LEADERS IN PAYMENTS PODCAST
HOSTED BY GREG MYERS
BRIAN GOUDIE, CEO OF AURORA PAYMENTS EPISODE #1
Intro: Welcome to the leaders in payments podcast where we talk to C level leaders from across the payments landscape. We’ll be discussing the products and services that impact the payments space today as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Greg: Hi, I’m your host Greg Myers, and this is episode one featuring Brian Goudy, the CEO of Aurora payments. Brian grew up in the Boston area and was one of nine kids being raised by a single mom. He spent nearly 20 years at first data before becoming the CEO of Aurora Payments. He has some great advice for those starting out in the payments industry. So let’s get started.
Hi Brian, thank you for being here and welcome to the leaders and payments podcast.
Brian: Thanks Greg. Appreciate you having me on today.
Greg: So let’s just dive right in. Tell our audience a little bit about yourself, where you grew up, where you went to school, where you currently live, things like that.
Brian: Yeah, so I grew up in Massachusetts. I guess if somebody asked me what distinguished my upbringing, I was actually raised in a family of nine kids with a single mom. So you learned to be independent and scrap and you know, if you want to eat, you got to go and make you dinner. If you want your clothes clean, you gotta go clean your clothes when you live in a family and nine with a single mom. But we grew up about an hour and 20 minutes outside of Boston in central Mass. I went to school in University of Richmond down in Virginia for a few years and then UMass Boston. We lived in Charlotte for about 15 years, which I loved. Great place actually four of my five kids were born in Charlotte. I lived in Atlanta for five years and about 12 months ago as Aurora opened its headquarters in Tempe, Arizona. I made the move out to the Valley of the Sun, currently reside out here in the Phoenix area, which I love. It’s beautiful out here.
Greg: Great, great. Now let’s sort of jump right into Aurora. So tell the audience a little bit about Aurora and what you do there.
Brian: Yeah. I’m the CEO of the company here. Aurora is I guess a bit of an amalgamation of multiple ISOs from over the years that had been acquired into one company. Today we have approximately 25,000 merchants, majority of which sit on First Data platforms, but many of which sit on TSYS as well. A few on Elavon and a few others platforms, but primarily it’s a First Data TSYS full-service provider shop. We have about 80 employees. We have two headquarters, well we have one headquarters in Tempe, Arizona and then we have a location in Ventura County, California as well and Moorpark California. Yeah. Basically we serve SMB merchants. I would say anywhere from $50,000 in annual sales up to 70 million in sales, you know, all over. We go to market through our own call centers. We go to market through acquired properties like Chosen Payments. We’ll probably talk about a little bit later on. And a lot of the business that we have is through third party distribution partners, whether they’re in sub ISOs, agents, software companies, associations and such. We added about 800 accounts a month in 2019 and we processed about $8 billion.
Greg: So you’ve gone from zero to eight and basically a year?
Brian: Well, I really, I wouldn’t call it that because again, we did acquisitions. Several companies, a company called PSI, a company called Blue Square, a company called Applied Merchant Systems. And then the most recent transaction middle of 18 was Chosen Payments. So those companies existed in the case of Applied Merchant Systems. They started in 2005 so their companies existed and as we acquired them, Aurora came into existence in April of 2018 which was around, that was the time that we raise capital. When I came here at the end of 2017 my charter was to raise capital and we ended up settling on a partnership with Prudential Capital. And as part of that is when we solidified a lot of the acquisitions about Blue Square, Chosen Payments and Applied Merchants and those companies all sorts of sit underneath. What is Aurora today? I can’t take credit for it in a year and a half going 8 billion organically.
Greg: Yeah. Yeah. And you have a relationship with Goldman Sachs too, right?
