the terminal is not working, the wireless is not working. Something else going on that, that chip reader is not working.

James Shepherd: Yeah.

Vlad Sadowski: Tap on phone, you get to go. Right.

James Shepherd: Yeah. I'm even thinking of all the field service as well. You know, a lot of the downloads.

Vlad Sadowski: Number one, plumbers.

James Shepherd: Yeah. Electricians, all that, electrician plumbers.

Vlad Sadowski: They're all, they're all very, very much prone to those, to those type of services. Um, uh, for sure. And then for the ISO side, um, look, um, we will have an SDK, um, in the, in the third quarter. So now if you do want to integrate with the software company, we can have a separate conversation on this. I don't want to occupy much time on it, but, uh, it will be uh, an edge for you to go and talk to the software company because there's so few providers that can offer tap on phone, um, that you can basically count them on one hand and of that one hand, how much are they charging for it? And I think that's a very big deal.

James Shepherd: Yeah, for sure. All right, well, this has been fascinating. I always love having you on because you always have so many interesting things. Ah, going on. I want to make sure that we give you a chance to explain. People can go to learn more. So, um, you know, let's break it down. If we have an ISO, uh, you know, they're doing 20, 50, 100 deals a month. Talk about, about that and where they would go to learn more. And then also an individual agent. I don't know if there's, I know you have other kind of subsidiaries and companies that you partner with that work with agents directly. So give some ideas of where people can go to get, gain access to this, this ecosystem.

Vlad Sadowski: Right. So obviously we'll be, we'll be at the southeast acquirer, so come check us out. Um, ask to demo the tap the phone feature. Um, look, it's nothing new. It's just the way that it works is what's exciting for me and I think it will be exciting for every agent. You no longer need to choose your device. You can attach this particular piece and that's a clear value prop to your device. Right. So you already have enough problems selling a device. You need to be able to have something that tell the merchant, oh, I get something more and it doesn't cost me anything.

James Shepherd: Right.

Vlad Sadowski: And that's what this Stop to Phone is about. And that's why I think this is going to be a winning proposition for quite a few agents. Um, and so with that said, um, uh, Southeast acquirers, obviously Midwest will be there. Um, then um, you can go to our subsidiaries. Nativia Platinum, uh, or wow. Payments will have that. Um, and Nativia, uh, Pro are the three big ones that we are definitely working with closely and people know who they are. And then obviously James, in your podcast, uh, if you clicked on the link, we're now changing the link to your um, um, to your podcast to talk about the tap to phone feature.

James Shepherd: Right? Absolutely. Yeah. So again the email that you got this in, or if you're watching the video, there's a link below it to nativia.com ccsalespron uh, you can click on that and uh, that'll take you over to learn more about all of this as well as the other things that Nativia has to offer. So um, yeah, Vlad, thanks so much for jumping on here and sharing it with us. Excited to see the continuation of the ecosystem as you continue to innovate.

Vlad Sadowski: Thank you for having me. And um, um, once again we think this is going to be exciting and I think that you guys should absolutely

Narrator: check it out now for today in payments brought to you you by Proscribes Inc. With Patty Murphy and James Shepard. So James, the uh, Federal Reserve is um, asking for public comments on a scheme that would allow direct access to the payment rails. It operates by non bank financial institute financial services firms, you know like fintechs and, and crypto firms.

James Shepherd: Yeah, I saw something about this.

Narrator: Yeah, yeah, currently these guys need to uh, partner with a financial institution that has a so called master account, um, with a reserve bank to access payment, uh, Fed systems, you know like Fed now, Fed Wire, the ach right now the Fed's move comes on the heels of a presidential executive order literally came out like two days later. Which I know the Fed doesn't ever act that fast so it must have been like in Q. But the president issued uh, an executive order that regulators update rules and procedures that may be stifling innovation by fintechs yeah. Last year you might remember that the uh, Fed issued a proposal for skinny master accounts.

Vlad Sadowski: Right.

Narrator: That would not uh, provide access to the Fed's discount window or intraday credit but it would allow the fintech to um, gain access to the payment rails which is really all they wanted.

James Shepherd: Right.

Narrator: So I think what I was really saying, what I was getting to is how rapidly this stuff is happening. Yeah.

James Shepherd: For the, for the Fed they're moving at light speed, you know.

Narrator: Yeah. When you see something like this coming out of the Fed that fast. But just, just the whole change and in the, like the stable coin, you know, integration with the fiat currencies and. Right. Everything. I mean that brings me to my next story which is just, you know, really interesting is that you know, MasterCard was uh, just granted a bit license by the New York state department of financial services.

