Less than one month in, and 2018 is already proving to be a year of innovation in fintech – the primary trends being democratisation for the consumer and simplification for the merchant.
One of the foremost ways in which this trend is being realised is through the integration of fractured elements, and with GDPR fast-approaching, storing customer data in a number of different databases may become less common.
Bolt’s aim is to make the payment process easier for both parties – consolidating every element of the payments process in one end-to-end platform, combining checkout, payment, and fraud detection systems.
I spoke to Bolt’s CEO and co-founder, Ryan Breslow, about the integration of the payments process, and the direction of fintech in 2018.
What’s the story behind Bolt?
We are building a very new take on the online payments platform. The insight we’ve had in the payments space is that there are always things surrounding payments that live outside of payment processing. If you’re a company dealing with a high-converting checkout experience, you also have to deal with things like fraud, you have to calculate tax and shipping, you have to deal with customer accounts – many different factors. Right now, the payments space is hyper-fragmented – a payments platform can involve up to around a dozen different tools.
Ecommerce traditionally had this philosophy of a layered approach, which has very much stifled companies. Their technology becomes so convoluted. Our aim at Bolt is simply to put all of these tools in one end-to-end, hyper-optimised checkout experience. We’re also the first payment platform to offer a 0% fraud guarantee.
How did you come to found this payments platform?
I’m a bit young – I’m 23 years old – but I’ve had a lot of ground floor ecommerce experience. I had a few earlier commerce companies that weren’t all that successful, but I gained a lot of understanding of what it takes to run an online business. In middle school, high school and early college I also ran a web development agency.
Bolt is the ideal product that I wish I’d always had, for myself and for my clients. I was also into digital currency at a very early age – I founded the Stanford Bitcoin Group, an academic research group in the digital currency space. I broadly had a passion for how to make online payments better and faster, and that led to leaving Stanford to pursue my ideas, which would eventually lead to Bolt.
Five years ago in the payments space, the basic tools didn’t exist. It took a very long time to process payments, fraud detection was extremely bad, as were shopping carts. Nowadays, a lot of the tools are much better. Payments processors are available to innovate much more rapidly, fraud detection tools are much more solid, as are shopping carts. You have a lot of tools at your disposal, but we realised that these tools are all living in silos. Now we have an opportunity to consolidate all these tools, and bring to market a platform where they’re all in one place. Not only does all-in-one make it easier for the merchant, but it also provides greater visibility from across the stack, which allows us to perform our function better than any siloed tool. For example, fraud detection providers talk about all the data that they can see – but they’re not in checkout, they’re not in a processor. We’re getting so much more data because we’re also doing the payment and checkout, so we can see everything that’s going on.
Tell me more about your ‘0% fraud’ guarantee.
We’re extremely confident in our technology, and we’re putting our money where our mouth is. Really, what we’ve come to learn in the data science space, is that data rules – you need to have the best data. That’s why Tesla have spent hundreds of millions of dollars on algorithms, because they really understand their surroundings. We run the checkout experience, so every behavioural signal you can possibly track, we’re tracking in addition to the customer’s identity information, their payment information, and so on.
It takes that extraordinary amount of data – data that we already have, and that nobody else in the space does – to achieve that kind of precision. The thing that we really want to emphasise to merchants is: don’t be duped by most fraud providers. A lot of companies will say they’ll get your fraud down from 1% to 0.1%, but they’ll do it by blocking 5% of your orders. False positives are about five-times higher than fraud itself, which is extremely damaging, because not only do you lose an incredible amount of revenue this way, but a customer getting blocked is the worst experience they can have in this process – they’re never shopping with you again. They’re probably complaining about you to their friends and sending negative brand signals. We’re not focusing on the fraud detection element too much because, although it’s radical, it’s only to make merchants comfortable with the amount of transactions we’ll start approving. We’re hyper-focused on approving more orders than anyone else in the industry.
A current trend in fintech is the democratisation of finance – toppling the monopoly that the incumbents have held over consumers’ financial lives. Why do you think this trend is so strong right now?
I think the world has become tired of complacency in finance and money movement. Payments companies have continued to take their slice off the top of transactions, and haven’t innovated for the last few decades. This is very difficult to change, which is why there’s that complacency – it’s deeply rooted and ingrained, and it’s almost impossible to change. But I think the public is demanding change in how money and payments are handled and are jumping at this opportunity.
Finally, what tips would you give to any fintech/paytech startups getting the ball rolling in 2018?
I would say that fintech is extremely difficult, and there’s a reason for the complacency in the entrenched incumbents. You have to come at it with a soldier-like approach. The key to success in my opinion is very strong technical talent. We’ve brought together people who are much smarter than us, from some of the world’s greatest technology companies, to help us innovate. A lot of the incumbents don’t have great engineering talent. The key fintech leaders of the future don’t just need great ideas, but also need top technological talent to execute those ideas. Without that, it would have taken us another 10 years to build what we’ve built, and by then the space would have moved on. Being able to innovate rapidly from a technology and engineering standpoint is the most important thing. It’s what I look for when I’m working out if a fintech company is formidable.
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