PEP Episode 054 — The Honest Broker: Why Transparency in Payments Actually Pays Off with Aacadia Payments

Introduction

Transcript

Riley Bangerter (00:00):

Chat GPT is insane

Jeremy Stock (00:01):

Yeah, it is. It’s wild. I don’t know, Chris, I dunno if you know this or not. Our RingCentral, our phone system, it just started this thing where on the call, at any point you want to click this AI button, it gives you a summary of the entire call and it’s incredibly, it even gives you action items at the end, kind of like, here’s what you said you would do or what you need to accomplish now after this call.

Christopher Dryden (00:27):

It’s

Jeremy Stock (00:27):

Wild.

Christopher Dryden (00:28):

Yeah. We need that for every video call.

Jeremy Stock (00:31):

Yeah, right, right. No doubt. Welcome to the Payments Experts podcast, a podcast of global legal law firm. We hope you enjoy this episode. Welcome to the Payments Experts podcast, a podcast of global legal law firm. We’re very excited today. We have in studio joining us, the founding and managing partner of global legal law firm, Christopher Dryden, as well as our special guest joining us remotely. We’ve got Riley Banger of Acadia Payments. You can find Riley over@acadiapayments.net. Riley, we’re really excited to have you on the podcast today. Looking forward to this conversation.

Riley Bangerter (01:17):

Thank you and me as well. I’m super excited. Thank you guys.

Christopher Dryden (01:20):

Yeah, great to have you on Riley. Known Riley for a couple of years. Part-time client doesn’t need us for too many things, but we always try to make friends with the people that we work with. And I can say this, I recently had interaction. They had a merchant that had a real issue internally that one of their employees had kind of done some bad acts and Riley immediately reached out to us, which was really cool. And we tried to get in touch just to give that merchant just some guidance on how to handle it, not even from the purposes of signing them for anything, just of like, Hey, here’s what you should be doing. If this happened at our business, this is what we would be doing. So it’s kind of cool. I think the purpose of me saying this about Riley and Acadia is that as a payment processor, your merchant reached out to you for something totally unrelated to payment processing. I thought that was cool.

Riley Bangerter (02:23):

Well, and what’s funny, we try and facilitate that relationship with all of our merchants just to keep it sticky for us, but you guys crushed it in that recommendation. And how many times do you see people not take the recommendations and do the stupidest thing ever? I mean, what they did was dumb,

Christopher Dryden (02:39):

To be honest. I didn’t really understand the lack of response, but that’s okay if you got to put your hand on the stove to realize it’s hot. Okay, no worries. Learn the hard way. So like I said, we’ve been working with Riley and Acadia for a couple years and really good guys, he and his partner. And one of the things that we like to do is kind of say, how did you get into payments, man? What kind of got you into this world?

Riley Bangerter (03:07):

It’s funny. So I’ve been in finance my whole life. I got into the securities industry when I was 21, became a stockbroker and then was in that industry. And then I started into mortgages around 2005 because we were selling a product that was specific that helped us sell more securities products and more insurance products. And so we built up this mortgage business and it ended up being one of the biggest mortgage companies in the country at the time, and we were in the process of being bought out by Washington Mutual. And then 2008 happened and the whole thing melted apart. And so I got into payments because I wanted a residual income, and I went, what is the most, the mortgage industry that’s not a big popup front that will create the stability in a long-term for lifetime? And so I saw the payments industry and I went, that makes sense. It’s essentially the same thing as a mortgage. It’s just a credit application. And so it’s very similar and it was easy to get into.

Christopher Dryden (04:00):

It’s funny you say that because so many people don’t realize that the merchant processing application is a credit application. It’s a hundred percent. Yeah, totally. And it’s very interesting to me because as you know, being in securities and then being in the mortgage business, you can’t lie on a credit app. And if you do, it’s really problematic for you. It’s one of those things that I think people don’t realize that payment processing is actually financial services. Hundred percent. Yeah. There’s still a fair sometimes,

Riley Bangerter (04:31):

Well, it blows my mind that there’s no license needed. I got into this industry coming from the securities industry and passing a seven and then getting my mortgage loan originator license in the mortgage industry and then going into this, it was like, oh, I just want to sell payments. I can sell it. I don’t have to get a license.

Christopher Dryden (04:46):

Well, and it’s problematic too, right? I mean, we’ve talked about this and if we want to maybe talk about it later on, I get your feedback on it. But there’s agents out there that just hop and hop and hop and take an upfront bonus or even sell the residual and then just recapture it. And until the, I would say larger sized ISOs decide that they want to do something about that and create some sort of good standards list or a blacklist for agents or something along those lines, it’s going to perpetuate itself for a long time.

Riley Bangerter (05:24):

I heard that there was one of those, it was the MAC list or something like that. Somebody had told me about it.

