PEP Episode 013 — Biller Genie – The Missing Magic in Payments with Garima Shah
- October 27, 2023
Join us on an intimate conversation with payments guru, Garima Shah, founder of BillerGenie.com. Garima’s journey in the payments industry is nothing but astounding – from peddling telecommunications to defending clients from class-action lawsuits in her own sales firm, to now, running her own successful merchant services. Not only does she share valuable insights from her enriching experiences, but also speaks candidly about her clients’ triumphs in establishing their own payment organizations. This episode is ripe with lessons from the trenches of the payment industry.
Our captivating discourse with Garima extends to her times with Payment Alliance, where she made a significant impact by opening 17 offices. It was here that she got her first taste of M&A. She also shares the importance of having a solid exit strategy and the implications of signing an ISO agreement. Furthermore, Garima provides a peek into the changing landscape of the payments industry, particularly the entry barriers. We also shed light on the importance of understanding a payments business’s enterprise value before purchasing, and the role of long-term incentive plans. Wrapping up the episode, Garima gives us a sneak-peek into her current venture, Biller Genie, and the customers they cater to with their integrated payments solution. This episode is a treasure trove for anyone interested in the labyrinthine world of payments!
Since 2008, and based in San Diego, CA, Global Legal has represented clients across the nation, and internationally, in the world of electronic payments.
ISOs, Fintech, payfacs, agents, merchants, processors, acquiring banks, and card brands, if these terms mean something to you, this podcast is for you! If these terms aren’t so familiar, this podcast is even more for you!
We hope you enjoy this episode of the Payments Experts Podcast!
Welcome to the Payments Experts Podcast, a podcast of global legal law firm ISOs, FinTech, pay fax agents, merchants, processors, acquiring banks and card brands. If these terms mean something to you, this podcast is for you. If these terms aren’t so familiar, this podcast is even more for you. We hope you enjoy this episode of pep, the Payments Experts podcast. Welcome to the Payments Experts Podcast, a podcast of global legal law firm. We’re very excited. Today’s episode, we have a special guest, Gima Shaw with biller jeanie.com. Gima, welcome.
Thanks for having me.
Alright, Gima, I think I’ve known you, I want to say like 10 years, and how I learned of you is we were giving dueling presentations at one of the conferences through what was too thin of a wall because the six people that came to my presentation, nobody could hear me because of the uproarious laughter and applause coming from your presentation across the way. And the six people that started out in mine, it went down to about three as the presentation went on and I went to the person putting it together and I was like, do not effing put me next to Garima ever again. And then he’s like, fine, I’ll put you guys together. And then yet the next one, we had 30 people at it. So I’ve always been impressed with your not only public speaking skills, but your knowledge in the industry. But what I don’t know is what got you into the payment space? What was the hook? When did you fall in love with payments?
Oh God. Fall in love with payments. Well, first of all, when you say that we met 10 years ago, first of all, I think it was way longer than that, but let’s not date ourselves. I think we should just say it’s like five years ago because that’s when I started right ago.
Yeah. Yeah, right after I graduated law school last week.
Exactly, exactly. No, I think we all fall into payments, right? You went to law school. It wasn’t like you said, I’m going to go into payments law. That sounds incredible. I think that we all just kind of fall into the idea of payments and now we call it FinTech and it sounds so sexy, but back when we all started, it was payments and merchant services and bank card, and I got into it completely by accident. I actually went to school for advertising and mass communications and really wanted to make a Super Bowl ad and decided that the compensation wasn’t high enough to be an entry level ad exec. So I took a job in sales and the thing I was selling was telecommunications, and so I was selling telecommunications B two B. My parents were so proud that I went and got a great degree from Boston University and decided to do door to door sales.
They were super, super proud. I started telecommunications and I ended up opening up a company a couple of years later, probably two years after that, my own sales firm, and my first client was actually a merchant services company. It was First Horizon Merchant Services. So completely by accident. That’s how I got into merchant services. I would hire 40, 50, 60 reps at a time and train them how to sell commission only merchant services. We were selling hyper comm, T seven pluses and thermal paper and the whole nine yards, and didn’t know anything about interchange, didn’t know anything about pricing. It was before Heartland started selling interchange pass through. We sold everybody on three tier pricing, and I’m sure that the people that we sold for made a ton of money. We sure did not see that That’ss how I got into payments. So like I said, completely by accident, your story similar.
