Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: You're listening to Bloomberg BusinessWeek with Carol Masser and Tim
Speaker 2: Stenoveek on Bloomberg Radio.
Speaker 1: The season is underway. The global e commerce and payments
Speaker 1: platform company ACI Worldwide says friendly fraud is expected to
Speaker 1: increase twenty five percent between Thanksgiving and Cyber Monday. That's
Speaker 1: according to an analysis of billions of transactions of global
Speaker 1: e commerce businesses. That's what they do. They see a
Speaker 1: lot titting us with more is and kind of on
Speaker 1: that story as well as their business. In our latest
Speaker 1: installment of CFO Briefing is Robert Leebrock. He is CFO
Speaker 1: of the more than four point eight billion dollar market
Speaker 1: cap company ACI Worldwide, the stock by the way down
Speaker 1: about nine percent year today, and also with us here
Speaker 1: in studio as Nina Trentman. She's Bloomberg News Senior editor.
Speaker 1: She writes the CFO Briefing newsletter, which you can subscribe
Speaker 1: to at Bloomberg dot com slash CFO Briefing. A new
Speaker 1: one comes out every Sunday. Bobby, welcome, Welcome, Nice to
Speaker 1: have you here with all of us. I'm not sure
Speaker 1: everybody's familiar with what you do share with us a
Speaker 1: bit on what the company does, who are your customers,
Speaker 1: the type of categories, so that our investing audience has
Speaker 1: a good picture of what your business is all about.
Speaker 3: Yeah, that'd be great, and thank you for having me, Carol.
Speaker 3: I think, as you described earlier, we're right at a
Speaker 3: peak season for our company. We're right in the middle
Speaker 3: of all of the payments that run through the economy,
Speaker 3: not just here in the US, but around the world.
Speaker 3: And as you think about what ACI does, it's the
Speaker 3: infrastructure of payments. You know, we know around computing, there's cloud,
Speaker 3: there's data centers, there's the edge around payments. We are
Speaker 3: the infrastructure that does that across all the banks, all
Speaker 3: top ten banks, sixty of the top one hundred banks.
Speaker 3: Also across three thousand customers here in the US, they
Speaker 3: need bill pay technologies. If you paid your US tax bill,
Speaker 3: you've probably used our platform your insurance bill. And then
Speaker 3: a big you know this weekend actually is when you
Speaker 3: talk about friendly fraud and uptick. We're seeing there. We
Speaker 3: service eighty thousand merchants globally with our technology around payments.
Speaker 3: There and as you step back, you know what where
Speaker 3: ACI really comes in is a mission critical layer of
Speaker 3: software and as a service technology that allows them to scale,
Speaker 3: provide the reliability, the fraud detection that you need across
Speaker 3: those As you think about what we can do across
Speaker 3: those platforms, it is it is perfect to come in,
Speaker 3: you know, on the Wednesday here before Thanksgiving here in
Speaker 3: the US. Like I said, it's a big peak season.
Speaker 3: As we look at the transactions at this time of
Speaker 3: the year, you know, they were up more than twenty
Speaker 3: five percent last year. We're expecting that to happen again
Speaker 3: this year. Through our platform. There's lots of fraud that
Speaker 3: can come along with that. It's one of the areas
Speaker 3: we're infusing AI into that for these merchant providers. As
Speaker 3: you think across ACI, you mentioned almost five billion dollar
Speaker 3: market cap, almost two billion in revenue. You know that
Speaker 3: we have globally with a very healthy performance underneath about
Speaker 3: five hundred million in aibita. You know, I joined just
Speaker 3: under six months ago, so you know, relatively new to
Speaker 3: the team here and think about what we do. It's
Speaker 3: really a big reason on why I joined. I was
Speaker 3: excited to come in the middle of a company that's
Speaker 3: mission critical to everything we do around payments and the
Speaker 3: ecosystem and the economy. But the other equally important part
Speaker 3: of why I was excited to come was we're a
Speaker 3: fifty year old company that's rapidly transforming. About two years
Speaker 3: ago we had a new CEO come in Tom Moresop,
Speaker 3: and he's really jolted the company. Increased our growth about
Speaker 3: two actra grow ten percent last year, run track to
Speaker 3: nine to ten percent growth this year. And as you
Speaker 3: look at that, the other big jolt was innovation. We
Speaker 3: have a new platform that we're bringing out around cloud Native.
Speaker 3: It's our ACI Kinetic platform. And those were two big
Speaker 3: things that I'm excited to join this team and the
Speaker 3: transformation run.