Christopher Dryden (05:29):

You can report people to the, it’s actually called APP now. They changed their name. It’s the Association of Payment Professionals. And for those of you that don’t know, for all of us whores over here on the sales side, there is an actual underwriting and risk side to this industry, which is a little bit more conservative, and they have their own, how we have the regional groups, WASA and SEAA, and we have National E-T-A-A-P-P actually focuses on the other side of the industry, which is underwriting and risk. There is stuff out there, but the problem is that those underwriting and risk people, they’re primarily working with merchants. I don’t know how much interaction they have underwriting agents. So I know that there’s kind of a breadcrumb trail over there where people talk, but I’m not sure how much that really changes things. Yeah, because dude, I mean we chase down crazy people do stuff. Oh, me too, man. We chased down agents. I will actually say this. So we had a litigation case where one of these agents took one of our clients for a significant amount of money, and this guy actually consented to a judgment for a significant amount of money. And he had basically said that he had committed identity theft by taking the documents that he had received from merchants and just reused them for every single processing relationship, and basically created his own email address to do the DocuSign so that they could verify the email on the merchant app. This is the interesting part about it being a credit app. And

Riley Bangerter (07:09):

We

Christopher Dryden (07:10):

Had all of this evidence and he had basically admitted and consented to a judgment and we sent it to the FBI and it’s been like a year and a half, two years, and I’m not sure if they will do anything, which is crazy.

Riley Bangerter (07:24):

Wow. Yeah, I’ve heard that. That’s wire fraud. At least it’s got to be something like that.

Christopher Dryden (07:29):

Oh, well, actually, I think identity theft is one of the enumerated RICO predicate. Yeah. I mean, you should be able to get people on that because they’re taking driver’s license numbers, social security tax id, all of the proprietary information a merchant provides to open a merchant account, and they’re just taking that and using that and then, oh yeah, we needed to get you new equipment and they just send down a new terminal. Yeah, it’s

Riley Bangerter (07:56):

Blatant, right? I had a guy send me an app one time that was completely fake, and I didn’t know it at the time, but we got boarded up with him with one of our ISOs, and I started seeing some just weird behavior on this lady’s part. He had gotten a straw signer. So I’m talking to this lady and she has no clue what’s going on that she ever even applied, and I’m going, something’s up here. And they ended up, I guess it was a dark web card spinning room that was trying to spin cards on this account that this lady had, that she didn’t know she had. And it turned into a $30,000 loss for our ISO because we caught it in time. It could have been much bigger, but it was very strange and very eyeopening as to the level of fraud that people, or the level of work that people will go through to create these fraudulent accounts.

Christopher Dryden (08:40):

Well, it’s interesting. I think that this is actually an important topic because there are different people that play in this industry and yourself, even the way that you just described that last scenario, you are looking at keeping fraudsters because this is a long-term gig for you, and it’s not just some fly-by-night thing. And so I think that that’s really important. The people that are invested in the industry, everybody wants volume, but volume that you’re just going to have to discourse later. Yeah, totally. It doesn’t make a lot of sense.

Riley Bangerter (09:11):

Yeah, no. So tell I give up some residuals on that.

Christopher Dryden (09:15):

Oh, I’m sure. I’m sure everybody does. It’s a short-term goal. I mean a short-term win. Right? It doesn’t make sense. So tell me about acaia of payments. When did you guys start?

Riley Bangerter (09:24):

So we started, I think I officially started it about six years ago. And I had gotten a job for somebody else in the industry, and I was the director of business development, and I don’t want to say the company, but we had issues there. I was doing a lot of work and it became an issue. And so the pay and all the things, it was just a bad thing. And so I just took off and I went, I can do this myself. I built a huge mortgage company. I built a securities company, like a securities firm, so I know I can do this myself. I’m out. And so I left and got some investors that came on about two, actually three years ago. I brought in Daryl Peppers, my partner. He worked with me at the last company that I was at that I had taken the job at. And then, so I convinced him to come over and I haven’t looked back. We were a good partnership.

Riley Bangerter (10:16):

I’m a visionary, and so I’m a creative type, so I’m off the wall a little bit and stuff. And so Darryl kind of grounds me on some of that stuff. And then he’s a little more timid where I’m just like, let’s go for it, fire, ready, aim. And so that helped him a lot in some things. And so we just play off each other well, and we haven’t looked back. We’ve got a handful of agents that give us deals each month, and then we find deals ourselves organically. And a lot of our merchants give us referral business, and that’s how we’ve built up to where we are today.

Christopher Dryden (10:47):

What are you guys focusing on?

Riley Bangerter (10:48):

So coaching is our biggest vertical and probably our best vertical.

Christopher Dryden (10:52):

That’s a tough placement.

Riley Bangerter (10:54):

It is a hard placement, especially when they have it’s tough

Christopher Dryden (10:55):

Placement.

Riley Bangerter (10:57):

Yeah, totally. So we’ve got a few good partners that we lean on for stuff like that. And then we have a big social media platform that is our biggest merchant, and they actually came from the Apple Play Store. They’d gotten shut down by PayPal, had some issues with Apple, as many developers have had issues with Apple. And then they came to us and I said, yeah, we can probably get this done. And it was a nightmare getting it going, but we had a lot of fraud issues at the beginning where it’s basically a messaging app where people can buy a digital currency inside of the app and then gift that digital currency to an influencer and that influencer can cash it out for fiat currency. And so it was ripe for money laundering and all this stuff was going bad. And so we implemented a couple controls and they haven’t had a chargeback in months, and it’s been, they’re stoked. They love us, we’ve saved them.

