Joshua Silver With Rainforest

Intro: Broadcasting live from the Business RadioX studio in Atlanta, Georgia. It’s time for Atlanta Business Radio, brought to you by Kennesaw State University’s Executive MBA program, the accelerated degree program for working professionals looking to advance their career and enhance their leadership skills. And now, here’s your host.

Lee Kantor: Lee Kantor here, another episode of Atlanta Business Radio. And this is going to be a good one. But before we get started, it’s important to recognize our sponsor, CSU’s executive MBA program. Without them, we couldn’t be sharing these important stories. Today on Atlanta Business Radio we have Joshua Silver with Rainforest. Welcome.

Joshua Silver: Hey, thanks for having me.

Lee Kantor: Appreciate it. Well, I’m so excited to learn what you’re up to. Tell us about Rainforest How you serving, folks?

Joshua Silver: So rainforest is a payments as a service company. And what that means is that we help software companies add payment products and other financial services into their platform. And taking a step back, if we look at historically, small business owners had to get software from software companies, and they went and got banking services and other financial services from banks. And right now there’s a big trend going on where software companies are not only providing them the software, but also providing them the payment services and other financial products, and we are really the infrastructure provider for all of those services and to those software companies.

Lee Kantor: So for folks who aren’t using rainforest, are they just not offering payments or because they have to get paid in some manner?

Joshua Silver: Well, what we’ve seen historically is that most small businesses are using disjointed processes. They might be ringing up the customer, or they may be creating the invoice or the bill in a piece of software, and then they have a completely separate, disjointed payment system that they might have gotten from their bank, or they might have gotten from some other company. Really, what we’re doing is helping advance the cause of bringing these two together and creating a unified experience. The analogy I like to use is think about in the days before Uber or Lyft, you had to go through some booking process to get a taxi. You know whether that was hailing one on the street, if you lived in the city or calling one ahead of time, and then at the end you had a fumble with the payment process, whether that was cash, a few of them took credit cards. Now, with Uber and Lyft, it’s really simple. You have one application where you can book your ride, you can see all of your historical rides, and most importantly, at the end of the ride, you can just pay. And we enable lots of other software companies to offer those similar experiences to both consumers and businesses that remove that friction.

Lee Kantor: So how many SaaS companies are there?

Joshua Silver: Well, the analysts estimate that there’s over 10,000 SaaS companies in the United States alone, and the vast majority of them have some type of payments angle or payments need. Because most days, you know, most, most of the times, these days software companies have some type of financial component. And so our market is literally thousands and thousands of software companies, ranging from startups here, maybe in Atlanta, Tech Village or Atdc in the Atlanta area to grow and scaled companies that might already be processing billions of dollars of payments.

Lee Kantor: Now, can they be B2B, B2C? Does it matter?

Joshua Silver: So we service both markets. We process a lot of payments, for example, in the healthcare space. And so these are patients that are paying healthcare bills through some platform where we’re powering those payments. And we also do B2B. It could be any type of commercial field service provider. Or it could be anyone that’s doing B2B invoicing that needs to get those payments processed. So we do both B2B and B2C equally well, and we’ve invested a lot in our technology stack to be able to offer both credit card processing and bank rails like ACH natively in one platform. That’s one thing we actually do very differently than than a lot of our competitors.

Lee Kantor: So for the SaaS company, do they not have to have like another provider, like you’re just taking over that element and you’re just making it seamless for their consumer? Or do they still have to have relationships with like stripe or some of these other payment places?

Joshua Silver: So the great part about rainforests is it’s completely turnkey. The software company comes and signs up with us and does an integration into us, and we bring all the technology, all the banking relationships, all the money movement, the Reconciliation. And most critically, we also handle all of the risk compliance, fraud, all of the nitty gritty payment tasks that most software companies aren’t very familiar with because they’re typically in the business of building software, not running payments businesses. We bring and so to answer your question directly, we bring all of that to the table. They just use us. And they would fully, you know, if they had been using someone like stripe before, they would replace them. And if they’d been using a disjointed process previous to us, we would be able to help them streamline that with with just one vendor being us.

Lee Kantor: And then what happens with like issues with payment like, oh, their credit card, you know, changed or something happened and they’re, you know, that stopped billing them after a period of time that is your problem. Or you just have software that solves that problem for the customer.

