Fintech South 2023: Michael Reed with Deluxe

Intro: Broadcasting live from the beautiful Georgia World Congress Center for FinTech South. 2023. It’s time for Atlanta Business Radio. Now, here’s your host.

Lee Kantor: Lee Kantor here broadcasting live FinTech South 2023 celebrating fintech leaders from around the world. Right now we have Michael Reed, division president of payments for Deluxe. Welcome, Michael.

Michael Reed: Thanks so much for having me.

Lee Kantor: For the two people out there who don’t know, tell us a little bit about Deluxe, how you serving folks.

Michael Reed: Yeah. So Deluxe is a 108 year old business. The founder of Deluxe invented the checkbook. So we say that we’re the original payments company. You’re the.

Lee Kantor: Og?

Michael Reed: Yes. I lead our digital payments business, so it’s my job to find digital solutions for customers, whether it’s credit cards, debit cards, you know, paper based payments, different things like that. But so I’m on the different side of the business.

Lee Kantor: But so how’s business going? Is this a world that just kind of seems like it’s going to keep growing forever?

Michael Reed: Well, you know, we’ve done a really good job of getting, you know, some frictionless experiences from consumer to business payments as an ecosystem. And so I’m focusing most of my time now on business to business payments, where it’s probably surprising to a lot to realize that 60% or so of businesses still send paper based payments to their customers.

Lee Kantor: Is that six?

Michael Reed: 66 060. So just as an example, we process $3 trillion in payments today that originate as paper.

Lee Kantor: Wow. That that is shocking. Is that shocking to you as someone in the industry that it would still be that high?

Michael Reed: It was very shocking to me when I came to Deluxe. I had been working on the consumer side for a long time, working at companies where we were helping businesses, consumers pay businesses, you know, credit cards, debit cards, those types of things. And we had, as an industry, done a good job of getting rid of those paper payments, you know, quite some time ago. So to learn that there are so many out there, it’s really the next frontier for payments. And there’s a lot of opportunity for all of us to go help businesses better pay each other.

Lee Kantor: Why do you think it’s still, like so slow for them to adopt this newer technology?

Michael Reed: Well, we’ve been looking at that quite a lot. And, you know, we try to find out what the job that this piece of paper is doing today that that a digital platform or solution can’t do or doesn’t do as effectively So.

Lee Kantor: Your jobs to be done.

Michael Reed: Person I am a jobs to be done we subscribe we subscribe to the jobs theory or I do and so we deploy that. We deploy that at deluxe. So the you know, the paper check does a bunch of different things where the process of sending it through the mail rather does a bunch of things. One is as we’ve been talking to payers that are looking to send money to another business, if they don’t know that they’re ever going to have to send a payment to that provider again, They don’t really want to store ACH or card information. There’s some some inherent risk in doing that. And you know, it’s maintenance of those databases and different things. So that’s one piece. The other is in many cases, they have to tell the recipient what the payment is even for. So if you think about a medical claims payment, you know, if you’re out on vacation and you sprain your ankle and you go to the closest clinic, you as a as a, you know, you go, you pay your.

Lee Kantor: Co-pay, you do that digitally.

Michael Reed: You’re out. You get your out-of-network copay. Well, today, when your insurance company settles that claim with your with that provider, they mail the final payment. And the reason that they do that is they don’t know if they’re ever going to have to pay that person. They need to tell them why it is they’re making that payment. So, you know, they sent a bill for $1,000. They’re paying 800. They need to tell them why they’re only paying them 800. And they have the address of the clinic. So they stick these things in the mail. And, you know, we’ve got a digital solution. We call it the medical payment exchange that we’ve done in partnership with with another payments platform provider, Echo Health. And we’re working to digitize those payments. So now we notify that provider that they’ve got a payment coming from this insurance company and how do they want it? And we then maintain those databases of information and send those payments digitally and reduce the need for paper.

Lee Kantor: In that case. So when they say, how do you want it? Does anybody pick check?

Michael Reed: Well, check is still an option, right?

Lee Kantor: But that’s an option. But anyone picking that option? No, that’s.

Michael Reed: Not normally, you know, they’re happy with an ACA or they’ll even sometimes want to put it on their PayPal account or what have you.

Lee Kantor: So that’s that’s wild. So so that’s part of your job is just to help people make this transition.

Michael Reed: That is the whole job.

Lee Kantor: That’s the whole job.

Michael Reed: Is to to.

Lee Kantor: Make that 60 turn into six.

Michael Reed: We we obviously do you know, do what we can. We’re privileged to support about 70%, 76% of the top 300 financial institutions in the United States providing these types of services. And we’re bringing digital capabilities to them. It help them to provide these types of solutions to their customers? Bill, Pay different things like that. And, you know, it’s our job to do a good job with what we’ve been entrusted with so far, but help them to to provide better payment options for their consumers and help them educate their consumers so they’ll use them.