Brian: We do. Goldman Sachs has been a lender to the company since 2015 and you know, they’re a great asset. I’m sure there’s a lot of folks listening who do business with Goldman, but one of the beauties of Goldman Sachs, specifically for us, it’s Taylor Mefford, which a lot of people know. Taylor has been in the payment side of the business, I believe since 2003 or maybe 2005 it’s been a while that he’s been in it. So in addition to being a lender, he’s a great voice for us to kind of bounce ideas off because he has great contacts, has worked with large firms like Priority. And what was Pivotal Payments at the time. I believe he had done some business with Phil. So people that I respect, John Priori and Phil Fayer and others, he’s had relationships with those guys. So while he’s got confidentiality and all, he has good context for what a great company looks like.
Greg: Well what do you think differentiates your company from, I mean it’s obviously highly competitive industry, so what differentiates Aurora?
Brian: So I look at the industry again, a lot of what I’ll say certainly is driven by the fact that I was a senior leader at First Data and was with First Data in different capacities almost, you know, 20 years. But if you look at the industry in the last few years, there has been, you know, unprecedented merger acquisition activity at least as far as I can recall. And no, at the top of the food chain, when you look at things like the FIS WorldPay transaction, you know, TSYS Global, First Data FiServe, these are monstrous transactions that are going on that have huge impacts into the entire payments ecosystem. And I started to see this a little bit, no, my last year as a First Data, the number of non processors, true processors that own platforms like those companies, but your traditional super ISOs like say North American Bank Card today or Nuvei, those kinds of companies, a lot of them were also bought.
A lot of these companies have been purchased as well as at the same time you have these aggregations of big time processing platforms. So where did, what does that do? It leaves situation where that’s super ISO that sat below the big processors. There’s fewer of them today. They’ve either been acquired or they’ve merged into other companies. I don’t even, that’s kind of where Aurora sits today for a software company or a distribution partner or a technology firm looking to do business with somebody maybe who’s not on the size and scale of what these, these aggregated processes are today. There’s fewer choices. Well, I spoke and that’s where we sit. We, we’re a full service provider. As I mentioned on First Data and TSYS, we have multiple banks sponsorships. We have six bank sponsorships. We are, I would say relatively agnostic in our view as to the platform with a bank, we’re not highly prescriptive to our partners as to where the business goes. We do, as I mentioned, you know you brought up the fact that we’re backed by Goldman Sachs. I mentioned that Prudential Capital is our equity partner, so the access to capital perspective sitting where we sit and wanting to do a lot of acquisition and strategic vertical acquisition. We have the money to do that and execute on that. I think that from a strategy perspective, that is what we’re looking to do. When I was at FD, if you think about the constituency that a place like First Data or a Worldpay has any of these good processing companies. At First Data you have firms like Bank of America and Wells Fargo and PNC and then you have you know, a thousand ISOs and you have your own direct sales force supporting banks and strategic partners and you have a lot of mouths to feed at a place like that.
You have to basically be good at everything. It doesn’t necessarily mean you’re great not to say that they aren’t great at certain things. Right. It makes it more difficult because you have, you’re spread so thin. That creates an opportunity to me for a company like Aurora where we could say we’re not necessarily trying to be great at everything. We want to be great at certain things. Strategically that is what we’re aiming to do. We are looking to either acquire or build organically through five to seven vertical markets that we believe are sustainable. You know, low attrition, high growth, maybe complicated to enter into those vertical markets and making our, you know, deploying our capital in those places. The other thing I think, you know, when you talk about differentiating ourselves, I’ll use Cayan. I have, you know, the Atmos respect for Henry and what he did from transforming what was Merchant Warehouse up until I believe it was 2011 or 12 into more of a firm he created Genius Platform became Cayan and I think he went through a transformation and others have done that.
Henry’s not the only one. I think one of the things that a guy like Henry would probably say is that, you know, he wanted to control his own destiny. If you think about FinTech being more on the tech than the Fin side of it, you got to create your own technology – wholeheartedly agree with him. And then Card Connect did a good job of this as well. We are right now in the process of building out our own payment platform, payment gateway, if you will, and an ERP system that we control. While you know there are fewer of those big, large Goliath firms at the processor level, I don’t really want to interpret what their motivations may or may not be places like Aurora and NAB you want to control your own destiny and to do that properly you have to invest in technology.
