Scott Conti, CEO of BB Merchant Services, on Smarter Payment Procurement

Speaker A: M welcome to the Sourcing Industry Landscape podcast. Powered by Sig. Org and hosted by Dawn Tura. Well folks, welcome back to the podcast series. I am so excited to introduce you to someone who I don't know if you know and his name is Scott Conti, CEO of BB Merchant Services. Now we're going to get into a little bit of a dry subject, but as want to tell you some things that aren't dry because Scott is very interesting. First off, there's a very big fish, if you haven't seen it, be sitting behind his head. But we're going to get to that. Scott, you can't just come on with a big fish and not expect me to ask you a question. But I also want to talk because what we've heard about you is that you have created incredibly successful business relationships. That you create value for all parties involved, not just one sided. And that we've heard that you foster long term partnerships built on trust, transparency and mutual success, which I love to hear about. Now you serve as the CEO of DB Merchant Services, which is a global payments consultancy dedicated to helping merchants reduce payment processing costs without the disruption of changing providers. Now this is a very important topic for a lot of our members and we're not going to have it be a dry topic because it's a very important, exciting topic.

Speaker B: But.

Speaker A: But then outside of work, Scott enjoys spending time with his two children playing ice hockey and golf and taking advantage of the outdoors whenever possible. So Scott, welcome to the podcast.

Speaker B: Uh, thank you very much Don, and thanks to you and your team for being so gracious and having us today. We're very excited to be part of the uh, SIG family.

Speaker A: Thank you. And I think, you know, when people hear merchant services, I think they immediately say that they process credit cards and that's it. And so I want to go back to the very beginning, if you don't mind Scott, and you can decide how far back we go. But what inspired the founding of BB Merchant Services and what was the problem? Because obviously you saw a problem that you wanted to solve. So what were you setting out to solve originally?

Speaker B: Yeah, uh, absolutely. And it's a good question and it's good to put things into context a little bit. So I'll say, uh, BB Merchant Services was founded in 2008. Um, and we had a. It was founded based upon a simple observation. It's many organizations were treating payment processing as a fixed operational cost. It's cost of doing business is what it is rather than a category that could be actively managed and Optimized. So what we try to do when we first started, we saw businesses spending tons of amounts, uh, and fees on all of these payment processing costs. But very few of those, those companies and corporations had market data that would tell them whether they're paying a fair price. They just got, it was just, it was told the cost. You know, here, here's your cost. And everyone just accepts it as cost of doing business, as I mentioned. And in many cases the contracts have been left untouched for years. Pricing structures have become m. More and more increasingly complex and organizations simply last the lack the expertise or the disciplines to, to challenge them. You know, how do you go to negotiate if you don't understand where all the fees are lying? So our founders believe that there had to be a better way. And rather than, and a lot of times you'll hear people say, oh, uh, you know, to save costs you have to switch processors. And that's not always the case. Our founders believe, uh, that rather than acting as a payment provider ourselves, we wanted to establish, uh, to become an independent advisor, um, helping organizations understand their payment costs, benchmark them against a wider market, and then you can make informed commercial decisions on are you paying the right rates or not? And really over time that's involved exactly what we do today. We work with finance, procurement, payment processing teams all around the globe. We help them improve transparency, strengthen uh, their commercial, uh, discussions and ensure that their payment arrangements remain aligned with fair market value. And that's a big piece for us. It's fair market value. We, we're not the ones to come in and try to get you the cut the fees where the processor and you don't have a win, win relationship. We want fair market value. And that's really a big thing. So at its heart, the mission remains exactly the same as it was in 2008. We help organizations make better informed decisions in a highly specialized area that often lacks transparency.

Speaker A: Okay, so when we say merchant services, we're Talking about Visa, MasterCard, Amex, Discovery, right?

Speaker B: And we, we put it all underneath one umbrella. So that's alternative payments, that's international solutions, that's multiple processors. So it's not just, oh, I, I have one processor and here's my, you know, and here's my fees. It's like there's a big scope of what does that mean? You know, for instance, a lot of your, a lot of your members will take, uh, PayPal and they'll take, uh, the digital wallets of how to pay and how to accept payments. All of that falls underneath the merchant services, it's, you know, it's, it's the, um, the rails that someone, uh, accepts payments and that's what we do. And we look at.

Speaker A: So it, so you put up the guardrails around all payment solutions. So that would include like the square device that people use. That would include PayPal. Does it include things like Venmo and stuff like that?