Christopher Dryden (11:45):

So is that a marketing budget for influencers that they’re able to get them to? It’s a weird thing. I’m not a social media guy, but I mean, I can follow the dots to see what’s

Riley Bangerter (11:56):

Going on. What’s funny is the way that they mitigate the fraud or the money laundering is it’s less than a one for one exchange. So if you buy a dollar, it’s worth way less than a dollar inside the app. So people aren’t just going to throw a hundred thousand on their credit card and then take out a hundred thousand when they give it to their friend. So that discourages people. And then we’ve got a couple other things, but the interesting thing on this one is the guy that spends the most money, so one person spent $540,000 in one month out of his B of A account in this app, and none of us know what he’s spending it on, who they know, who he’s gifting it to, but they don’t know why. It’s the funniest thing. It’s like, wow, what are you spending $540,000 on inside of a social media app? What benefit is that?

Christopher Dryden (12:42):

Yeah, it could have many benefits. I don’t know if this is the show for that. So outside of that, so you’re growing organically and through an agent base, but how do you guys find opportunity or where do you see opportunity these days in the industry that’s recognizable, being a visionary?

Riley Bangerter (13:07):

Well, let’s all stop the race to zero. Let’s start with that and let’s do some dual pricing the correct way so that we can all play on the same field. What I don’t like is when people go out there and they just do it however they want and not listening to the Visa guidelines and all that stuff. And it just ends up becoming a big problem for the rest of us in the industry. So I think to kind of take it back to the licensing, I think licensing actually would be a good thing in this industry just to have a standard that we all have to adhere to and play by the same. Yeah,

Christopher Dryden (13:38):

I’ll tell you man, visas getting draconian because, because we’re a hub for information. As people see our podcast and they see what we focus and talk about, I get a lot of people that send me information that I probably wouldn’t have access to otherwise

Riley Bangerter (13:54):

That

Christopher Dryden (13:55):

Visa is distributing out to some larger service providers, but they’ve got a dual track on how they fine, and there’s the cardholder fine, and then there’s the secret shopper fine, and the cardholder fine. Actually, the cardholder notifying of violations, which I think is kind of crazy. It’s not a one to five. I mean, first it’s a thousand dollars on the first violation for each one,

Riley Bangerter (14:24):

But

Christopher Dryden (14:24):

The second violation, it’s 5,000 or 25,000. If it’s the cardholder, they bang you again. And a lot of these merchants that are either high volume, small margin or just mom and pop places,

Christopher Dryden (14:37):

They can’t handle all this and they don’t get any sort of knowledge. We had a client that has a POS company, and this guy’s kind of a mover and shaker. He’s got a lot of ambition. And he sent us the spreadsheet and he was like, look, I had a bunch of merchants that got violations, and they sent me all those data and I thought that they were all compliant. We started looking at the pictures. I mean, it’s like series of pictures, the Visa secret shoppers, they do a lot. Really? Oh yeah, no, no, no. For every instance, there were six to seven pictures of what it looked like at product placement, what it looked at the counter, a purchase for the product that didn’t have the correct dual pricing

Christopher Dryden (15:27):

In cash, a receipt for credit. And what you said is really interesting. There’s these tools that are intended to be game changers and benefits for merchants, but when the merchants aren’t knowledgeable, because I’ll tell you what, we are constantly amazed by this, but the surcharge rules, and maybe because I read them and the cash discount rules, because I read not just the rules from the card brands, but the legislation from various states on the subject matter. It’s very clear to me, but a lot of people get confused by this stuff. I don’t know if you experienced that, but they’re really confused. Yeah. I mean, what do you see out in the marketplace where people are like totally have a misperception.

Riley Bangerter (16:15):

They’ve either been lied to by an agent, somebody out there trying to sell it, trying to get the deal, or they just don’t care enough to actually educate themselves about it, is what I’ve found for the most part. And so the people that you are running a business, the most important part of a business is how are you going to take payments, whether you want to admit that or not, that’s the truth. And if you can’t get paid, why are you in business? And so I think a lot of it is falling on the merchants shoulders of they’re just not educating themselves or they’re getting bad information from a bad player in our industry.

Christopher Dryden (16:46):

Well, it’s interesting to me because I said for a long time, the card brands, especially with the chargeback regime, conflicts of interest. Oh,

Christopher Dryden (16:58):

And that process creates revenue for everyone. I mean, a chargeback, there’s a charge, there’s a retrieval request fee, there’s a chargeback fee. I mean, all of these things have a spread built in, and then there’s the mediation process, and you pay the card brand to go through the mediation process, and all of it has a financial component. And now I’m starting to see kind of the same thing in the surcharge violation world, because it could easily be, I mean, I understand that they want people to be operating. This goes back to the licensing thing. I think that’s really interesting what you said about licensing.