Lee Kantor: Right? So that’s a lot of your job is having these conversations to really understand the pain points and understand what it is that job that check is doing in that firm and how you can kind of make that digital solution rather than a paper solution.

Michael Reed: That’s right. Yeah.

Lee Kantor: So how do you attack a conference like FinTech South? How how do you get the most out of your time here?

Michael Reed: Well, you know, we you know, I’ve been I’ve been personally transferred in and out of Atlanta a couple of different times. My family and I really enjoy being and living here in Atlanta. It’s a fantastic city for us and for our industry. There’s really only one other market that I’m aware of that has the number of companies that are in payments, and that’s London. So Atlanta is in rare air relative to the number of payments companies that operate here, which gives us the opportunity to find, you know, great talent, a great network of of fintechs and other partners that we might want to package into our solution and and just learn from each other about the different things that are going on. And I like this particular conference because it focuses not just on payments, but it really does focus on technology and how it is that we can deploy technology to solve these different types of problems for our respective customers. So, you know, there’s just a there’s a lot of great things here. The university system is strong. The way that this industry is rallied to educate the students in the university system on the things that are going on in this space. We just it’s a great talent pool. It’s a it’s a great peer group to to be around. And it’s, you know, made up of some really compelling value propositions from these different companies.

Lee Kantor: Now, are you finding young people kind of gravitating to fintech as a career or is it something that you need more folks to to go into developers?

Michael Reed: Absolutely. You know, I think from a technology perspective, it’s a lot easier to explain what a job is if they’re, you know, if they’re a developer or someone that’s coding. You know, we’ve got the you know, we’ve got the benefit in Georgia of the FinTech academy and the fintech academy helps to educate on the broader on the broader ecosystem with payments, whether it’s, you know, product managers or or the different types of jobs that we would need in different in different companies, product owners, you know, all those, all those different types of, of of roles and how we can bring this young talent in to help us to solve these these next generation problems. So it’s a great it’s a great market for that type of for that type of work. But we do have work to do to keep educating on what this industry is and why companies may want to participate.

Lee Kantor: So any advice for young person deciding what career path to go in? How would you sell them on pursuing fintech?

Michael Reed: Well, I mean, if they’re in Georgia and they want to and they want to have a, you know, an industry that has really been in be in an industry that’s really been embraced by all aspects of the economy here. You know, fintech is definitely that that particular industry. So, you know, if they’re in university and they’re doing things, they probably already have some intellectual curiosity. There’s lots of avenues to go educate themselves on what this different stuff is and and how it works. There’s lots of conferences around like, like these. But, you know, if they’re looking for an enduring industry and a growth in a secular growth environment in a fantastic city to, you know, to live. This is this is definitely the you know, where I would be focused if I was.

Lee Kantor: Is there an opportunity to bring in some of the the fintech curriculum into lower grades rather than starting in college? Like, can we start doing a better job maybe sprinkling in some of those kind of core competencies earlier on in a young person’s life so they can kind of follow that path into this as they get older?

Michael Reed: Well, the fintech academy is already providing curriculum to all the public high schools in the state. So they are starting to see starting to see that. And obviously with the with the Hope scholarship, which is, you know, a scholarship that’s afforded to, you know, most all of the students in the state of Georgia that graduate with a certain GPA and affords them the opportunity to follow and secondary education. You know, there’s a big incentive for Georgia natives to stay in Georgia and to get their education in Georgia. So that combination, I think, is an interesting.

Lee Kantor: And then that’s good for companies like Deluxe to, you know, access that talent pool.

Michael Reed: Absolutely. You know, you’ve got if you think about even. Just the city of Atlanta. You’ve got you know, you’ve got Emory University, Georgia Tech, Georgia State, Kennesaw State. And each one of those university systems pull a different type of student. And there’s something to be you know, there’s some you know, there’s compelling attributes from each one of those different types of universities and the types of students that you may draw. You know, you may draw from a Georgia state student, you know, generally speaking, is helping to put themselves through school. So they’ve got perseverance and grit and they’re, you know, they’re doing a lot to drive to drive their personal journey forward. And, you know, you’ve got Georgia Tech where, you know, it’s heavy engineering and you’ve got that type of mindset there where you’ve got, you know, people that understand how this stuff works and, you know, are driven by that. So, you know, you know, the other that’s.

Lee Kantor: Good for companies like Deluxe. Right. Absolutely.

Michael Reed: It’s great for it’s great for businesses like Deluxe.

Lee Kantor: So if somebody wants to learn more about Deluxe and the opportunities there, what’s the website?

Michael Reed: So deluxe.com we’ve got a got a great website there and you know you can check out Deluxe and our careers page is there if you’re looking for a role and opportunities.

Lee Kantor: Well Michael, thank you so much for sharing your story today. You’re doing important work and we appreciate you. All right.

Michael Reed: Thanks so much for having me.

Lee Kantor: All right. This Lee Kantor back into for you at FinTech South 2023.