Nuvei ( NVEI -7.89% ) founder, chairman, and CEO Phil Fayer joins Fool Canada Analyst Nate Parmelee and Industry Focus Host Nick Sciple to discuss how Nuvei is working to achieve its purpose “to make our world a local marketplace.”
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This video was recorded on Nov. 24, 2021.
Nick Sciple: Hey, everybody. Nick Sciple here with a quick Industry Focus programming update. With U.S. Thanksgiving falling this week, there will be no episodes of Industry Focus on Thursday and Friday as Dylan Lewis and I take some well-earned time off with our families. However, Industry Focus will return to its regularly scheduled programming on Monday, Nov. 29 with Jason Moser and “The Financials Show.” Welcome in, everybody. I’m Nick Sciple here with Motley Fool Canada analyst, Nate Parmelee. Our special guest today is Phil Fayer, the founder, chairman, and CEO of Nuvei Corporation, a global payments business with a purpose to make our world a local marketplace. Philip, thank you for joining us.
Philip Fayer: Thanks for having me, guys.
Nick Sciple: Excited to be here with you. Just off the bat, want to unpack the purpose of the company to make our world a local marketplace. How is your company doing that on a day-to-day basis? What are the problems you’re solving for your customers?
Philip Fayer: We’re providing the tools to help our customers connect with their customers in every corner of the world. When you think about it, how we buy in Canada, the United States, we use our credit cards. But that concept changes rapidly as you enter different parts of the world and merchants need to normalize it. Today’s a global marketplace. You need to push your wares, your services, your goods online to be able to connect with customers in every market, in every currency, in every mode of payment that is relevant to them without any difference. What Nuvei does is we unify all those solutions through a single integration so that you could focus on what’s important in your business. We help normalize the experience of every preference and new market that you choose to operate with so that you can grow your sales, establish that market, and then utilize our tools. We’ve gone well beyond just acceptance. We’ve built our payout solutions, our risk services, our back-office, our reconciliation tools so that you could focus on your business.
Nick Sciple: Can you talk about how the business has evolved over time? Today, you talk about accepting, accepting tons of different forms of payments all over the world, but you didn’t start out that type of skill. Can you talk about maybe the lifecycle from founding to where you are today? Just truly global business.
Philip Fayer: Yeah, I know it’s been a fascinating journey. When I started the business back in 2003, the objective was just to help merchants accept payments. Ultimately, that foundation hasn’t changed, but payments and fintech has changed so much, guys, over the last 20 years. If you think about the history of payments, since 1987 we came to draft capture, You guys remember little book that [laughs] when we’re all younger people looked at the book, but then the electronic draft capture came, the knuckle-buster went away, but then payments stalled. Like it just chugged along on its way, proliferations are happening, more business start accepting it, and it started reinvigorating itself in 2010, 2012, was softer and payments were coming together and really fascinating things were happening across our ecosystem. We’re really small business-focused, terminal-based focus, and our business made a pivot and we started looking at the different problems that were around. The different areas of how you had to scale and how businesses today had to touch the global economy.
Being an established business, we pivoted and we pivoted to focus on while still within payments, of course. We focused on global businesses and helping them operate in markets all around the world. It was a massive challenge for the company to pivot itself. Then more importantly, a fascinating approach because even in our roughly 20 years, we’re still in the ground floor. We built our European business, we built out our North American business. We made an acquisition recently in Latem, but you’re just scratching the surface, guys. There’s still APAC and there’s the whole the Middle East and there’s still Africa, like we still have so much to do and so much to help our customers connect with there. It’s really a fascinating journey and it’s an evolution. I think what’s really fun for every entrepreneur, every builder is the activity in the space. The amount of expansion of market capabilities for our customers. Now, it’s the responsibility of every payment company to do just that because we’re the keys to help our customers grow and we take that job very seriously.
Nate Parmelee: I was just curious, how often do you see customers coming to you because you’re a player that does more than just the vanilla kind of MasterCard, Visa, Discover, AmEx processing. Actually, brings a full suite, particularly a lot of these localized payment types.
Philip Fayer: It’s all the time and it’s fascinating me because if you look at the ecosystem, today, you can be really well-serviced within the borders with your local provider. Your regional provider could do a really good job, but the minute you want to go north and south and the minute you want to go around the world, that’s when your requirements change. What’s amazing about our platform and our technology is that it’s available a la carte. We’re able to solve really complicated needs or really simple needs that are relevant for you at this time. By the way, I’m sorry, my son is very loud in the backward.
Nate Parmelee: That’s no problem. [laughs]
Philip Fayer: If you guys need to accept Alipay or WeChat Pay or Boleto, or whatever that you guys need to accept, it helps us start the relationship. As merchants’ requirements change, their solution stack with us get to change and something that’s really interesting, you think about the flexibility of our technology, a merchant may have cash management with a bank in the UK and a requirement to use a credit card services and bank in the U.S. because they’re loan services, but when they start looking at our technology, we can integrate all that within our flow so that still technically, you could collapse multiple vendors per country, utilize your local solutions, and have a single provider for your global capabilities. That’s what’s so important about detaching payments from technology and then driving the value add. If you look at the power of our platform, you’re talking about 500 different forms of alternative payment method. Plus where we do 45 local acquire where we are the enabler of card brand payments. Plus we connect to hundreds of banks around the world. We really try to encompass all the solutions that our merchants may require based on their business model.
Nate Parmelee: Do you know off the top of your head which customer, you don’t have to name the customer of those 500 options? How many at the most?
Philip Fayer: I’ll answer to this way. Our objective is, no matter which way, even if a customer of one of our customers does one transaction, it’s one transaction that we saved. Because our entire ethos is to help our customers connect with theirs, it doesn’t matter if it’s one, if it’s 100, or it’s 1,000, it’s for them to create relationships with their customers and that’s what drives us. Ultimately, if you think about it, we added cryptocurrency acceptance this year. We see lower volume, but it is topical. Alternate payment methods in some markets you have credit card penetration that’s less than 70 percent. With credit card basic acquiring, you’re only addressing 30% of the market. You need the alternative payment methods. The whole scope is a flexibility that’s right for that particular business.
Nick Sciple: You’ve mentioned a few times, your customers and the customers that you’re serving. You talk about having a verticals based approach to how you go to market. Can you talk about some of the verticals you’re serving and what those customers look like.
Philip Fayer: One of the things that we’ve driven is, we want to build solutions for very specific problems. We found that to drive the most value, it’s hard to be everything to everybody. that’s just our philosophy. Want to do really well, we want to be experts in our sphere and we want to be able to have, not just the technology but the people around, they know what you’re doing. We end up looking at creating curated verticals that we focus on, that will but all of them have some foundations. The first one is and simple this one is, we’re going to be around. That’s a big topic when you end up thinking about shift the business. The second one is they have tailwinds and we want to help them execute on the tailwinds The third is they have to operate globally. We focus on very specific verticals. Ironically to us, we started with the hardest one. The business derives its roots in our technology group to online gaming. It’s been a fascinating journey. Online gaming, U.K. went to mainland Europe, went to Eastern Europe, massive growth of TAM. Now, of a sudden the U.S. has opened up. more and more states are accelerating. Canada’s adding.
You have Mexico, you have Colombia, you have Argentina, you have Brazil. You’ve seen an unprecedented growth. These companies need solutions to be able to run their global business. They need a lot of our technology stack. Payment in, hundreds of different forms of payment and hundreds of different currencies, fully reconciled, pay out. When you guys have your winnings, you…