Riley Bangerter (17:38):

I think it’s important for any financial services business, we’re dealing with people’s livelihood really, if you look at it that way. And if we do something wrong and then they start getting fined by Visa, the that’s a huge, that’s not why I’m in this business. I’m in this business to help people. I saw that the payments industry was broken in 2008, and that’s why I got into this. That’s kind of the follow up to why I got into this. It’s because I needed to get into it. I do good business, I do transparent business, and because I came from the securities industry, I’ve really educated people about the products that they were buying and then let them make an informed decision. And that’s what I do in the payments industry as well. We can go anywhere you want to go. Let’s determine why you want to go that way.

Christopher Dryden (18:18):

No, and I agree. I didn’t really think about, and I agree with you on the licensing part. ETA had the Certified Payments Professional program for a long time, which I thought was a good idea. And then actually it was a great idea. They came out with standards of best practices or self guidelines. And it’s changed over time because regulation has changed over time associated with the payment space. But it’s interesting to me because now all the violations could be a profit center, an unintended profit center through enforcement.

Riley Bangerter (18:57):

Well, we play it with the chargeback game, so we deal with a lot of higher risk verticals. And so we like to find those merchants that get chargebacks, not enough to blow ’em up, but enough to where we can have an income source off of it. There is a spread, and we sell the mitigation of it. And so it’s a balancing act in the high risk game of we want somebody that does get chargebacks because it’s good for us, but not enough to actually shut ’em down.

Christopher Dryden (19:21):

But the surcharge thing, the violations, I mean, I know a thousand dollars is the initial fund.

Riley Bangerter (19:28):

No,

Christopher Dryden (19:29):

That’s all the card brands. And I find that the penalties don’t generally match the infraction. You’ve got somebody who was overcharged 65 cents and now I owe a thousand dollars.

Riley Bangerter (19:41):

And

Christopher Dryden (19:41):

I understand they want to curb bad business practices associated with card payment, but those two things don’t. All the money, those two things don’t reconcile, right? I mean, that’s the kind of scary thing.

Riley Bangerter (19:55):

Yeah. You got the governing body that’s making the rules and then taking the money when you don’t follow the rules.

Christopher Dryden (20:00):

And it’s literally, I saw the receipts, the overcharge was 65 cents on one of ’em. They’re paying a thousand bucks and it’s a thousand bucks for the fine. And like you said, what other game in town, right? I mean, how are you going to be in business if you can’t accept electronic payment?

Riley Bangerter (20:17):

Yeah, no doubt.

Christopher Dryden (20:18):

So you guys recently partnered with legits Script, right? We did,

Riley Bangerter (20:22):

Yeah.

Christopher Dryden (20:23):

Yeah. How’s that going? And tell us why you did that

Riley Bangerter (20:25):

Really good. So we had a merchant of ours, a big telehealth merchant of ours that was trying to get certified, and it was just a nightmare for him. It takes like six to eight months right now to get Legits Script certified if you’re just coming in off the street. And so I researched it and talked to some people at Legit Script, and there’s a streamlined process that they allow for some of their enterprise size partners. And so we became an enterprise sized partner with them, and we are now able to get people boarded up in two days, and it costs the same amount or less than if you were just to come in off the street. And so we can save merchants money, help ’em get it done faster, and everybody’s happy. I mean, we’re happy. We pick up a merchant, the merchant’s happy. They get through this process that normally takes eight months to do, and they do it in two days and they’re up and running.

Christopher Dryden (21:12):

Explain for our listeners who Legits script is.

Riley Bangerter (21:15):

So Legits Script is a company that monitors websites for telehealth firearms and a handful of different high risk vertical industries so that they know that the product that is being sold on the website is actually the product being delivered to the customer. And so they do some due diligence and they do monitoring on the backend to make sure that if you’re selling firearms is a weird one. We have some big firearms among merchants as well. So there’s parts that look like dishwasher parts, but they can be used to create a firearm. And so some people will sell these as dishwasher parts on their website, but they’re really selling this so that people can make firearms. And so logistic monitors that knows how the industry is and knows that these are not dryer parts, there are parts that make firearms. And so they can go, Hey, this is not, something’s not right here. Let’s look into this more. And then that allows us to eliminate fraud and help merchants that want to do real business in either dryer parts or firearms do real business.

Christopher Dryden (22:11):

Yeah,

Riley Bangerter (22:11):

That’s awesome. Make it seem something else.

Christopher Dryden (22:15):

Yeah, that’s awesome. And most people don’t know this. There are other web crawler systems out there.

Riley Bangerter (22:23):

I’m sure Visa and MasterCard have both

Christopher Dryden (22:25):

Really, but they’re wholly owned. G Two’s wholly owned by MasterCard, and I think that they use it. I mean, I understand the purposes of using it. I’ve said this before, I don’t know if you see this, but a few years ago it was during COVID, we had a client that had, it was like an alternative payment where they were a metals company, and they would allow you to purchase physical gold that was actually backed by physical gold in a repository somewhere, wherever they were depositing it. And then they had where the merchants could take that and then create some sort of alternative payment method where the gold would be purchased and then almost immediately liquidated. Was this for the cannabis business?