Mine is, yeah, similar is we had one client, and they sound similar to your client, they’re not around anymore, so I’m not going to cast any shade, is they were the worst possible sales organization out there. They needed lawyers behind. We had to come in almost behind every single sale and be like, no, no. Well, you signed it, pay up. It was a leasing entity and it was Smash and Grab at the end of their Reign of Terror fueled by Global Legal, they were getting sued in two or three class actions a month, and
We were defending them the whole time and creating defensible business practices because nobody understood what was going on. We’d go into up against an attorney, and it’s some family law attorney or something, and we’d be like, well, my client’s not really even the one responsible because Visa and MasterCard, they charge interchange. Go look that up. Here’s the card brand rules. You can figure it out. These are the regulations. By the time they figured out what was going on, the case was over. We’ve won. They’re tired. But yeah, the same thing. But what got me was not that client, it was the clients that started their own organization. I’m sure you remember some of these guys where they hired all of their childhood friends, their family, they paid them quadruple what they would make anywhere else, and you’d go to their office and it was kind of like Google, but just there wasn’t the slides and there was other probably less healthy options always available.
But it was really cool to see these guys live in the American Dream and then some. And we were going, yeah, this is awesome because payments, I mean it as much as anybody. You need lawyers all the time because it’s always changing. And what I really like and admire about people like yourselves is whenever anything’s coming or it happens, you have your head on a swivel, you go figure it out. How do you go sell? I mean, you’re saying we didn’t even understand what the three-tiered pricing was, but you trained a bunch of people that probably sold the hell out of it, right?
Absolutely. I mean, it was just like, yeah, just tell that ’em it’s better than what they’ve got. And then we had to find people like you to make sure that we could defend it the right way.
So when you’re training those salespeople, was it just basic sales smile when you’re on the phone, eat
Healthy? It was face to face. It was door to door. And back then merchants didn’t know much about merchant services. We would go in and say, Hey, we’re here from First Drive Merchant Services and say, Verizon, great. Thanks for coming. Or you’re here with Visa, MasterCard. Awesome. So merchants didn’t really have an idea. It’s such a different landscape that we’re in now where it’s such a commodity. Payments is just something that you have to have every business owner knows about it. They understand what their average effective rate should be or is. And that’s really what drove me to go more to the software side where we can truly add value for a merchant’s business that’s outside of the commodity that they need, whether it be like merchant services or they need a terminal or something like that. But really being able to add value to a merchant’s business and show them how they can thrive and gain revenue. But then working with the sales organizations and the ISOs and the payment partners that we grew up with and have known our whole lives and showing them how to add software to their presentations and add software to their value so that they have a different value proposition when they’re speaking with people.
Yeah, I mean that’s a must have. But before we get there, I want to hear more about your story. I didn’t even know that you started training probably a bunch of degenerate 10 90 nines to go lease six VX twenties to a single point of sale location. What did you do after you were doing the training for Verizon?
It was my company at the time, and I ended up selling it. I was only 22 when I sold my first company and I ended up working for Payment Alliance International, and that was my first foray because they were looking for all of us. First Horizon was buying deals from Payment Alliance and Payment Alliance said, Hey, you’ve been training all of our reps. You owned a company that did a bunch of sales for us. Why don’t you come do this in-house? So myself and a couple others, we went to Payment Alliance and opened their entire direct Salesforce. We opened 17 offices for them all over the us. That’s probably when I met you somewhere around then. We opened a bunch of offices for them. It was a W two Salesforce trying to really professionalize the sales organization around how to sell merchant services the right way.
That was my first real understanding of how does this industry work? Why does it work? How is money made? What are the different players? What’s an issuer? What’s an acquirer? What do the card brands do? And that was really where I started understanding that. And then from there, I went to Century and Direct Connect, and usually I was on the indirect side, but then got really into m and a. So the way I met my partner at Genie was actually when I was at Direct Connect the 12 years ago, I bought his company. So I was doing a lot of m and a work, and I love the m and a side because that’s when you can really see what software makes sense, what portfolio, how does it work, where do you add value, what’s attrition? I mean, it’s such a different world and it’s something that I really enjoy talking to even ISOs and agents about now is that what are you doing this for? What is your value? What’s your exit? Have you thought about your exit? What happens if all your merchants leave? What happens if tomorrow something changes? How do you really prepare for that? So I think m and a was a really cool way to get into that.