Joshua Silver: So we do a lot of work to improve what’s called the authorization rates. That basically means that the percentage of transactions that get approved and go through, we do things like work with the card networks to automatically update those card numbers before they expire. We have, you know, information available at the time of the transaction for them to recollect new information, new card numbers if needed. So we it’s a fully technical solution. There’s no, you know, kind of human capital component of it, you know, calling people or trying to do collections. But we through a variety of electronic and automated means, help the software companies make sure that they get as many approvals as possible.

Lee Kantor: Now, for the SaaS company that you’re serving, is this something that’s saving them money? It’s saving them time. Like what is what what is it alleviating for the SaaS company?

Joshua Silver: So it’s actually providing them a really important new revenue stream. If you think about a software business, maybe in the mid-market, maybe they were doing $10 million a year in recurring revenue just through their their software business. By adding payments in many verticals, you can actually double the size of your business, so the amount of money that they can make from payments could take their business from 10 million a year to 20 million a year. And so it’s not saving them time or saving them costs. It’s actually generating a completely new revenue stream from them, because every time a payment gets processed, they make the software company makes a portion of that.

Lee Kantor: And then right now, they’re not making that because the payment company is making that.

Joshua Silver: Correct. Exactly. And so if you think about historically, banks and the other payment companies were the ones benefiting from those payments, and yet the customers are from the software company. And so our core belief is that if the software company is bringing the prospects and bringing the merchants to the table, they really should be the ones benefiting most from that relationship.

Lee Kantor: Now, is there a minimum amount of revenue that has to be coming through every month to make this make sense? Or is it? Pretty much everybody would benefit from using rainforest.

Joshua Silver: Rainforests primarily serves the middle market, which means that we would like customers to be platforms, to be processing at least 25 to $50 million a year in processing volume all the way up through several billion dollars. So it’s not often that we work with startups that are just taking their very first payment. There’s a lot of other companies like stripe, that have kind of done a great job with, uh, self-service onboarding and just getting going. But what we find is once you start to get some scale, your needs expand, and that’s where rainforest can come in and really help from an adoption perspective and help those platforms grow as they go from 50 million to 100 million to 3 to 500 million and beyond.

Lee Kantor: So that’s one of these situations where you might have started with one service provider, but you just outgrow it and you don’t realize it until somebody lets you know there’s a better answer out there.

Joshua Silver: Exactly. And we have received a lot of customer inbound interest because of high rates of dissatisfaction today across the payments industry. Historically, the payment processing industry has largely competed on price. It can be a very commoditized service. And with that, service has gone completely out the window. There really is no service to speak of in many of these payment companies. And quite frankly, software companies are fed up with it and ready to work with a provider that’s going to provide great service. And that’s one of the cornerstones of rainforest, is providing fantastic service to our customers.

Lee Kantor: Now, do you have any advice for other entrepreneurs that want to kind of lean into this, um, support and service as a point of differentiation? Like, what are some do’s and don’ts when it comes to, um, kind of leaning into that methodology and that way of, you know, that becomes your true north.

Joshua Silver: Well, I think it’s important for software companies to really figure out what’s what’s most important to them. And what we’ve seen is that the revenue they can derive from this the increased customer stickiness, the lower churn, better data, all of these things really contribute towards helping them have a really good positive experience.

Lee Kantor: But again, this is a situation where they started with one service provider and they probably thought it was a set it and forget it. And then they don’t have to think about it again. And then you’re coming into play and saying, hey you probably set this and forgot about it, but there’s a much better way of doing this. And we provide this kind of white glove service and support that you didn’t even know you needed or wanted until we came along. Like, is that a challenge for you to kind of communicate that, or are these people just hungry because they’re fed up with their previous provider?

Joshua Silver: No, in general, we have a lot of what we call hand-raisers people who raise their hand and say, I’m ready to make a change. I’m ready for new service. I’m fed up with the status quo. Um, they are typically not happy with the lack of transparent billing. They may be unhappy with the level of service that the, uh, payments provider is offering to their end customer, which reflects poorly on them. There oftentimes are a lot of technical integration issues. And so all of these are reasons why our clients come over to rain forest and kind of walk away from their other payments providers. They’re just really not happy. And so that’s the good news about our company. And I think why we’ve seen such tremendous growth in the last couple of years is because it’s a not only a huge market, but again, the levels of dissatisfaction are really high with the incumbents. And we come along, we’re able to provide great product and service, great commercials and economics and great customer care. And you kind of put those three things together and it’s a winning combination.