Speaker B: Yeah. Uh, so m. Ah, commercially, Venmo hasn't really become a, uh, you know, a mainstream, I mean, obviously on the side. Absolutely. And if, if it's vendor, of course they're taking Venmo, but you know, the big corporations, some of them haven't started to take that yet. But we would absolutely put that into our umbrella as we have data on anyone that any one of our 3,500, 4,000 merchants. Now, you know, some of them take Venmo. So we have that database to draw on to understand, you know, are they paying or are they not.

Speaker A: Wait, you said 3,500 merchant companies out there?

Speaker B: Yeah, no, 3,500 of our merchants. That, that we're our clients.

Speaker A: Okay.

Speaker B: So that, that's how we build our, our database. And we know what optimized looks like. So sometimes it's like, okay, I have. Here's my fees. I understand how I broke them down. Is it good? You know, is it. How do I compare against my peers? And that's the, uh, ability that we bring to the table. And it's not just some AI sort of range. Um, it's, it's. We know what's optimized because we have seen it before. We've seen someone like you before, and we're going to compare you against someone like you.

Speaker A: Yeah. And that's interesting because I always thought it was it. You were quoted a price and that was it. It wasn't negotiable because it was based on your volume. I mean, they have all kinds of reasons, of course.

Speaker B: Right.

Speaker A: But do you think that it is negotiable for most companies?

Speaker B: Yeah, I, I know, I know it is. I mean, it's. We, we do this, this is what we do day in and day out. And you know, some people will get greedy and try to, you know, make, um, it. And I'll say an unfair deal where some people try to cut it down to the base and you're not going to win that way. You're not going to win by saying, okay, somehow you're better than, you know, Amazon. You know, you're not going to get Amazon payments when you're only doing X and they're doing, you know, a million X. We really specialize on, you know, finding out. And the range of the clients are from the small little bar and grills down the street to, you know, gigantic merchants that, uh, you know, that you can find on our website. All referenceable.

Speaker A: Yeah. You know, and that, and I will say for all the years I did sourcing, I never considered that a category to source 100%.

Speaker B: And that's what we found a lot of times where, you know, people can understand what their fees are. They take their total, you know, total sales divided by total fees and they have a percentage rate. But the question is, is that right? Is it not? So when we do our analysis, we'll go in and understand exactly where all of the fees are. And then we'll tell our clients to say, here, here and here are, ah, the three areas that are, uh, that you're overpaying and that there's room for improvement. And guess what? Here, here, here, you're good. And in some cases, I'll tell you this, Don, which is, it's oddly enough, a very positive discussion, is when I tell someone, I'm like, go worry about marketing because payment processing, you're getting a fair rate. And, uh, I've seen more CEOs smile about that versus smile about that, that there's room for improvement. You know, when they know, they're like, I've always thought I had a fair rate. You know, my processor tells me I have a fair rate. But it's good to know. And that's what we do. And we provide that level of comfort.

Speaker A: Yeah. And I don't know if you know, Scott, but I'm a recovering cpa. So whenever it comes to payments and processing, I get all excited thinking, there's gotta be a way to improve this. There's gotta be a way to reduce my costs. So, and just get, yeah. So to know that there's someone that we can go to as a consultancy, this is pretty cool. But you know, every journey, I mean, you're, you're, you've been in it, uh, or the company's been around now 19 years. Yep. And you'll hit your 20 year mark next year. So every journey has football moments that happen during that timeframe. And can you share at least from your personal experience with the biggest challenge VV Merchant Services faced along the way, and how did you overcome it, shaping the company into what it is today?

Speaker B: Yeah, absolutely. And this one, this one was a pretty easy one. And I think most companies will go through this Sort of, um, metamorphosis, if you will, from starting to where we are today. And one of our biggest challenges was establishing credibility in an industry where most organizations assume that their providers were already giving them the best price and the best commercial terms. So that's a little different. Right? People are already thinking they've got it, so I don't need you. But over in the early years, we encountered businesses that had strong relationships with their providers and understandably questioned us to say, is an independent review, is it going to add any value? Because I've got a good relationship with these folks and you know, am I paying the, uh, you know, they say I'm paying the right amount. So, uh, what helped us overcome this challenge? And this was a big one, right? What helped us overcome is rather than giving opinion, a lot of people will give your opinion. Oh, I think you should go here. Or. I think this is what I think, I think, I think what we do is we focus on evidence rather than opinion. You know, we heavily invested in ourselves in building benchmarking capabilities, uh, gathering market intelligence across all of our, uh, engagements. And so now we have that information. So instead of telling organizations what they should do, what we now is we can show them pricing compared with a wider market and allow them and us make the appropriate decisions. So it's like taking data and turning it into information, you know, before, here's what it is. And now it's like, can I do anything about it? And that's where we can come in. Um, another, another lesson that, um, was recognized is that, you know, when we're talking to the people across the table, for us, so it's the compute, uh, uh, procurement and supplier management are more than simply becoming cost reducers. You know, many of our most successful projects have involved clients helping, you know, not only getting them better commercial terms, but we also maintain good relationships with their existing providers. And through the experience, sometimes they come together and, and there's. Everybody wins in that stage, you know. So now you have a happy client and you have a happy, uh, processor that makes things, um, very peaceful, if you will. In that sense, the majority of our clients will stay with their current provider. So that is something that's really, that's really good. And that experience has shaped our approach. And today we see ourselves less as negotiators and more as trusted advisors who can bring transparency and market intelligence and benchmark data to a relatively, uh, cloudy environment.