That is interesting. What’s interesting to me is you take me back in the day, the m and a was let’s go try and get 36 x and that’s all you’re buying. You’re buying the residuals, all the retail guys selling, and we still do a lot of that work. And there’s nothing wrong with it, building up a portfolio and cashing out for a quick million bucks and then just doing it all over again. But when you said, what got you interested in it back then because not the most interesting to me,
I think m and a is super interesting, but it wasn’t just the portfolios because as you said, you can buy a portfolio even today, and it’s such a strange idea that you can go out and sell 50, 20, a hundred, 3000 merchants and then go around and flip them. And we have these numbers that we put for lifetime value and what’s the IRR that we want? And you just kind of run a formula. It’s just a spreadsheet and can figure out pretty quickly whether or not it’s a good deal or a bad deal, but everything around it, how do you really build that enterprise value? Is there enterprise value in the organization? Is there a sales engine? Is there technology? Is there operations? What do I get as the buyer? And we always used to say, the synergies always go to the buyer. And so as the buyer, what do we get with this?
And how much more is this worth to us and what’s the arbitrage rate? And so I think that’s where I got really, really, really excited about m and a is seeing those kinds of things and looking for the long plays. What will this look like in three years or five years, not just the portfolio that’s going to treat. And the only difference is you have a bigger wallet, so you’ll allow the attrition for longer, and maybe it’s worth more because you have a bigger book, but really what is that going to look like in three years or five years or 10 years? And how do you gain overall enterprise value by doing some of these deals? And we keep seeing that. I mean, we’ve seen it with what happened with F I s Worldpay and now what’s happening. It’s a consistent thing in our industry in most industries. I think our industry is unique just because there’s so little regulation around what we do and how we do it. So people are making it up as they go along and then it’s like, oh wait, you shouldn’t have done that. So I think that’s interesting.
Right. Well, I’m curious, when you are talking to smaller or mid-size shop, when you run into people, do they have an exit plan? Because I’ll tell you from my experience is generally no or it’s like, yes, I haven’t thought about it because my first question to somebody when they come to me just with an ISO contract, they’re going, they want to go wholesale. They want to be an F S P or whatever. My first question is, look, I can crank out basic red lines, but what’s your exit plan? What are we really doing here? What’s going on now? And why are you even doing this? I want to make more money. Okay, why? And I get a lot of, go back to your cubicle nerd and give me the red lines. Stay in your lane.
No, I agree. I think a lot of people don’t think about it. And it’s so important in that contract negotiation because for some people, assignability or portability might be important for some that makes no difference, and the lowest price is more important. They know what that exit is. And I think not thinking about that when you’re signing that initial ISO agreement is such a issue and it causes so many downstream problems at the beginning. So I don’t think people think about it because I think that the problem, and I think this is changing, but I think the problem historically been in our industry is that there is no barrier to entry. You don’t have to be an M B A to start an iso. You don’t have to even know the basics of how the banking and financial system work to be an iso, which is amazing, right?
To your point, it’s what makes this great American dream. And people can open these Google-like offices, especially back in the day with just selling merchant services. But if you don’t actually know how to run a business, and I’ve never been taught how to run a business, it’s just a tragic downfall. And you see it all the time with so many ices that grow, so many payment providers that grow and become so big and do so many great things, you’re like, wow, they’re going to kill it, man. They’ve spent all their money. And again, it’s not just our industry. I mean, look at the fall of the startups. I mean, look at the fall, and the CEOs who’ve gone down in a blaze of glory right after they hit unicorn status because they didn’t know how to not spend a drunk sailor. So in the software and tech side, we see it all the time too, to the point where sometimes Tom and I are called old founders, and we’re not sure if that’s a good thing or a bad thing. On the good side, it’s like, oh, you’re old enough to know how to do math and have done your master’s and those kinds of things, but we’re not sure if you’re young enough to be cool. So we’re still trying to figure that out.