James Shepherd: Oh wow.

Narrator: Yeah. And this follows the purchase, its purchase of bvnk which is, you know, a fintech that provides payment rails to facilitate transactions and stable coins and fiat currencies.

James Shepherd: Right.

Narrator: You know the, the, the uh, the BVNK transaction came with an EU crypto asset service provider license which is, seems to me to be pretty much the same as a bitlicense in New York.

James Shepherd: Right, right.

Narrator: Uh, um, the approval in New York applies to MasterCard Transaction Services which is a US subsidiary that handles international money transfers. But you know, the speed with which these things are occurring is really big. Like blows my mind, you know, I mean I crazy. I've been around long enough to see how, you know, it would take forever for things to get, you know, get. You know. Now they're just like going at fever pigeon. And a lot of it is, I think because the U. S realizes if they don't, if we don't go fast companies here and our government don't go fast, we'll get eclipsed.

James Shepherd: Yeah, for sure.

Narrator: You know.

James Shepherd: Yeah, it's, it's a lot more pressure these days to move quickly and innovate, you know.

Narrator: Yeah. Yeah. So uh, next up the, the Fed and the FCC are, are teaming up with the treasury department to combat payments fraud.

James Shepherd: Interesting.

Narrator: According to vice verd vice chair Michelle Bauman, she announced this during a speech last week. Um, really? She had some interesting statistics. Total losses from non credit card frame fraud across the financial system were $84 billion in 2024.

Vlad Sadowski: Wow.

Narrator: And of that amount just 21 billion was recovered.

James Shepherd: Oh, wow.

Narrator: So net loss of 60 some odd billion dollars. And that's only what's reported.

James Shepherd: Right, for sure.

Narrator: You know, the Fed's Data indicates that one in five Americans experienced financial fraud or scams in 2024. While credit card scams were the most common, you know, bank and investment account frauds, uh, were pretty common as well. Um, the median loss for victims was $500 in 2024 before recovery.

Vlad Sadowski: Wow.

Narrator: To put this into perspective, the Fed estimate said, uh, it's done some data collection that shows that 13% of Americans cannot cover a $400 emergency expense with cash or its equivalent. That's been pretty much the same for, for several years now. Huh.

James Shepherd: Right. So a 500 fraud loss would be a big deal.

Narrator: Yeah, a huge deal. You know, as Bauman put it, the, uh, fraud threatens the integrity of the financial system at its quote, at its foundation. Nearly every fraud affects a bank account or is tied to a payment that involves a bank account. You said. And you know, the Fed and the regulators, it's their duty to, to

Vlad Sadowski: um,

Narrator: maintain the integrity of the banking system for sure, you know, so, so Bauman's remarks were thin on specifics, but she did say there will be a lot of information sharing.

Vlad Sadowski: Okay.

Narrator: Uh, related to what agencies are doing to combat fraud, what prevention mechanisms have proven track records and what cross governmental efforts would advance the fight. M, um, I think it's really important. I mean, you know, we've talked in the past about fraud and how bad, you know, fraud is. And I mean, I, I, I've been hit, I mean almost everybody I know has been hit at least once, you know.

James Shepherd: Yeah, yeah.

Narrator: And I mean, I've gotten a lot wiser to the scams, but still they, they come at a, at a fever.

James Shepherd: Yeah, well, and they keep getting better and better. AI obviously is accelerating that and so they're just going to continue to get better at it. And so it's a, uh, and it's a never ending fight. You're always like coming up with tools to fight the, the fraud that exists today, but then they're going to change it for tomorrow. And so it's always a battle.

Narrator: Well, that's it. It's like, you know, AI, right? It, it helps you, uh, combat fraud, but the fraudsters are using AI too, so.

James Shepherd: Exactly.

Narrator: Yep. You know. Yep. Yeah. Yeah. So, uh, but, but uh, another one I thought was interesting again on, on the fraud and scammed, MasterCard is, uh, taking the wraps off of what it calls Merchant Trust Services, which is designed to help acquirers and payment services providers root out scam merchants during the onboarding process. Um, it said that this, uh, new service will leverage the card brand's network Wide intelligence, cyber and identity capabilities and be able to help distinguish between legitimate and bogus merchants both in the card present and the online environment. Um, also compressing the window between suspicious merchant activity enforcement. Um, the company said in order to do. The company is requiring acquirers and payment facilitators, uh, to actively monitor merchant behavior and to initiate an investigation within 72 hours of when a potential scam activity hits a certain risk threshold. Yeah, so it's really getting, you know, I mean the, the, the implication that I got was, you know, when so many businesses went online during COVID it really led to a lot of scam businesses.