Speaker A: Yeah, that's absolutely right. You're adding clarity where we didn't have clarity before because. And if Procurement folks, you know, that are listening to this, this is something that's going to please your cfo. It's someone, it's something that's going to make sure that your people in accounts payable and payment processing are happier as a result. This is exactly the type of thing that will get the CFO's attention. And I don't know if you know, but majority of our procurement, um, CPOs report to the CFO. And so if you can bring something to the CFO that also affects treasury and payment processing and money, I mean, that's a big win right there. So I encourage everybody listening that if you are in procurement, think about how you can help other business units within the company in a way that you never thought was maybe part of your purview and have this conversation with people in finance, treasury, accounts payable, payment processing, and say, hey, let's talk about. This is a category that we could actually look at and get advice about and possibly improve our entire payment processing along the way. Wouldn't you say?

Speaker B: You are spot on, 100%. And in fact one of the, you know, one of our biggest, I'll say, lead generators for us is, you know, there's the uh, the fractional cfo, uh, wave that's you know, going across the country. Uh, and guess what, the CFOs, you know, they understand, know treasury, they understand finance, they understand bit, but what they don't understand is payment processing becomes that blur. So we actually, you know, help a lot of the fractional CFOs to say, oh, wait, you, you take payments. Let's uh, let's have BB Merchant Services take a look and uh, help us out and understand if there's room for improvement there. So immediate value for, you know, for a phone call.

Speaker A: Immediate value, immediate value. Because like I said, this is not a category that I thought was, I've never considered it. In my 25 plus years, I've never considered this a category of spent.

Speaker B: So you're in the uh, the silent majority, right? It's like you don't know. If you don't know and you know,

Speaker A: it's a light bulb just went off like, holy cow, I need to tell people about this. So, okay, so Scott, as a new member, relatively new member in the sick community, and we are so excited to welcome you. What does the next chapter of BB Merchant Services look like for our members? Because, you know, we serve our community, which is primarily the practitioners in the sourcing procurement space. So what kind of opportunities do you see coming to us?

Speaker B: Yeah, no, this is great. And we're joining SIG at a very interesting time because there's some new products coming out and some things that, uh, I'll tease you with, but, uh, it's very exciting. Um, and, well, and first and foremost, I do want to give a shout out to a good friend of M Mine, Candace Kumar, who, uh, I know is a, uh, a beloved, uh, member of, uh, the Siga family. And, uh, she and I were able to, uh, work together. And, you know, she said, you really should talk to. Talk to sig. So, uh, thank you for having us, because this is. This is great. But, um, as far as what's next and what we're thinking is, you know, the procurement leaders are increasingly being asked to deliver strategic value and not simply cost savings anymore. Uh, they are expected to understand complete ecosystems and manage risk and governance and identify, uh, all these traditional opportunities. But then there's a whole pile of things that may sit outside of the traditional procurement categories. As you were just saying, Don. And I think payment processing is one of those, that it's not black and white. There is some, uh, nuance to it. So for many organizations, payment processing has evolved, um, over the significant decades. So businesses are now managing multiple providers, they're managing alternative payments, and, like we talked about, Digital Wallets International, you know, and even the technology today isn't the same. It's not like, oh, here's your API, and you connect. There's all sorts of different things in there. Because now people say, okay, that's great, but what if I have two providers? What if I have three providers? So that's all evolving right now, but the oversight for those is not evolving at the same rate. It's not like you have a governing body that watches things. That's where we come in. We can help understand, you know, the complexity and bring it down to a level that everyone says, ah, uh, now I understand. Now I can make decisions. So for us, we see a significant opportunity for the procurement and the finance teams to work more closely, all of us collectively. And when we review payment processing costs and supplier relationships, we can only bring value to these things.