Right? Yeah. Well, it’s interesting how age plays out in different industries. I mean, I thought where you’re going to go with that is like, no, we’ve made it All of the guys that I’m talking about, most of them are gone, or they’ve gone through drastic transformations. They’ve done one horrible deal that wiped everything out. Everybody that did those loan to own agreements, I’m sure you saw ’em all the time, and they all got wiped out and messed up. I mean, one bad player in the industry took out hundreds of these guys. But anybody that’s around still doing it, we’ve seen the level of sophistication. Like you said, a lot of those sales organizations, they didn’t even finish college, but now they are experts in payments. So yeah, I mean anybody that’s still around, they’ve got staying power. Even the guys that sold and got messed up, they have something.
And I’m curious, what is it? So what I was going is like somebody who has an exit plan if when you’re going to buy the company and you’re like, what’s your exit plan? And they’re like, I don’t know you. And you’re like, perfect, you’re me. I’m just going to take that note. But I mean, what are you looking for when you guys are doing m and a outside of the software on the person side, I guess, are you looking for those young tech gumption guys? Are you looking for the old grizzled still have scars from running their knuckle busters?
I think it, it’s both. I think it’s more about the personality, and I think it does come down to intelligence. I think it does come down to, because look, you can get the raw meat deal and you can pick up a deal for just about nothing because someone doesn’t know better. But again, what’s the enterprise value? If the person sold it to you and they sold a bunch of times, they mess it up a few times, there’s nothing really stopping that other than a piece of paper that you’re going to craft so wonderfully. There’s nothing really stopping them from opening an ISO in their sister’s name and flipping the book. I mean, which happens. And so I think it’s that you’re looking for someone who actually understands and does have a plan and what are they trying to be in three to five years? And again, I’m not an m and a now, but in the m and a side, it was very much putting deals together that had future value.
That was interesting for both sides. I am not and have never been very big on buying and trading portfolios. I think that that is difficult. It’s a difficult plan. Again, nothing stops someone from opening ISO in their sister’s name and getting full database of information and moving it over. But the people who are like, look, I’ve got these plans and I need an investment, or I want to take some of my chips off the table now because I’m going to invest this into that and this is how I’m going to three x my money and what I’m doing, and this is how we’re going to work together to do that. So I love deals and have L T I components to them. I think that they are just better deals. And frankly, myself and my partner wouldn’t be partners without that. Because the way that we had structured his deal 12 years ago was it was a 60% buy with a long, it was a six year l t i with investment for marketing and all kinds of things. And that’s how we became so close because we worked together on how do we build this book to be as big as it can for both of us to have it be amazing in six years. And so I think that’s what it comes down to.
And it was, so tell me what you have going on now.
So we opened Biller Genie three years ago because we always talked to merchants, especially when we were selling merchant services in every channel that said, do you work with QuickBooks? And I’d be like, yeah, sure. Just put the terminal on your desk and key in the transaction and then key in the quick QuickBooks. See, we work with QuickBooks,
The original A P I,
Right? Right. And that dual entry, that swivel chairing, all of that just doesn’t work. Merchants are not looking for this disjointed experience, especially in the world we’re in today with Amazon and Uber and Etsy and everything else you can think of. Merchants want things to be that easy as well. And surprisingly, what I found is that accounts receivable isn’t easy. Invoicing is not easy. People don’t pay you on time. 90% of the world, 90% of the world does not automate their accounts receivable, which to me, that was the most shocking thing that I’d ever heard. And that’s what we are doing. So we automate accounts receivable for small and mid-size businesses who are using QuickBooks or Zero, but we do it through a partner channel. And our partners are the ISOs, the agents, the Fiserv, the Global, the GoDaddy. That’s who we work with, and they are sales reps are looking for ways to acquire customers and add value, increase their margin.