Riley Bangerter (23:21):

Say it again. Was this for the cannabis

Christopher Dryden (23:23):

Business? It was for a bunch of different things, but the people that were engaged in it were actually from the metals business, and they had, I don’t know who had approached them, but the crazy thing, the purpose of my story was I actually thought they were a little bit ahead of the game, but the crazy part was that they had multiple times. One time they got backdoored through a processor into Elevon, and then it was found out, and I was working on reserve issues for ’em, but on another one, PayPal had approved them and they had a company, they disclosed everything about what they did. They submitted transactions. The processing itself would not have raised any red flags whatsoever. And three weeks after they were approved and run a couple hundred thousand dollars in transactions, underwriting comes back around and goes, oh, no, no, no, no, you can’t do this. This is with Elon, right? No. Well, Elon did something similar, but this was actually PayPal.

Riley Bangerter (24:30):

PayPal.

Christopher Dryden (24:32):

And it was crazy because to me, there’s this battle between ease of access and then underwriting and risk and underwriting and risk isn’t really, it’s not just the merchant account, it’s transaction monitoring and then what takes place, of course. But it seems like there’s a disconnect because yeah, we want to get people up and processing as fast as possible, but then the right hand doesn’t talk to the left hand and then boom, do you see any of that out there?

Riley Bangerter (24:59):

I see it all the time. It happens to my merchants all the time. It drives me nuts because it’s like you said, let’s get ’em up in processing. They’re doing good business, doing great business. And then some risk manager goes, wait a minute, what is this? And it’s like, whatcha talking about what is this? Shouldn’t you have signed off on it? And the process of underwriting, would you have not looked at that? And so yeah, we have merchants where the brake get put on all the time, and it’s very frustrating. I call ’em the underwriting nerds or the risk nerds, because that’s how I view, I think I’ll have pocket protectors and hopefully no underwriters that underwrite my deals are listening to this right now. But I look at them as all the Rick Morans, Ghostbusters type character.

Riley Bangerter (25:34):

Yeah, I get you.

Riley Bangerter (25:36):

That’s that guy. And I’m sure they’re not that, but it feels like they’re just trying to stop business.

Jeremy Stock (25:43):

Do you have any, sorry, Chris. No, go ahead, Jerry. Yeah, right. Do you have any thoughts as to what’s the solution from your perspective, from where you’re sitting? How can that be addressed?

Riley Bangerter (25:54):

Well, I think that they get incentivized to find the fraudulent deals. I’m sure that that happens. And that’s okay because like we were talking about earlier, get the fraud out of the industry because it’s good for everybody that’s really in this for the long haul. So I don’t know that there’s a better solution that I know of to do it. I think it needs to happen, but maybe it needs to happen on the forefront rather than weeks later.

Christopher Dryden (26:16):

Yeah, no, I agree. I agree. And the thing that bothered me about it was that these people were forthright in the merchant application process. I mean, they told them everything. I mean, they had every opportunity to ask whatever questions they wanted, and then there was nothing in the processing. I’m talking about three chargebacks out of thousands of

Riley Bangerter (26:40):

Transactions,

Christopher Dryden (26:42):

And I’m looking at going, how does this make sense at all? And people are, because they were dealing in physical gold, so they had to purchase the gold.

Riley Bangerter (26:52):

So

Christopher Dryden (26:53):

I mean, they were making smaller margin and they were just sort of acting as almost like as a liquidator to a certain degree of being able to have an exchange.

Riley Bangerter (27:04):

And the fact that the gold value goes up and down and fluctuates, I sure that there’s an arbitrage thing going on as well,

Christopher Dryden (27:12):

But they told them everything that they were doing, and the next thing is a bam. They’re fighting to get back money, which they need, just that they’ve invested in themselves. Yeah, totally. That’s the crazy part. So as we move into, I mean we’re getting kind of almost halfway through 2025, it’s kind of interesting, but for you, what do you see the challenges that are out there facing ISOs?

Riley Bangerter (27:37):

Oh, so ISOs, that’s a huge challenge for ISOs. They just need to pick up the damn phone when their partners call. That’s the hardest part for most of the ISOs that I deal with. It’s like, what are you guys doing? The customer service level has been dropped so far that the bar is not really that hard to reach anymore. And so that’s where we go above and beyond with customer service and service of our agents. Because I hate getting bad service, and I could name some big ISO names and talk about how bad they are, but the reality is most of ’em all suck.

Christopher Dryden (28:06):

Yeah, no, I mean that’s actually was like the birth of the ISO because the processors were horrible at it too,

Riley Bangerter (28:11):

Right? Yeah, totally.

Christopher Dryden (28:12):

Yeah. I mean, why pay them an exorbitant amount of money to do customer service just to have ’em call me?

Riley Bangerter (28:17):

Yeah, no doubt. And it’s true. And it’s a funny thing for me. We lean on partners whenever we can and whenever we need to. And Daryl has my partner, he’s got 25, 30 years in this industry, so there’s not much that we don’t know. And when we don’t know it, we usually go to you guys and have you take a look at things. And so between us and you guys interjecting, I don’t think there’s much that we don’t know or haven’t seen. And so we don’t really lean on our partners that heavily, but sometimes where it’s like, Hey, we need this terminal to be auto batch instead of batching at a specific time, and then they send out the one that batches at the specific time, and it’s like, what are you guys doing? Come on. Just little things like that that drive me nuts. That

Christopher Dryden (29:00):

Can really, yeah, unless you’re going to be downloading your own equipment and shipping it out yourself. I mean, you want to be able to rely on third party providers to be able to do their job. I get that all the time,

Riley Bangerter (29:12):

But what do you see? We had a big one. So we Go ahead. Go ahead. So we have a big Mercedes dealership network that is a merchant of ours. So we dabble in low risk as well with some Mercedes dealerships and our ISOs just every step of the way screwed up. And then they send out a how to guide on how to reset the terminal, and it’s literally faxed copies of copies of faxes. And I’m like, this is what you’re sending out to our merchant. What are you doing?