Speaker 4: Thanks Bobby for for joining us here. Nina here, just
Speaker 4: wanted to actually follow up on the data that you
Speaker 4: have from your businesusiness. We earlier talked here on the
Speaker 4: program about the key shaped economy and the divergence between
Speaker 4: sort of affluent spenders in the US and those with
Speaker 4: lower incomes. Is that something that's reflected in your numbers,
Speaker 4: and what are the trends telling you for this holiday season?
Speaker 3: Yeah? I think good question and good to see you again, Nina.
Speaker 3: I think the underneath of that and let me provide
Speaker 3: the global scale of ACI. We operate in about ninety
Speaker 3: countries globally, and our banking business is actually about seventy
Speaker 3: five percent outside the US. And as you think on
Speaker 3: how that's developed, a lot of it has to do
Speaker 3: with Nina. How we're servicing economies that are either undercredited
Speaker 3: or under banked and giving them the ability to do
Speaker 3: digital payments through a debit transaction or other types of
Speaker 3: electronic payments is really important to our culture and our mission.
Speaker 3: So as we go do that, we're seeing good demand
Speaker 3: across Asia, Latin America for these different payment schemes and
Speaker 3: real time payments provide to those those folks. As you
Speaker 3: think about you know this this season I mentioned, you know,
Speaker 3: we're this is a peak season. We think the shift
Speaker 3: more and more towards digital payments is continuing to happen.
Speaker 3: We see that through our platform. When we last talk,
Speaker 3: I mentioned on a year to date basis, we're going
Speaker 3: twelve percent, so a really nice demand and that's across
Speaker 3: both of our businesses here in the US or internationally
Speaker 3: as well as you look across our payment software business.
Speaker 4: Yeah, just curious, Actually do you see this growth in
Speaker 4: and buy now pay later transactions that we've seen across
Speaker 4: platforms is also that's showing in your business.
Speaker 3: Yeah, and I will say, I mean our business is
Speaker 3: largely agnostic to how you want to pay, but that
Speaker 3: is a good reason why to use a digital electronic
Speaker 3: payment versus let's say cash, and the ability to do that.
Speaker 3: It's one of the reasons we're taking good market share
Speaker 3: within our bill pay business. This is a business that
Speaker 3: you know, we've we've gotten it from lower to mid
Speaker 3: single up to market levels at growing twelve percent. And
Speaker 3: to the point of your underlying up your question there,
Speaker 3: that is providing more payment types is why a lot
Speaker 3: of customers in this space are choosing to no longer
Speaker 3: write their own bill pay technology and their app or
Speaker 3: their website, but come to a leader like ACI to
Speaker 3: do that for them. They can give them more options
Speaker 3: around pay later, use credit, use other forms of payments
Speaker 3: as well.
Speaker 4: Well.
Speaker 2: On that, Bobby, we actually had Tom Morse up on
Speaker 2: Bloomberg Crypto just about five weeks ago, back in the
Speaker 2: middle of October. He was here in the city to
Speaker 2: talk a little bit about stable coins, speaking of different
Speaker 2: types of payments, and I'm wondering how big of a
Speaker 2: business at this point, you see that getting use of
Speaker 2: stable coins, especially for cross border transactions. Do you see
Speaker 2: it sticking?
Speaker 3: Yeah? I think I remember. I think he said that,
Speaker 3: you know, you and he were talking about the death
Speaker 3: of cash is greatly exact rated right when he saw it.
Speaker 3: And admittedly, what we were trying to you know, lean
Speaker 3: into there was we don't see you know, any one
Speaker 3: payment type really going away, and I think that's the
Speaker 3: reason why there's such a need. You know, as stable
Speaker 3: coin sees more adoption continues to ramp, you know, I
Speaker 3: will know as you look underneath of that, it's it's
Speaker 3: definitely an emerging payment type. Provides you know, faster, cheaper,
Speaker 3: more transparent ways to transfer money, particularly cross borders like
Speaker 3: you mentioned, but it adds a ton of complexity for
Speaker 3: our customers to add this as an additional payment type.
Speaker 3: It's one of the core reasons when we went out
Speaker 3: and surveyed two hundred customers about two years ago, we
Speaker 3: asked them, you know, where should we invest. You know,
Speaker 3: it was a very customer oriented product, market fit for
Speaker 3: our new platform ACI Kinetic, and this is a payment's hub.
