In an exclusive interview with CanadianSME Small Business Magazine, Phil Levy, CEO of Exact Payments, offers a deep dive into his illustrious career in the payments industry, spanning over two decades across major companies like Silicon Valley Bank, Fiserv, and FIS. Phil’s journey has been marked by a steadfast focus on innovation, particularly in the realm of digital wallets, where his work has set the stage for transformative changes in how consumers and businesses handle transactions. With a rich background that includes leading product strategy and development, Phil brings a unique perspective to the adoption and growth of digital wallet technologies. He discusses the critical role of cloud computing in this evolution, emphasizing how it enables faster, more secure, and more convenient payment methods accessible from any device. Through his leadership at Exact Payments, Phil is dedicated to advancing the digital payments landscape, ensuring businesses and consumers alike benefit from frictionless, secure, and globally accessible payment solutions.
Phil is a payments industry insider with more than 20 years of experience in senior and executive leadership roles. Most recently, Phil was Managing Director of Payments at Silicon Valley Bank, where he was responsible for building and managing the merchant services business serving the company’s portfolio of fintech, eCommerce, and life sciences companies. Prior to SVB, Phil led product strategy, product development, and business development for industry leaders, including Fiserv/First Data, FIS, and eFunds Corporation.
Phil holds a bachelor’s degree in Government & Law from Lafayette College and an MBA in Marketing and Entrepreneurship from the University of Rochester.
Can you share insights into your journey through the payments industry from Silicon Valley Bank to leading Exact Payments, and how it has prepared you for the current digital wallet innovations?
Throughout my tenure in the Fintech sector, I’ve worked with top industry players such as FIS, Fiserv, and Silicon Valley Bank. These companies share a focus on developing systems that function at a large scale to serve some of the world’s largest and most innovative merchants, financial institutions, and software platforms. From authorization switches to boarding systems and payment gateways, I’ve been involved with large-scale projects, sometimes involving hundreds of developers at a time. When done well, I’ve seen first-hand how technology solutions really do lead to great outcomes for customers.
These experiences are at the core of our vision for Exact Payments, which is to build the easiest-to-integrate, most scalable, and highest-reliability payment solutions available in the industry.
What recent trends have significantly influenced the adoption of digital wallets to near critical mass compared to their initial introduction?
Recent trends such as the proliferation of smartphones, the rise of contactless payments, increased security measures, and the convenience of digital wallets have significantly accelerated their adoption. But one crucial element contributing to all of these technologies, including the adoption of digital wallets, is the introduction of cloud computing at scale.
Before now, digital wallets were limited to a specific device or a certain card brand. Digital wallets based on the cloud are a different story. Payment information is securely stored in a central virtual repository, allowing any device capable of running an app to act as a platform for the digital wallet. Examples include smartwatches, smartphones, and tablets.
The cloud’s processing speeds and capacity for handling digital workloads far exceed those of traditional physical servers. This capability allows transactions made through digital wallets to be completed much faster, even on a large scale.
The cloud’s flexibility plays a significant role in the growth of contactless payments, with digital wallets being a key driver. By enabling payments through everyday devices, individuals no longer need to carry extra cash or cards, resulting in a safer and more convenient experience. Additional security features such as biometric authentication can prevent misuse, even in cases of loss or theft.
Today, cloud technology serves as a facilitator for digital wallet technology, offering built-in security, on-demand scalability, and the ability to handle intensive processing tasks.
In the context of digital wallets, could you explain the importance of frictionless payments and how they are changing consumer and business transactions?
I define friction in payments as any obstacle that would cause a buyer to take additional action or think twice about the purchase they are making, such as a redirect to another payment site or verifying identity through a PIN code. Frictionless payments refer to seamless and convenient payment experiences that minimize or eliminate the need for manual intervention or steps. In the context of digital wallets, this means that transactions can be completed quickly, easily, and securely.
Frictionless payments are transforming consumer and business transactions in several ways:
Convenience: Digital wallets allow users to store their payment information securely and access it easily when making purchases. This eliminates the need to carry physical cards or cash and reduces the time spent at the checkout.