So they’re not talking about saving someone 2 cents a transaction. And at the end of the day, more than anything, just increase retention. I mean, attrition rates are so high on these books that how do you increase retention? Well, if you give them an integrated solution and you make it easy for the merchant to work with you and add value to their business, our average merchant in the us, it takes 57 days to get a bill paid. Look, you’re a lawyer. You probably have sent out bills to your clients. I dunno how long it takes you to get paid, but
Average, of course, of course, instant. But on average in the US it’s 57 days on the billers. You need platform. It’s eight days. So when you can add that kind of value for a business owner, they don’t care about the 10 cents that you’re charging ’em a transaction. They care about the fact that they made many 49 days faster and the time value of that money, the interest rates, everything else that goes along with that. I mean, we’ve seen what happened with messed up interest rates with Silicon Valley, right? So cash is king no matter what. Cash in your bank will always be king. And so really trying to help business owners and ISOs and payments partners understand that and understand and value in how to run a business.
We lost your audio for a second, but it sounds like it’s bad.
Oh, I don’t know what part, but all good.
I think we’re okay. So do you have a direct sales force to merchants? Are you just hitting the resellers?
We, 99 or 95% I would say of our business comes from resellers, payments resellers. We do have some people who randomly go to our site and they Google us, and they might sign up there or they come through the QuickBooks marketplace. But really almost all of our business comes from partners.
Great. Where what’s your ideal client, aside from tsys? Who are you guys targeting?
Partners. Our ideal partners.
Yeah, your best resellers.
Yeah. Our best resellers are those that are selling in the B two B or C N P basis, the ones who understand receivables management or cashflow management in some way. So we work with mostly card, not present, B two B type customers, construction, landscaping, field services, professional services. That’s who we work with. And we work with a little bit of a larger client. We’re working with people. Most merchants of ours do at least $50,000 a month and transactions, and we help with everything from a c h to MasterCard track, just any form of payment, making it easy for you get a bill. How much do you buy on Amazon? I buy things on Amazon every 30 seconds. I’ll be like, oh, I have an idea. All of a sudden it’s in my card on Amazon and I don’t know it. It happens. But sometimes the Amazon ferry comes out same day and I get exactly what they want.
That’s the thing for a business. How do you make it that easy for people to pay you? I mean, I get a bill from the doctor’s office. I have no idea what it’s for, which family member. I don’t know when they went, I don’t know if they’re right. I don’t if my insurance, I have no idea. And then they’re asking me to find a check and pay them. Like, dude, that’s going to take six months. Not because I don’t want to pay you, but you’re making this way too hard. But if I get a bill and I can look at my phone and click, double click, and all of a sudden it’s paid, that’s easier. So that’s really all we do is we bring that type of experience to businesses to make it so easy for them to get paid.
Yeah, no, I love the example of the doctor’s office because it’s just horrible. And I wanted to look at Jeremy and tell him that it’s Obama’s fault, but just like everything, that’s another episode. That’s a different episode. But no, I love it. So what gets in the way? What’s your overcoming objection? That you have to train your resellers. Why would somebody not want this?
That’s actually not, so I’m going to say that differently. It’s not a problem to overcome the objections for the merchant because merchants know what they need and how they need it. It’s explaining to a reseller why there’s value, because for a reseller, many resellers have never thought about invoicing, have never thought about. I mean, I look at myself. I started in payments when I was 19, fresh out of college, I didn’t know anything. I thought I was amazing. I was like, I graduated college so early, I’m so cool. I’m going to go do all these things. And I was, what, three years? It was only three years ago that I started understanding the impact of revenue cycle management and cash on hand and accounts receivable because I’d always been paid through residuals and commissions and large checks for m and a and those kinds of things. So I don’t think that it’s something that’s accessible for payment partners. I don’t think that they see the pain that other businesses have in cashflow management. I think that they’re so used to getting paid once a month that it just happens and this is how they get paid and this is what they get paid for versus okay, an entire, like a catering company’s entire livelihood rests on the fact that this person is going to pay their bill for all the lobsters that they bought for the wedding.
That’s a real problem that I think that our biggest objection or our biggest hurdle is trying to train payment providers on why this is important for their merchants.