Lee Kantor: Can you share a story? Don’t name the name of the company, but maybe a company that was struggling before they connected with rainforest, and how you were able to help them improve their situation?

Joshua Silver: Absolutely. We’ve got we’ve got many of those stories. I’ll share one in particular that’s in the in the healthcare space. And so this was a platform for patient billing. And so the customers of this patient billing platform are hospitals and doctors offices and dentists and other physician groups. And they were previously working with what I’d call some of the legacy payment companies, the names you’d hear typically around Atlanta and Georgia, the Phi servers of the world, the FIS, the L’avons and Pcss, those types of companies And they just weren’t getting any service. And they had many times large hospitals that wanted to move the processing volume over to, to this software platform. But we’re having real challenges with getting the accounts approved because they have to go through certain underwriting processes and certain onboarding processes. And it was a real friction point. And even once they were able to get those merchants onboarded, even still at that point, they weren’t getting the level of reporting that they needed to be able to balance the books and reconcile payments. Enter and rainforest. We’ve completely digitized the onboarding experience. We can get those accounts live in a matter of minutes or in a matter of hours. And on top of that, we have solved all their reconciliation challenges. And so now they are able to go to their client base and say, not only is it easy to get started, the pricing is great, the service is great, but also all of the data really matches now.

Lee Kantor: So how difficult is it if I raise my hand and say, okay, Joshua, I’m in. Um, let’s switch me over. How does that onboarding and that transition take place?

Joshua Silver: We’ve done a tremendous amount of work to make the developer experience and integration really quick and easy, as compared to a lot of our competitors. We have clients who routinely sign a contract with us and go live in less than two weeks. That means they’re doing a full integration and launching a full white label payments product for their end customers in less than two business weeks. And that that we think is phenomenal and we’re very proud of that.

Lee Kantor: And then so what’s next for you all?

Joshua Silver: Well, we’ve had a tremendous amount of growth the last couple of years. We’re obviously going to continue that trend. We’ve expanded our sales and marketing and channel Teams. We are continuing down the path of some different partnerships that will help us scale distribution in a non-linear way. We’ve also done a ton of investments in the product itself, and we are very transparent about all of our product releases. And so I’d encourage everyone to check out our website at rainforest. Com. If you click on the product section you can see all the new releases we have. We’ve done things with 3D secure which helps prevent fraud. We’ve done things with Card Account Updater. We’ve done lots of other integrations with the card networks to really improve those authorization rates. And so we’re pretty excited about those recent launches.

Lee Kantor: So where is typically your point of entry. Is it through? Um, people just, you know, just looking to make some cost savings improvements or is this something that, you know, the techy people are saying, hey, check this out. There’s a better way to do what we’re doing. Like, where do you typically enter a company.

Joshua Silver: It can be one of two ways, as you mentioned. Sometimes it’s related to the technology teams saying, we really want a better solution. We need an easier integration. We need better support. On top of that, it can also be driven from the top as a strategic initiative. We see many private equity firms, for example, come and buy a software company, and one of the first three things they do in their playbook is to look at the payment strategy. They know after years of doing this, that payments has the opportunity to double the take rates for these software platforms to improve profitability and decrease churn, etc.. And so they are oftentimes coming and looking for better financial arrangements or better transparency in contracts, or even more ownership of the merchants that they brought to the table. And those are all areas where we kind of help right out of the box.

Lee Kantor: So is that an area where you’re focusing your marketing on private equity and VCs.

Joshua Silver: We do see a lot of our prospects are PE or VC backed. We also have some that have bootstrapped over many years and have built a very large book of business and are looking for a new home for it. So it kind of comes in all shapes and sizes, but we definitely have good alignment with private equity backed software platforms.

Lee Kantor: So if somebody wants to learn more, have a more substantive conversation with you or somebody on the team one more time, the website.

Joshua Silver: Yeah, definitely reach out to us. It’s rainforest pay. Com that’s rainforest pay.

Lee Kantor: Com well Joshua, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Joshua Silver: Thanks for having me. Appreciate the time.

Lee Kantor: All right. This is Lee Kantor. We’ll see you next time on Atlanta Business Radio.