Christopher Dryden (29:41):

That’s crazy. To me, that is a very competitive market. And I will tell you that, and it’s dynamic because auto dealerships are very different. They’ve got five businesses in one. And the fact is, is that most of the people that I know that specialize in that industry, they’re on site, they go, they do the entire setup, they fly people out. I mean margin, that’s, we

Riley Bangerter (30:07):

Shoulda have done.

Christopher Dryden (30:09):

The margins are tight, the margins are tight, but those are lucrative accounts when you, they’re never going

Riley Bangerter (30:15):

Anywhere money out from Mercedes dealerships. And so now they’re up in Michigan too. So there’s a few dealerships up in Michigan, so the next time there’s an issue, I’m flying up to Michigan to do that, to be boots on ground there and just facilitate the process. Otherwise, it’s a nightmare trying to trust that somebody else is going to do the job. Right.

Christopher Dryden (30:31):

And the other thing is that we have so much consolidation in our industry now. It’s not just processors buying processors or you’ve got so much gobbling up of ISVs, but I go back to the Vantive Mercury marriage where you had a payments company buy a technology company and they could never really merge their ops or their culture. They were so different. And now you’ve got the same sort of thing where I watch, isn’t that what’s going on with global right now?

Riley Bangerter (31:02):

Like Global and Pfizer or something?

Christopher Dryden (31:05):

Global and Worldpay, global

Riley Bangerter (31:07):

Worldpay.

Christopher Dryden (31:08):

But yeah, how that’s going to take place. Those are at least two payments companies.

Riley Bangerter (31:13):

But

Christopher Dryden (31:13):

I think when you get, because a software company, the payment is just a part of it. It’s after payment really? Yeah, it’s such a small part of it. And right now, we had a podcast with Alan Copeman a few weeks ago, and he’s like, if you’re not out selling software, I dunno how long you’re going to be around, but it’s a different sale process. The payment just happens to be a part of it. But the software, I mean, it’s way more dynamic. It’s

Riley Bangerter (31:45):

Funny that you bring that up because we’re actually in the midst of integrating in with a software company that does edge computing, and actually it’s a hardware company that does software and there’s another software company that comes in the auto auction business. And so we’re integrating to both of these things and it’s going to be this robust package, and it just kind of happened by chance. And it’s like now I’m sitting here going, nah, this is the key to big wealth right there, having some niche that you fill the void of and everybody uses it. I mean, look at Toast. Toast did that with the restaurant industry.

Christopher Dryden (32:17):

Totally. And it’s funny, I was talking to somebody, I was down in Mexico this past weekend at a music festival and I was with somebody else and we were telling him about what we do in the industry we work in, and the person had a little bit of knowledge and he was like, yeah, software gets so specialized. He said, even today I saw somebody who was like, I want to say it was like a pool in jacuzzi, contractor software, something like that. I wouldn’t be surprised. Does it get more specialized than that? Right. Yeah. So yeah, software is becoming so specialized and anytime that you have it, you need a payment application, but you get payments companies because of economies of scale, they’re just gobbling these things up, but they don’t really know how to use it. Yeah, right. I mean, I find it very interesting. The software system that we use for the firm is owned by a payments company.

Riley Bangerter (33:20):

And

Christopher Dryden (33:20):

The crazy part to me is, is that the software company, the minute it got purchased by the payments company, it will never become, I think it’ll obsolete itself at some point because the payments company, oh yeah, look, we look at different softwares all the time, and we want our software company to be nimble and ours, and so we’re actually migrating to a new one that’s way more nimble way. It’s just an easier use. It’s much more friendly to the user and anytime. Yeah. So go ahead.

Riley Bangerter (33:56):

Are there specific attorney products that are used? Do all the attorneys use the toast of attorneys for

Christopher Dryden (34:02):

Yeah, there are many software systems. So we’ve got, it’s interesting, yes, the simple answer is yes, but there’s different aspects to any business where the law firm has its own. We’ve got research tools, there’s some AI tools that are coming out and they’re all different, and the utilization of them is all a little bit different and they’re not necessarily merged, but everybody’s building in AI into the software for whatever the use is, even for us

Riley Bangerter (34:38):

Have to, AI is crazy. I wanted to talk about that. We use AI every day and chat, GBT, Gronk and all the ones that are out there that are relatively cheap and easy to get into. And every part of our business is being automated by ai. And that’s how I see that these businesses are going to get bigger. Anybody in the payment team that hasn’t adopted AI is going to get left in the dust.