Speed: By streamlining the payment process, frictionless payments enable transactions to be completed much faster. This is particularly important for businesses processing large volumes of transactions, as it can lead to increased efficiency and customer satisfaction.
Security: Digital wallets often incorporate advanced security features, such as tokenization and biometric authentication, which help protect against fraud and unauthorized access. This provides peace of mind to both consumers and businesses.
Personalization: Digital wallets can store valuable customer data, such as purchase history and preferences, which can be used to offer personalized offers and recommendations. This can lead to increased customer loyalty and higher sales for businesses.
Globalization: Frictionless payments enable businesses to reach customers around the world without the limitations of traditional payment methods. This opens up new markets and revenue streams for businesses of all sizes.
Overall, digital wallet payments are revolutionizing the way consumers and businesses transact, offering convenience, speed, security, and personalization like never before.
What are the key benefits of integrating digital wallet solutions for online and B2B businesses, based on your experience with Exact Payments’ services?
Improved User Experience: Digital wallets streamline the payment process, reducing the number of steps required for customers to complete a purchase (such as entering credit card details each month for a SaaS subscription). Streamlining the customer experience can lead to higher sales and increased customer satisfaction.
Enhanced Security: Digital wallets use advanced security measures, such as tokenization and biometric authentication, to protect sensitive payment information. This can help reduce the risk of fraud and unauthorized transactions.
Faster Transactions: With digital wallets, payments can be processed much faster compared to traditional payment methods. This can help businesses improve cash flow and reduce the time spent on manual payment processing.
Reduced Costs: Digital wallets can help businesses reduce the costs associated with handling cash and processing paper checks. This can lead to cost savings and increased efficiency.
Access to Global Markets: Digital wallets enable businesses to accept payments from customers around the world, opening up new markets and revenue opportunities.
Integration with Accounting Systems: Many payment providers of digital wallet solutions have the capability to integrate with accounting systems, making it easier for businesses to track and manage their finances, including cash flow and reconciliation.
Data Insights: Digital wallets can provide businesses with valuable data insights, such as customer purchasing behavior and preferences. This information can be used to improve marketing strategies and customer engagement.
Overall, integrating digital wallet solutions can help online and B2B businesses improve efficiency, security, and customer experience, ultimately leading to increased revenue and growth.
How are digital wallets evolving to address security concerns and prevent fraud, especially in light of Exact Payments’ upcoming digital wallet launch?
One of the key benefits of digital wallets is security. In fact, I would argue they are more secure than carrying cash or cards. We plan to launch Click to Pay this spring along with our existing Apple Pay and Google Pay offerings, and between the built-in security digital wallets offer plus the secure payments ecosystem Exact has built, I am confident digital wallets will help reduce fraud.
A main security feature of digital wallets is tokenization to replace sensitive payment information with a unique token. Tokens have a much more limited lifespan as compared to a traditional credit card with a three to five-year active period. Since the characters associated with the payment data are always changing, it is nearly impossible for fraudsters to get the actual payment data. What’s more, the token is meaningless outside of the specific transaction, making it much more secure than traditional payment methods.
Exact has taken tokenization a step further with the introduction of network tokenization, an advanced security protocol that increases authorization rates and the speed of transactions. Network tokens are issued from trusted card brands like Visa, Mastercard, and American Express. This technology limits where card information is stored, giving criminals less access out of the gate.
Additionally, many digital wallets now offer biometric authentication, such as fingerprint or facial recognition, to verify the user’s identity. Some digital wallets also support multi-factor authentication, requiring users to provide more than one form of verification to access their accounts. Each of these protocols adds an extra layer of security and helps prevent unauthorized access.
Lastly, digital wallets are also secured using the device’s security features, such as encryption and secure storage, to protect payment information. This helps prevent unauthorized access even if the device is lost or stolen.
Overall, digital wallets offer convenient, secure, and efficient ways to complete transactions and are growing fast. As I look to the future of payments, I see digital wallets eclipsing traditional payment methods and look forward to offering a range of digital wallet options for our clients.
