The Executive Interview Series provides readers with exclusive insights from movers and shakers in the payments industry. The Payments Industry is under continuous transformation, as such this series provides diverse perspectives on everything from strategy to payments technology and to the future of the industry.
In this interview, TSG’s Market Intelligence team-member Alex Ferguson sat down with Paysafe CEO of U.S. Acquiring Afshin Yazdian to learn more about his experiences in the payments industry and his transition at Paysafe.
Background: Afshin joined Paysafe as its CEO, U.S. Acquiring, in July, 2020, bringing over two decades’ leadership experience in payments. In his role, he is charged with bringing to life Paysafe’s vision of being the U.S.’s leading payments solutions provider. Before joining Paysafe, he was President of Priority Payment Systems (PPS), a Georgia-based payments technology company serving over 174,000 American merchants. Before that, he held the role of President and CEO of New York-based Cynergy Data until its merger with PPS in 2014. Earlier in his career, he served as Executive Vice President and General Counsel of iPayment and was instrumental in the formation of the company – itself acquired in by Paysafe in 2018. Afshin holds a Bachelor of Business Administration (BBA) degree from Emory University’s Goizueta Business School in Atlanta and a Juris Doctor (JD) law degree from the University of Miami in Coral Gables, Florida.
Q: TSG’s Alex Ferguson:How did you get into the payments industry?
A: Afshin Yazdian I started my career in the late 1990s as an attorney with a large law firm based in Nashville, Tennessee. My introduction to the payments industry began when I worked on mergers and acquisitions for a payments business, which was eventually sold to Elavon. After the transaction, I decided I no longer wanted to be an attorney, enticed by what was going on in the payments space. That was an exciting and fascinating time for the industry, which was undergoing a rapid evolution at a merchant level from traditional payment methods like cash and checks to widespread electronic card processing supported by technology changes in POS and other hardware.Against that backdrop, I left the law firm to enter the venture capital world. Ultimately, that led to me helping launch a company called iPayment in 2001, where I maintained a leadership role for over 10 years.
Q: Alex FergusonDescribe your biggest contribution to the payments industry thus far.
A: Afshin Yazdian Over a payments career lasting two decades, I’ve been involved in numerous transactions. I feel that these M&A deals have helped streamline, consolidate and improve not just the payment companies involved but the wider industry.My experience with M&A also enabled me to meet a wide spectrum of people from the industry. By learning from, and exchanging ideas with, some really smart people – true payment experts – I feel like I have played a small role in driving the industry forward.
Q: Alex FergusonI understand you were hired as a CEO and started your new role amidst the pandemic without meeting a single person. What was the experience like?
A: Afshin Yazdian Yes, when I joined Paysafe at the start of July, the entire company – that’s over 3,400 people across 12 countries – had been working remotely for close to four months. Over that time, they had managed to streamline doing business virtually and with minimal in-person contact. That said, it was certainly a unique experience for me personally.Looking back, it has required extra effort from me, and the U.S. Acquiring team I lead, on multiple fronts. I’ve had to spend more time on an individual basis trying to build relationships (both personal and professional) across the team without having in-person interactions. Also, trying to learn the business without the benefit of walking into an office has been interesting and at times difficult, to say the least.However, my team has been incredible, and we’ve found unique ways to get to know one another, whether through planned ‘virtual’ team-building activities or just more casual conversations on the fly. Video conferencing has certainly helped, since I am able to see what people look like and it makes interacting much easier. In that regard, we also do regular interactive town hall webinars for our whole U.S. team which allows all employees to get to know me, and ask live questions to me and other leaders. I do miss the personal interactions, however.
Q: Alex FergusonWhat are your first impressions of Paysafe and what opportunities do you believe are ahead of the company in the U.S.?
A: Afshin Yazdian The people at Paysafe are absolutely amazing. I have been impressed by how smart, hard-working, and dedicated the team is – from the U.S. and Canada to Europe and all the way to south India.As a global organization, the culture is unique, encompassing a really diverse and large group of payment professionals spread across several continents, multiple disciplines, and supporting an array of payment solutions (from payment processing to a suite of alternative payment products). Yet despite this diversity, everyone is united by this guiding and inclusive ethos of transforming the payments space at a merchant and consumer level. In the U.S. market, Paysafe is in a very advantageous position. We have a large and highly scalable infrastructure for growth both organically and through acquisitions. We are very quickly leveraging our technology to differentiate our go-to-market strategy and to enhance our relationship with our merchant customers and third-party channels. Paysafe has long had a strong presence in the European alternative payments space – from our digital wallet Skrill to our eCash products paysafecard and Paysafecash. The company has been growing in the U.S. Acquiring market for several years, following several acquisitions.The next phase of our evolution is leveraging our technology and alternative payment methods (APMs), and then transforming them for the U.S. market. Rising U.S. consumer demand for APMs like digital wallets and eCash has been further galvanized by the current pandemic, according to our in-house research from back in April.Our diversified offering for merchants and the consumers they serve will help differentiate us from our competitors and fuel our growth.
Q: Alex FergusonPaysafe has historically been strong internationally in higher risk verticals such as online gaming. What are the biggest hurdles in replicating the international success in that vertical to the U.S.?