So for us, I think the biggest thing we can do here is having our own payment platform. If I’m going to invest in five to seven vertical markets, I want to have the ability from a technology perspective to invest on technology within those markets and on my timeframe and not end up in somebody’s development queue because I don’t control the gateway. So that’s a big thing that we’re doing today is trying to control not only the client experience as a full service provider where you do your own customer service, you do your own underwriting, fraud management, et cetera, but controlling the technology that propels the small businesses in your portfolio. We’ll continue to make that investment.
Greg: Sure. You read a lot in the payment space about value added services, a lot of ISOs and technology companies coming along that want to play in this space and you know, being just a feet on the street ISO just, you know, it doesn’t seem to be the future. Sort of what is your view on that and the value added services? What are you guys doing in that space?
Brian: First of all, I don’t know that I agree with the idea that being a feet on the street ISO is a dead industry. I think people would like to think that. I think that let’s stay Clover for example, which I love. Let me get that out there. Right now I think Clover is a product and solution that has continued to evolve over time from when it was introduced back in 2013 or 14 timeframe. But if you take solutions like that and other software vendors that are in the marketplace today, we love, you know, in Aurora we want to get behind vertically aligned software solutions. Right now, there’s the gentleman that we’re doing business with who is a Vietnamese descent, and for anybody who knows much about the nail salon industry, the nail salon industry has dominated by Vietnamese culture and owners. So they’re going to demand, you know, a solution at the point of sale that is customized to their, you know, their wants, their needs and frankly their culture and their language.
So those kinds of things I love and I think there’s going to be a place for that as we continue for in payments where things will become more and more specific to industries so where does that leave the local feet on the street ISO. The reality is that particular guy that we’re getting behind wasn’t nice. So he saw it from his boat, from his culture, and from like being a distribution ISO and thought that there was an opportunity for him to disrupt the salon industry. With that said, I can tell you just being in Tempe, Arizona here, having gone to lunch the other day, a local pokey restaurant and we saw that the guy had a Square device on the table and we figured his average ticket has got to be around 20 bucks. That’s a pretty significant hit. The 10 cent increase. And we started a conversation with this guy and let him know that we’re local guys.
I think if you go into areas around this country, you know a lot of times people get caught up in New York City, San Francisco, Chicago, Miami, I grant you, there is massive opportunity in those hubs, but there’s also a lot of rural areas in this country and I think being a local business owner, whether that’s a small business size or a small software company, I wouldn’t give up frankly. You know, and just say, Oh, I guess we’re all pay and bye sir, we’re going to get all the business. I think there’s a place for people locally with the right solutions, right technology to continue to win. You know, the beauty of this industry is the recurring revenue aspect of it. So there’s a huge opportunity out there in the U S today for really all distribution partners.
Greg: So this next question is sort of a two part question, what is your point of view of the payments industry as we look out, let’s say two to three years and then let’s look out 10 years. So what is your view of where all this is headed?
Brian: Well, I’ll start with the two to three year piece of it because that’s probably easier to try to look at. It’s going to be fascinating to see the integrations of these large mergers and then you’ve got like a Bank of America kind of going at it alone. You know, there are large, large players in the payments industry that are going through some significant changes. And those will take years obviously, but that creates opportunities for others. How software companies continue to view payments. There’s obviously in the last three to four years an emphasis on integrated payments and some of these software companies are probably, they’re going to go it alone. They are going in alone or they will continue to go it alone and then some will continue to say that’s not their aim. It’s may not be there, no core competency and they want a partner versus going alone.