Speaker A: Yeah, and you said it. You said it right. Procurement and finance need to come together, and they need to talk each other's language, they need to respect each other's spaces. And this is a great opportunity to open that door and start these conversations. If people haven't done it before or if they're struggling for a relationship with their finance department as well, this is a great way to move forward with It. So I want to just. So one of the things that we should follow up is there's some folks I'd like to introduce you to after this podcast is over that, um, that I think just need to know about you and have you in their toolbox. Yeah. Um, so I would love to take an opportunity to do that, but then just, we need to get this message out there. Yeah. So what are we going to do? We've got to, we've got to start getting. People understand that BB Merchant Services isn't a payment processing company, they're an advisory firm. So we have to get that out there to our members. Right.

Speaker B: It's that. And it's also that we're not asking you to switch providers. So once when people hear payment processing, they're thinking, oh, it's another sales pitch. And guess what? All of us highly trained salespeople can make anything sound really well. You know, it's like, oh, that's good. But what we're providing is that oversight. And one of the things that will set us apart, and this is one thing that I want your members to understand is that it's not a set it and forget it sort of to use to coin, uh, infomercial phrase. What we do is we not only help get you the better commercial terms, but we also audit it every month to make sure that the other fees don't sneak in. We provide a report every month to say, here is the value that we are actually bringing. And it's not based on hypothetically, I can save you X. It's, we can save you this.

Speaker A: I love that.

Speaker B: Ongoing.

Speaker A: And now we have to talk about the fish. There is a fish in the middle of the room that we need to talk about. So tell me real or so I

Speaker B: caught it off the coast of Florida. Um, and this is a sailfish and it's a game fish. So that means it's uh, a catch and release. So what I, what I did is I, I got it into the boat myself and two others. We held it up, you know, splayed out the, the fin, got our picture, put it back in, made sure it was safe and ran off. And then, uh, I said, well, what's next? And they said, well, listen, now we're going to bring it to a taxidermist and we'll get you a mount of your fish. And I'm like, fantastic. So Don, the fish I caught was actually much bigger than this. But

Speaker A: of course it was.

Speaker B: Of course it was. But that, that fish was. So it was a nine foot Fish when I brought it in and I'm like, I want a nine foot moun. You know, I flew home and then I'm got my tape measure out in my house and I'm like, where am I going to put a nine foot fish? I'm like, you know what, can you make it a six foot? So they're like, yeah, we'll make you a six foot. And uh, this, that's what's hanging on. And I don't know if you can see there's a little bit, little thing. That's the actual hook that I caught him on right there.

Speaker A: Oh my goodness. That is so cool. It's absolutely beautiful.

Speaker B: Oh, thank you.

Speaker A: I love the fact that it's a catch and release because it needs to be out in the wild. It's just gorgeous.

Speaker B: Absolutely. Uh, we wouldn't, we weren't uh, doing it any other way, but it was a.

Speaker A: How long did it take you to reel that thing in?

Speaker B: So, uh, it actually in this one it was only about 40 minutes, which was uh, which is pretty good for. Yeah, I say only because I've heard horror stories on some of these taking a lot longer. But uh, yeah, it was a fight. And, and I'm a fisherman at heart. But even just watching something of this size come flying out of the water, it was amazing. I still get uh, I still get the goosebumps thinking about it.

Speaker A: Okay, so from a novice is this when you're strapped in a chair and you're, and you're rod is bending and

Speaker B: I wasn't in a chair but I had that, that pole mount and uh, the rods like this and I am watching the fish and, and like all the hands are saying real, real. I'm like, oh yeah, yeah, yeah, yeah, yeah.

Speaker A: Great.

Speaker B: Because now I'm just, I am in awe of what I am seeing. It's certainly bigger than the uh, the bass that we catch around here up in the, up in New England.

Speaker A: Oh, I love it. Well, it's absolutely beautiful. Congratulations on that. But folks, if you don't have Scott in your network, you need to put him in your network. He's someone that you need to know. You can tell from just the conversation I'm having, he's approachable, he's nice, he's a CEO, but he's not a snooty CEO. He's a down to earth type of person. And so pick up the phone, get on LinkedIn, find him, make sure he's part of your network. If you want an introduction, feel free to reach out to me. But Scott, uh, I love your story and I love learning more about your company.

Speaker B: Oh, uh, thank you, Don and the entire Sig family that we've met so far have been fantastic and we're really excited about the things we can do together.

Speaker A: Good. Well, we are too. And now that I know more, I'm even more excited. So thank you. So folks, that's going to complete today's podcast. But please make sure you tune in wherever you get your podcasts and if you want an introduction, feel free to reach out to me and I'll make sure that you have Scott in your network as well. So have a great day. Wonderful morning, afternoon or evening wherever you're listening from. Take care. Thank you for listening. Subscribe to the Sourcing Industry Landscape podcast through itunes or your favorite podcast app. Want to nominate yourself or someone else for an interview? Email us@podcastig.org.