Yeah, no, that makes total sense. I mean, having to have whatever the amount is sit in your bank account just to make sure you’re covering payroll would be a lot nice to not worry about that because like the merchants, when it’s like you probably remember back in the day, no, you actually have to batch out, but kind of the same thing. So where do you see this going for your company? Are you guys worried about anything coming down the pipeline? Is the dual pricing going to rattle the cage? I mean,
No. I mean, we have compliance surcharging and dual pricing on 17 different gateways, so we’re not really worried about that. We are a full dev shop, so we do a lot of our own software, so we’re not really worried about anything there. Our goal is we’re going to be a unicorn. We said this on Kathy Island a few years ago, but our goal is in five years we’ll be a unicorn and we’ll disrupt this space because it’s ripe. I mean, there’s, like I said, 90% of businesses don’t do this. This isn’t about trying to steal a guy who does merchant services over there and move him over here. This is, you don’t currently automate your accounts receivable. You should. It’s going to cost you 25 bucks. Great, do this. Great,
Do it. And it should be connected to all of your payments because it just makes sense.
Right, exactly. So for us, it’s just we are going through a lot of the challenges that I’m sure that you have, and as you’ve grown such a large business now, it’s the growing pains of growing a business, having the right team, and what do we do and what are the right inputs, and how do you not focus on shiny objects? Those are the things that we’re dealing with now that is more around scaling a business. We had five people three years ago. We’re 36 now. It doesn’t sound like a lot.
That’s a lot.
It’s a lot of people and it’s a lot of different departments, and it’s a lot of different inputs and communication styles, and so I think it’s more around that. That’s where we have to get really good and buttoned ourselves up.
How did you graduate college at 19? You just took all your classes at once?
No, I went to school in Boston. I went to bu. I graduated high school a little early too, and I had done a lot of, I went in with a lot of credit, and so I graduated with two majors and a minor at 19.
You missed all the fun. You didn’t.
I’ve always been in a rush. I know. I talk so slow, so it’s hard to tell in a massive rush. Plus, I’m a Florida girl and Boston’s really freaking cold. It’s really cold. I don’t do cold very well, and after a winter or two, I was like, how fast can I get out of this place? I am freezing.
Yes. Yep. I know the feeling. I grew up in Vermont and we go back and visit occasionally, not that often. Now, living in San Diego where the
Weather’s perfect all the time.
All the time. Actually rained a little this weekend, so we’re all coming out of our depression.
It rained for 10 minutes. That’s true.
Well, this has been great. Thank you for coming. How can people get in touch with you or one of your 36 employees and hear more about this? Because I agree. I mean so many businesses, ours included would be really benefit from this.
Yeah, I would say the best way is just email us at email@example.com or visit firstname.lastname@example.org. Either way, there is a ton of material. There are webinars, there are demos, there’s ways to schedule time with us. There is a certification course. There’s all kinds of stuff. So definitely shoot us a quick email at email@example.com or just visit firstname.lastname@example.org. And
You still go to all the conferences? W S A A.
Yeah. Our team will be at Ws a A, myself and Tom will be at Money 2020. So if anybody goes to either of those, let us know. We’d love to see you
Hunt you down. You’ll hear if you’re giving a presentation, you’ll hear the cheers from far away. You can just go that direction. Alright, well thank you so much, Karima. It was good to catch up.
You as well.
Karima, I got to ask you really quick that post-it note board behind you, is that a Kanban board system? Yes. Nice. We run our whole firm on Trello, basically, which is a Kanban board system digitized.
I use Trello, I use Salesforce, I use Kanbans in every single thing that I do, but nothing can replace my post-it note, Kanban and the Color, something.
Excellent. Love it. Thank you so much. You were a wonderful guest. Thank you for coming and joining us today on the Payments Experts podcast. You’ve been here with James Huber, managing partner of Global Legal Law Firm and Garima Shaw. Go find her @ billergenie.com. This has been a podcast of Global legal law firm. Thank you for listening to the end. Thank you for listening to this episode of The Payments Experts podcast. New episodes first and third Thursdays. If you’re interested in learning more about PEP and how Global Legal Law Firm may be able to assist you, please visit us at global legal law firm.com. To schedule a free consultation, give us a call at (888) 846-8901 or email email@example.com. And once again, thank you for listening.
Is that a bottle of GI right next to you?
Justin is drinking beer in the morning. Now it’s just a bottled water. Oh, well, it’s an afternoon there, so yeah.
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