But it’d be interesting to see how much more on the software side folks who are going it alone. I think you know what I said earlier and this is an opportunity again, if you look at payments and you go back 10 years ago, 10 years ago, I think it was around 2010 it may have been 2011. I think it was at the Midwest acquires meeting the guest speaker was a guy named Jack Dorsey. And I also, I was fascinated by his speech because I think he basically told everybody how the payments industry is antiquated and he’s going to disrupt it. It lacked transparency and integrity and all these things he said, and he was really more or less insulting the very audience he was talking about, but he had conviction. But what he was saying, and I think we all know that the amount of money that is poured into the payments industry from 2011 let’s say 2016 continuing now into 2020 dwarfs , what was poured into the payments industry the previous 30 years.
Not saying that Square was the only one, but certainly the need for new players and for new processes and payment methods and such were needed then and they’re needed today. I mean you can still walk around main street America and see that there’s a huge opportunity to continue to grow the next couple of years. So it will be interesting to see how much more specialization. I think it will just continue to be specialized markets and I think it will also be, you know, nontraditional payments. You’re going to see no, continue to see the work of ACH platforms B to B platforms. Again, non-traditional payments, mobile payments, uh, I don’t see any, you know, stop in that. I think it will continue to evolve that way to meet with millennial demand and that’s a big demand as far as trying to predict the next 10 years.
For me that’s hard to do. I would just go back to past performance is an indicator of future for anybody who’s looking at the payments industry today and thinking, Oh wow, incredibly evolved. I would go back to the fact that again, that speech that I heard 2011 maybe and it’s 2020 today and if you walk around, I’m not so sure that, but the payment space is even close to being working. Could you go to, and I think then mobility will drive that. The form factor of phones will continue to drive that and security will drive it. You know, we spent a lot of time in here. If you, if you think about security and information security and how easy it is to be hacked, those are the kinds of things that will continue to drive what the payments industry, how the payments industry works, and what the card brand thinks about in terms of information security and card brand security.
Greg: Sure. So let’s switch gears a little bit and talk a little bit about you. So tell us your journey, how you got to be the CEO there, sort of what steps through your career and experience did you have in order to get where you are today?
Brian: Well, I would say that I’m probably a nontraditional journey than most. I’m not Wharton trained. I didn’t come in at a very high level when I went to work for First Data, I was actually living in Boston and this was in 1995 and a buddy of mine worked for it Diners Club. And he had heard about an Alliance with a company called First Data and a bank – Wacovia bank down in Charlotte, North Carolina, which by the way, live in Boston. I didn’t know who the heck Wacovia bank was or who First Data was. I didn’t know anything about it. There was a time in my life that my brother had gone to Davidson college, which is right outside of Charlotte, so I knew a little bit about Charlotte. I know I want to go somewhere warm and I thought about it having done some research.
It was a great opportunity. So my first job in actually I was a sales rep out selling merchant accounts to SMB merchants, so that’s always been my first love is working with small, medium sized business owners. And create solutions for their needs. I left First Data in 1999 and at that time I went and did something that I thought I was crazy to do. Well, I went to work for what was then the largest ISO in the United States. It’s called Card Service International, which has actually spawned a lot of people today that are in high places. If you do a sort of a family tree on Card Service International you’d be shocked at how many people’s roots started there. But I thought I was crazy. Don’t from a bank environment to go into work with this crazy ISO out of California. And the reality is like a lot of things you do in life, the best decisions are the ones you probably fret the most.
I learned so much when you’re in a bank environment, it’s a bit of an in the payment space probably. Otherwise it’s a bit of an insular world. You understand that bank’s culture and how things processes are done within the bank, but you don’t necessarily get a good broad view. While I am at the Card Services International my horizons were exposed like immensely compared to when I was, you know, my first few years of First Data. Then First Data actually acquired Card Services. So that was my first introduction, I guess into the acquisition world. I was on the other side of it, having worked for Card Service and then having them acquired by First Data and that was 2002 from 2002 until the time I left in 2016 I basically had, you know, all kinds of senior roles that you could have in North America. On the acquiring side.