Speaker 3: It doesn't bias one payment type one rail. It can
Speaker 3: lean across all these payment tups. It helps you orchestrate
Speaker 3: them because the complexity of adopting stable coin. You see
Speaker 3: a lot of banking announcements on either their own stable
Speaker 3: coin or their ability for tokenized deposits. It's great optional
Speaker 3: and in ACI, we love the idea of giving consumers
Speaker 3: and more optionality and choice and flexibility, but that provides
Speaker 3: a lot of complexity for our customers, which is where
Speaker 3: they need our help and is right in our sweet spot.
Speaker 4: Just wondering actually in terms of stable coin payments, is
Speaker 4: that consumers using those on your platform? Is it business
Speaker 4: to business? What is that looking like?
Speaker 3: Yeah? I think so. As you think of our multiple
Speaker 3: platforms within our bill pay, our merchant business, we've provided
Speaker 3: the option ouity. We had a strategic partnership with BitPay
Speaker 3: that we announced last quarter that unlocks the ability to
Speaker 3: use those across those platforms. If you think of our
Speaker 3: critical banking business, that's really a mission critical layer that
Speaker 3: banking banks are using around the world that those volumes.
Speaker 3: We have the capability there. You know, we have the
Speaker 3: payment infrastructure, we support stable coins, tokenized deposits of the
Speaker 3: new payment type, the interroperability, most of the volumes I
Speaker 3: see their need are within the crypto universe themselves. It's
Speaker 3: going from a highly volatile cryptocurrency and if you want
Speaker 3: to get the stability to move that, you'll see a
Speaker 3: transaction of going from you know, a bitcoin over to
Speaker 3: a stable coin. There, we don't see a lot of
Speaker 3: transactions that you know, you know, compared to the you know,
Speaker 3: we do billions of transactions every single day with trillions
Speaker 3: of dollars attached to those transactions. And within those there's
Speaker 3: still more across the traditional payment types that we see
Speaker 3: within our banking data.
Speaker 1: Hey, you know we kicked off, Bobby, our introduction to
Speaker 1: you talking about the so called friendly fraud expected this
Speaker 1: holiday shopping season in particular, we're looking at the weekend
Speaker 1: and all the way through. How much risk is there
Speaker 1: from this and especially when compute customers dispute transactions following
Speaker 1: a purchase.
Speaker 3: Yeah, I think you know. The friendly fraud for you
Speaker 3: know folks, this is a new term to This is
Speaker 3: things like wardrobing, buying something, wearing it for a long time,
Speaker 3: returning it or you know, stolen goods that you try
Speaker 3: to return to the provider. And there's they're getting more
Speaker 3: and more sophisticated and admitally is yeah, this is growing
Speaker 3: upwards of twenty five percent. And if you think of
Speaker 3: the average return, it was about one hundred and fifty dollars.
Speaker 3: If I remember last year, it's up to about two
Speaker 3: hundred dollars the average transaction that's going through these types
Speaker 3: of friendly fraud. We have a platform, so I talked
Speaker 3: about servicing eighty thousand merchant globally. You know, through our
Speaker 3: product and our software there we have payment intelligence and
Speaker 3: we can get up to ninety eight percent prevention within
Speaker 3: that space. So it's really a big value add there.
Speaker 3: And we talk about you know, I'm a I'm a
Speaker 3: believer in you know, the use cases around AI, and
Speaker 3: this is one of them that I love talking when
Speaker 3: I'm meeting with investors because it shows them a real
Speaker 3: life example around where our customers are seeing an ROI
Speaker 3: on reducing this friendly fraud with the capabilities we have
Speaker 3: on our.
Speaker 1: Platform, maybe we shall all take an ethics lesson. I
Speaker 1: don't know, I hadn't heard it.
Speaker 2: I hadn't heard friendly fraud before.
Speaker 1: Right, It's just, oh my gosh.
Speaker 2: You know it when you see.
Speaker 1: It, you know it apparently when you see it Hey, listen, Bobby,
Speaker 1: thank you so much. We really appreciate it. Happy Thanksgiving
Speaker 1: Bobby Lee Brock. He is CFO of ACI world Wide.
Speaker 1: Nina Trentman, thank you always. Happy Holidays, Bloomberg News senior editor.
Speaker 1: She writes the CFO Briefing newsletter. You can find it
Speaker 1: at Bloomberg dot com slash CFO Briefing and for more
Speaker 1: Bloomberg coverage of CFOs. Be sure to check out the
Speaker 1: latest episode of the Chief Future Officers series. It features
Speaker 1: the CFO of Standard Chartered Bank Diego Da Georgie on
Speaker 1: his major role in the bank's expansion into digital assets
Speaker 1: and how AI is changing the job of CFO. You
Speaker 1: can watch Chief Future Officer right now I'm Bloomberg dot
Speaker 1: Com and of course, on YouTube.