James Shepherd: Yeah, for sure. Yeah. Businesses maybe they weren't quite ready to, to go to prime time there, you know.

Narrator: Yeah, exactly. And so they're playing catch up now, you know.

Vlad Sadowski: Yeah.

Narrator: Ah, um, on the other side of the. Of of of things, um, an issuer service called Merchant uh, Scam Risk Indicator has been, has been released by MasterCard to help issuers identify merchant risk signals during the authorization process, which could help, you know, fraud as well.

James Shepherd: For sure.

Narrator: So, um, so yeah, you know, um, it was interesting, uh, who was it? Ah, an EVP for security solutions at MasterCard, Ann Johnson said, quote, if we want everyone to benefit from the digital economy, from a small business starting out to a family shopping online, then trust has to be built in, not bolted on after something goes wrong.

James Shepherd: That's a good. Yeah, I like. That's a good quote.

Narrator: Yeah, I thought that was a really good quote. You know, I mean, and, and because there's so much in, in this industry that gets bolted on.

James Shepherd: Yeah, for sure. Yep.

Narrator: And this is like, let's get, let's get, let's get it from the beginning.

James Shepherd: Yeah, I like it.

Narrator: So, and before I leave, I. Something came across my desk just before, you know, just before I was about to get, get online that I thought I would share with everybody. And it came from, um, the straw hacker group. It's some data point interesting data points on same store sales.

James Shepherd: Okay.

Narrator: It's a year over year comparison for March, which is, you know, a couple years a couple months ago. But still it gives you a feel. Right, Right. So the total average same store Sales growth was 2.3% year over year.

James Shepherd: Okay.

Narrator: The biggest jump was in petro, 10.8%. No real surprises there.

James Shepherd: Yeah, yeah.

Narrator: Everything just going on. B2B saw negative growth. It was down 0.1%. Uh, also on the negative side was eating and drinking establishments which were down 2.1%. Construction saw 10% increase and QSRs were up 1.8%.

James Shepherd: Interesting, huh?

Narrator: Uh, yeah.

James Shepherd: Surprising that QSR would be up, but then the restaurant, other more fine dining is down.

Narrator: Yeah, that's what I found very.

James Shepherd: I guess maybe is that. Maybe is that kind of the, the tightening of the economy a bit and people are going, well, I think I'm gonna go to Chick fil A instead of to the, you know, Outback Steakhouse.

Narrator: Outback or Ruby Tuesdays or whatever.

James Shepherd: Right, right. Interesting. Yeah.

Narrator: And it's interesting. I mean, I'll, I'll be honest. I actually gave up fast food. It was part of my, you know, I, I decided I had a. I gave up can't about a year. Not a court. Last fall, I gave up candy and fast food, which for me was a big deal. Um, yeah, but I was uh, I, I was driving through one of the fast food places because I didn't give. Haven't given up soda yet. Um, for a soda. I. And I couldn't believe like some of the prices. I mean. Yeah, they're not that cheap anymore.

James Shepherd: No, it's. Yeah, it's crazy. I mean, for me, I feel like the only fast food place I do anymore much. It would be like Chick Fil A. You know, once a week I'll go there. And uh, and yeah, I mean you take. Yeah. If I bring my kids through there, I mean I'm gonna spend 25 bucks, 30 bucks on, on a meal, you know, with four people. And it's. Yeah, it's, it's not cheap.

Narrator: Yeah. You know, I remember the days when, you know, happy, uh, meal, lower income families would take their kids there because it was cheaper to eat that.

James Shepherd: Right, right.

Narrator: Anymore.

James Shepherd: No.

Narrator: And so when you think that, you know, qsrs are going up, part of that of course would be the price increase increases.

James Shepherd: Right.

Narrator: But, but part of it is if they're going up that much and you know that, that the uh, sit down restaurants are going up even more.

James Shepherd: Yeah. Right. For sure.

Narrator: Yeah. So.

James Shepherd: Interesting.

Narrator: Well, that's it for this week.

James Shepherd: Awesome. Well, as always, thank you, Patty for keeping us up to speed on the industry. We appreciate it. Thank you for listening to the Merchant Sales podcast. Whether you are an industry veteran processing executive or, or just trying to learn about the payment space, we appreciate your time. We hope you will tune in next week for more information and tips on building your merchant services business.