I was always on the acquiring side. I ran all the sales teams at First Data on the bank side, the ISO side, the call center. Really every, every distribution partner, the first day they had outside of enterprise, you know, if you think about no entities like McDonald’s and Best Buy. There was a different division that ran the big guys, but all the other entities, I got to see it distance and it’s different, you know, dealing with third party ISOs or dealing with that, a bank partner, dealing with a Sam’s club. We had, you know, each of those has its own culture, processes and there’s good and bad and all of them. So it was a great education to kind of see things from that wide lens at First Data. Over my time there. It’s great.
Greg: Yeah, it definitely sounds like payments is in your DNA.
Brian: I would say. And by the way, I should mention Greg, you know, when I left First Data, and I guess it was 2017 I forget these days, but what attracted me to the Aurora opportunity was I had a lot of opportunities to go to obviously finding the places. But when I looked at Aurora, I was thinking, here’s a company that has $15 million or so in EBITDA and to me it feels like a startup business, and to this day it does. When I, when I came here, I guess it’s going on two years. Even to this day, as I walk around the Tempe office, I feel like we’re a startup. I think the opportunity that we have is endless. That’s the beauty of the payments industry. There’s so much opportunity and to me versus something up from the ground. I like the idea that there was a bit of a jumpstart here and we could sort of iterate off of that. And that’s really what I’m doing today. So it’s been a great couple of years here at Aurora.
Greg: Sure. So what’s something that you’re passionate about? It could be work related or not.
Brian: Well, it was the New England Patriots until a week ago, but no, uh, I’ll, I’ll always be passionate about my Boston sports teams.
Greg: Right. Tough loss.
Brian: It was, it was, All good things must come to an end. We’re gonna let someone else win one here. There you go. I mean, my family, I have five kids that are, you know, one of them just got, he’s his permit, he’s going for his license in two months. So he’s sixteen. My youngest is eight years old, soon to be nine. So they’re at that age where it’s just fascinating to see them grow. Anybody with kids knows the challenges, but the rewards are so great. So obviously watching the evolution, the transformation, my kids every year is my number one. Family. Sports is a big thing for me. Sports and fitness. Our employees here, I mentioned we have 80 employees and this probably had a more meaningful member to it when I worked at a place like First Data, I always think of in terms of when I come to work every day, it’s our clients, the merchants, our distribution partners that I have responsibility for and our employees.
But our employees, if you, you’re the nuclear family math and everybody had two and a half kids and you have a hundred employees and you’re really responsible for the lives of 250 kids as well. I always think about it that way. I guess cause I have kids, I’m from a big family about how important it is that when you, every action you take affects those. Yeah. Are in the building every day. But it’s those that are part of those households and those families. So I guess that’s the most important thing. And for me, you know, in my career what is always been important to me, whether it was technology partner or an ISO who calls me up and says they’re getting married or they just bought their first house or they’re about to have the first kid.
Those things are things that stick with me. The fact that they would care to even call and tell me that it’s important to me. I mean it’s, you know, that we’ve done something. We’ve had an impact on family’s lives and I guess that’s the most important thing to me when it comes to work today, it’s my purpose. There’s a guy named Steve Barger who worked at First Data and he was always trying to coach everybody up on, knowing your passion is not your purpose. Those are different things. You got to understand the difference in purpose and passion, I guess. No, my purpose in coming to work every day is somehow I have a better, some kind of an impact on the lives of men, on my employees, but their families.
Greg: Sure. That’s great. What would your advice be to someone just starting out in the industry? I mean it’s become sort of a hot, sexy industry to be in. A lot of young folks are getting involved, so you know, what would be a couple pieces of advice you’d give them?