Jeremy Stock (35:03):

Riley, can you talk about some examples? What are some ways in which you’re using that in your business daily?

Riley Bangerter (35:09):

I’ll type up an email or I’ll get an email from somebody and I’ll go to type up my response and I go, Nope, let me just copy and paste this into chat GBT and let chat GBT do the response. And that’s how we started is just letting chat GBT rewrite our emails in a much cleaner, easier to understand fashion, and we had a great good success with that. So then we moved that to all of our marketing stuff, all of our blog posts, all of our white papers. I mean, everything is created by chat GBT at this point. It is funny. So I was working on my headshot to give you guys so that when you promote this, you can have my headshot and I had chat GBT touch up the headshot and it’s not there on the imagery. It’s pretty funny. It’s like, here’s me, here’s the fake. Yeah,

Christopher Dryden (35:50):

How pretty are you now?

Riley Bangerter (35:52):

No, it wasn’t even, there’s perfectly white teeth that are all center everything, and I’m just like, my ears were bigger and my cheekbones are higher. I’m like, that looks like my brother maybe, but not me.

Jeremy Stock (36:03):

It’s called catfishing and it’s now part of the industry. Yeah, absolutely.

Christopher Dryden (36:08):

Yeah, totally. That’s great.

Riley Bangerter (36:09):

My wife’s like, you cannot send them that picture. I’m like, what? I mean, it looks good. I got perfect straight teeth. And they’re like, she’s like, no, you cannot send that picture. I’m like,

Christopher Dryden (36:16):

That is not your doppelganger.

Riley Bangerter (36:18):

Yeah, no, it’s clearly fake. But yeah, I mean that’s why we’re using it. We have chat, GBT do inbound phone calls. So there’s another program that is slipping my mind right now. If I think of it, I’ll tell you. But it basically is a call out program that does dialing for us. That is pretty dang good. I mean, it gets results.

Christopher Dryden (36:42):

I’m waiting for that AI tool that has a dialer that says, don’t file, violate any of the provisions of the telephone Consumer Protection Act. And you could program that into it. It’ll figure out how to do it. I

Riley Bangerter (36:55):

Wonder if you could do that on this one. I’ll have to do that.

Christopher Dryden (36:57):

Oh, you should ask. I think that would be funny. One of the things when we were talking about topics that I found interesting to talk about, which you kind of sit in the center of, is that in the time that I’ve been in the industry, the term high risk is just, it’s kind of a nebulous thing and it moves because we go from this is really high volume, high risk, and the subject matter of what high risk is, it changes and it’s changed over time. Where do you see high risk going? Can you see being a visionary? What is out on the horizon?

Riley Bangerter (37:37):

Yeah, so I think that the metaverse and things like that, these augmented reality things that people are using, I don’t use them, but I think that that is where high risk is going. I think you’re going to be able to do in-app purchases, whether you’re playing in the multiverse or the metaverse or whatever it is. I think that that’s going to be something that is not known. And high risk is always just what’s not really known, what’s not general business. Because five years ago, like you said, things have changed. Five years ago, e-commerce was high risk. It’s not really high risk if you’re doing straight retail e-commerce at this point. If you’re delivering a product, there’s real no risk. There’s no real risk there at this point other than some friendly fraud. So that tolerance changes over time and morphs into different things. I think that the Metaverses are the next big thing. We have a partner that invested into Acadia and he bought into a metaverse company as well, and that company’s about to do their IPO and he’s going to a billionaire at this point because as soon as that happens, I mean, it’s just ridiculous the amount of people that are using the Metaverse and Metaverses that are out there. I don’t see it, but I know that that’s going to be a big payments thing.

Christopher Dryden (38:47):

So you think that’s like, what is that all through Oculus? How are people accessing that for me with you, man, I’m too old at this point. Yeah, I don’t care. The adoption probably isn’t going to happen, but I know that it’s out there and that people are going to do it. And I can see how people, while I’m not a gamer, I mean I go back to Nintendo and Atari and Sega, before it was, we just bought a Super Nintendo for my daughters. I date myself with all that, but

Jeremy Stock (39:25):

Commodore 64.

Christopher Dryden (39:27):

Yeah, Zork, right? Let’s go back to, but I will say that the gaming culture, I actually looked at this, I probably even shouldn’t even say this out loud. I think this is a great business idea, but if you could create how GameStop has kind of gone away, I think the next iteration of something like GameStop, a community around it is having kind of a community center, which is a business

Riley Bangerter (39:54):

That

Christopher Dryden (39:54):

Does e-gaming, that does lessons, that does tournaments, that actually where kids can go hang out the country club with other kids that are doing something similar that they’re all interested in build. I think they have that already. Well, I’ve heard that they have it in Europe, but I don’t know if they’ve got something here that’s really focused on it. But I do believe

Riley Bangerter (40:20):

That, I think e-gaming is going to be an Olympic sport in the next year or two.