A: Afshin Yazdian Gaming in the U.S. is expected to be one of the fastest growing sectors over the next few years. Morgan Stanley has forecast that the sports-betting market could be worth $7 to $8bn by 2025.Whether in payment processing or alternative payments, Paysafe’s heritage is in the gaming space – and in Europe in particular, the most mature and developed global market. In contrast, the U.S. space is less developed, with sports betting regulated in close to 20 states after the Supreme Court’s repeal of the federal ban on the vertical in May 2018, and real-money online casino and poker only permitted by a handful of states.Despite the market’s fragmented regulatory landscape, there are many similarities between the U.S. and European gaming spaces. Paysafe’s two-decade experience tailoring its offering to individual European markets’ regulatory and compliance requirements is readily adaptable to American state jurisdictions.
Q: Alex FergusonPaysafe has strong offerings in terms of digital wallets and alternative payment methods with brands such as Skrill and paysafecard. How do you feel these products will help continue Paysafe’s growth in the U.S.
A: Afshin Yazdian As I touched on earlier, we’re seeing strong consumer demand for alternative payment methods (APMs). According to our April 2020 consumer research amidst the pandemic, American uptake of APMs has trended higher, with over a third using a digital wallet monthly and around a fifth using eCash products at least once a month. U.S. merchants able to integrate not just card processing but digital wallets and eCash will be well-positioned for the future of American retail.That’s where Paysafe comes in: We’re able to offer our customers a better overall solution – all on one single platform. Our merchant customers and their consumers want a solution that will allow them to ‘plug into’ alternative payment types as well as card processing, and also provide faster access to their funds. Combining our APMs and payment processing in one platform allows us to address numerous needs of our customers, giving us a major competitive advantage in the market.
Q: Alex FergusonHow has Paysafe been able to support merchants during the COVID-19 crisis in terms of enabling contactless, mobile ordering and other solutions?
A: Afshin Yazdian I have been incredibly proud of how Paysafe and our ISO and Agent sales partners have responded during the ongoing COVID-19 pandemic. The majority of our U.S. merchant partners are small and medium-sized businesses (SMBs), including restaurants, mom-and-pop stores and other smaller retailers. These have been some of the hardest-hit U.S. businesses in the wake of lockdowns and stay-at-home orders.We’ve helped these merchants to pivot and adapt to the new set of circumstances. Our support has been really broad: from upgrading their points of sale (POS) to accept contactless payments, including promotions on hardware to make the switch more cost effective; to setting them up with virtual terminals and advising on making the jump to eCommerce, online ordering, checkouts and delivery. In short, we’ve been enabling merchants to develop a truly omnichannel payments offering.Given the issues around accepting cash, we’ve also made card-processing more cost-effective to merchants with free rates analysis, lower pricing and even discounts on processing fees.For our Agent/ISO partners, we’ve provided strong support as they adapt to the new normal. For those partners with a dedicated focus on the restaurant and retail space, we’ve offered training sessions to allow them to diversify to serve other verticals such as field services and cleaning services. Essentially, we’ve provided our partners with a toolkit on how to reposition their businesses to remain profitable during these changing times.Whether it’s our partners or merchants, we’ve helped thousands of businesses transform at an incredible speed to stay afloat and to service their own customers. Our technology and our people have really stepped-up to make a difference at a very precarious time for Main Street America – and that’s something my whole team should be very proud of. During an existential crisis for U.S. SMBs, we played a part in helping them not only survive, but also begin to thrive again.
Q: Alex FergusonWhat are the payments trends you have seen during the pandemic? Which of these trends (if any) do you think will last looking five years down the line?
A: Afshin Yazdian I think that smaller merchants have started to appreciate that payment technology is now a necessity they need to leverage to the fullest to organize, operate and ultimately optimize their businesses and revenue. COVID-19 has served as a catalyst for a rapid shift away from cash to card payments, and also galvanized the rise of contactless, which has long lagged in the U.S. market, and, to a lesser extent, mobile wallets such as Apple Pay and Google Pay.Lockdowns and stay-at-home orders have also meant that in-store merchants have diversified their offerings online, with card-not-present checkouts for orders and integrated delivery apps. In essence, it’s also resulted in card-present SMBs embracing developing an omnichannel payments offering – enhancing their in-store payments but also moving online and leveraging mobile payments. This broader shift has several advantages for both merchants and their customers. It allows merchants to offer consumers a more seamless customer experience. For example, restaurants are able to facilitate transactions through online ordering and delivery, with card information stored for easy repeat purchases. The digital space also provides a new way for merchants to engage with their customers – emailed promotions and offers as well as coupons tied to the frequency of their payments with the merchant.Regardless of the COVID situation, I think these trends will endure and continue to grow over the next five years. The pandemic may be serving as a catalyst, but merchants will see the commercial benefits of diversifying their businesses to the omnichannel model by adding online and mobile channels into the mix alongside in-store or in-person payments. Likewise, COVID may have driven consumers to use contactless in store and card-not-present eCommerce, but the speed and convenience of the payments experience will ensure usage becomes entrenched.
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