Brian: I would say number one I would say is don’t think you can do whatever it is in your head that you can do. 10 years ago I’ll go to that. This was, I would argue a lazy industry, it was run by a few large processing companies that we’re still selling, you know, credit card terminals. That wasn’t that long ago and sure there’s been a lot of change, but there’s a lot of change to go and there’s a lot of great ideas so I would not sell yourself short. I would also tell younger people that take the risk while your obligations aren’t great. I’ll go back to that Card Service analogy. The CEO is a guy named Chuck. You know, he tells the story how he started out in his garage and 1988 or wherever it was and the reality is that I was there in 1999 I think Chuck, no, I don’t want to give his age but when I do the math he was a pretty young guy, but he also didn’t have kids or he was just starting family. And then I think about, especially in my ISO days, a lot of young guys, they weren’t entrenched with family yet, but they had a vision and a passion to want to run their own business. I’ve seen so many of those people do phenomenally well, phenomenally well. And I always think about part of it is because they had the vision, but they also didn’t have any kind of obligations, deep obligations, family obligations that would prevent them from taking that risk. So, I would say take the risk in this industry. Nope. Shoot for the moon. You know, while you’re in a situation you can do that, you know? And as far as just trying to grow your career, we rejoice in the success of others.
You know, if you’re really want to grow and be a leader in the industry, you have to be the kind of person who I think someone else’s success. You get more satisfaction from someone else’s success than your own. Is it important? I would tell people, and this is probably a life lesson more so than it is a payment’s lesson, but it certainly holds true in business and in payments too. But I’m a huge fan of John Wooden and a lot of the things that John Wooden says, and probably my favorite quote that John Wooden says that’s so applicable in life is control what you can control and don’t let that what you cannot control control you. Yeah. I’ve seen that a million times where people get spun around the axle around things that ultimately they really can’t control. And the calories that they burn would have been so much better diverted towards something that they could have impacted versus wasting all the time on the thing that they could not control. So I guess be daring. Focus on that, which you know, you have, you can truly impact versus that which you can impact and rejoice in success.
Greg: No, that’s a great answer. Is there anything else that you’d like to share, whether about your company, your career, more advice, anything else you’d like to share before we wrap up?
Brian: Uh, it’s just a great industry. You know, always, I can tell you again from a guy who started out as a salesperson, you know, managing 20 Wacovia banks and uh, really in Raleigh, Chapel Hill, Durham area in 1995 to today is the opportunity. It’s not just me obviously for me, I’ve had five kids to that career and it’s afforded me so many amazing opportunities, but I’ve seen it with all kinds of other folks in the same industry. Yeah. It’s that whole recurring revenue aspect of the industry. This industry changes daily, weekly, monthly. I’m afraid to take a week off from work cause I feel like when I come back industry’s passed me by and that’s how dynamic this industry is. But it’s also not, it’s not weathered. I think there again, there’s so much opportunity out there today if you, you know, if somebody who’s going to come into the industry, I guess one piece I guess I would say is if someone was new or they were coming into this industry, I used to do trainings for Card Services agents back in 2000 and told them the same thing is if you try to understand everything about this industry, you’ll probably fail.
But if you just focus on something you care about and turn that into your business and just become the best at that. And then you can layer in other things. So if you love the restaurant industry, understand everything about the restaurant industry and how payments can impact it and just go sell restaurants. If you love charities, understanding about charities, go find solutions for that and be great at it. Try and be great at everything in the payments industry will drive you crazy. Okay. Is highly rewarding. And again, there’s just so much opportunity. I’ve seen these, know people grow and their families grow. I’m blessed to have gotten into it when I left Boston in 1995 to get into it and uh, I’ll probably die in the payments industry.
Greg: Well, Brian, I really appreciate your time today and thank you for being on the show. I know you know your time’s very valuable, so I really appreciate you taking some time out to be with us today.
Brian: I appreciate it. Greg, appreciate what you’re doing. You know, trying to get out there and evangelize our industry and if I can help you out at all. You know how to get ahold of me.
Greg: Great. I appreciate that. And to all you people out there listening, I thank you for your time as well. And until the next story…
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