Christopher Dryden (40:24):

I agree with you, but Oh yeah. And I think so too. But I also, I think that there’s a lot of business opportunities around that that people aren’t really tying into where I still believe that even with gamers, they like other people, they want to be around other people and they want to compete and talk shit

Riley Bangerter (40:43):

And

Christopher Dryden (40:44):

So not just do it online. So I kind of feel like there’s an opportunity to get into that. And even though I’m not into it, I see the opportunity and I kind of see the metaverse as being the same thing. Look

Riley Bangerter (40:58):

At Roblox, look at the company, Roblox. I mean, they’re a giant company now, publicly traded, and I know about them because I follow Nancy Pelosi’s stock trades, and so I’ve done pretty well that way. But Roblox is a giant company that’s just a game company. It’s crazy. And it’s just in-app purchases, and it’s exactly what I think is the future of all of the games is going to, I mean, you’re going to be able to do Call of Duty and be able to buy stuff right then and there immediately.

Christopher Dryden (41:24):

Yeah, totally. Totally. Hey look, I can get some dishwasher parts on my Call of Duty game. Is that right, Alexa? Yeah. Alright, ba, so I’m going to give you the last word. This is somewhat your show. What’s the biggest takeaway you want to leave us with about either Acadia or payments or what do you think is the most important thing is that you can share with

Riley Bangerter (41:47):

Our, I would, let’s all get the fraudsters out of the industry. Let’s get the people that are the bad actors out as many of us, the people that are here for the long haul. Let’s get rid of the people that are here on the short term side and band together. And to do that, I guess is the best thing. If we see somebody doing bad business, let’s let everybody know payments should fuel growth. I think they shouldn’t drain margins, they shouldn’t be a weight on the business’s shoulders. Let’s help people make informed decisions and make this a thing that empowers business owners to make more money. And then we make more money and everybody’s happy.

Christopher Dryden (42:25):

I’m with you. Hey, how do people get ahold of you?

Riley Bangerter (42:29):

So you can call me on my cell phone number is beep, beep beep, beep beep beep beep. Just go to acadia payments.net and hit the email us or contact us form and we get ahold of you that way.

Christopher Dryden (42:42):

And just for the people out there that don’t know, Acadia’s has got two A’s at the front of it, two A. That’s right. Just so you know that I meant to ask you, where’d you come up with that name? Are you Cajun?

Riley Bangerter (42:53):

No, when I was a kid, I was a professional and I worked in the wakeboard industry for 20 years of my life just on the side. It was like the thing that paid for the travel around the world. And so there was one of the people that was involved in the industry pre 2008 was a company called Acadia. And so this is a show of respect to the wakeboard industry that I came from that now I’m doing real business and I’m a real adult, really adulting, but still having fun with it. And so we keep the logo and the colors schemes and all that stuff changing and I like to do fun things like that and not make it look like every other blue and white website that’s out there of all the other payments companies just kind of set ourselves apart differently. And then to show respect for my roots. Yeah,

Christopher Dryden (43:37):

Well according to the painting behind you, I can see it, bro.

Riley Bangerter (43:40):

Yeah.

Riley Bangerter (43:41):

So funny story about this. We got these in Santa Cruz. I had some friends that owned a restaurant and right when I met my wife at the time, we just started dating. She takes me to this restaurant that she worked at in Santa Cruz. She went to uc, Santa Cruz. And so I see this painting and I’m like, dude, those are amazing. I got to have that painting. Well sell me the painting right now. He’s like, they’re not for sale. And I’m like, everything’s for sale. Just name a price, I’ll buy it, I’ll pay it. He goes, no, they’re not for sale. Well fast forward 12 years, they sell the business, sell the restaurant. And he goes, Hey, all those paintings you like, they’re all for sale. And I’m like, yeah, thank you. So he sold me 11 of these paintings. They’re by an artist called Lindy Martin. She was an amazing painter out of Santa Cruz. And so he sells me all these paintings. 11 of ’em for $6,000 is cool. Didn’t think anything of it. I take ’em into the local art gallery, they’re worth like 20,000 to pop. And I’m like, get out of town, dude, that’s awesome. I felt bad. I need to give you more money for this. But no, that’s the

Christopher Dryden (44:36):

Whole thing about art, man. I bought so much art. Just you get it at an art. We have art walk here in San Diego and I go every year and I find something a little bit interesting and every time I go and I might pay 500 bucks for something or maybe 700. I will tell you randomly I looked at something that I bought and it appreciated a lot because the artist got big and you just don’t know. Yeah,

Riley Bangerter (45:03):

Well look at that Banksy guy. I mean he’s doing, the people are selling his things for hundreds of millions of dollars.

Christopher Dryden (45:07):

Yeah, it’s like Basquiat, right? I mean it was sort of one of those things where, here, let me draw something on a napkin like this is worth millions bucks, Bonker. Alright, well look, Riley Banger from Acaia Payments, we appreciate you coming on and your Acadia is two a’s at a.net, A-A-C-A-D-I a.net. You can reach out to Riley or Daryl Peppers, his partner. Good guys, and thank you. We really appreciate you having you on.

Riley Bangerter (45:36):

Hey, thank you. I appreciate you guys taking the time to let me be on.

Jeremy Stock (45:39):

Okay, absolutely. See you the next one. Thanks Riley. Thank you for listening to this episode of the Payments Experts podcast, a podcast of global legal law firm. Visit us online today at global legal law firm.com.