December 2, 2025 • 24 mins
Most software teams still think of payments as a chore. We take you inside the playbook that turns it into a growth engine. I sits down with NMI CTO Phillip Goericke to unpack how embedded payments evolved from a basic checkout to a full-stack platform that handles onboarding, underwriting, payouts, analytics, and even embedded finance. The conversation is straight talk on what actually works when you’re shipping fast and scaling globally.
We dig into the architectural choices that matter: start with a no-code drop-in to activate revenue quickly, then progress to low-code SDKs and finally full APIs when you need deep control. Phillip shares where platforms stall - manual KYC, fragmented global rules, and data blind spots and how a modular approach fixes these without ripping out your stack. You’ll hear how compliance-as-a-service, network tokenization, and adaptive 3D Secure can raise approval rates, reduce fraud, and simplify audits while keeping the checkout experience seamless.
Looking ahead, we explore why identity, compliance, and data are the foundation for embedded finance. Philip outlines NMI’s unified experience that brings payments, onboarding, insights, and new services like business capital into one place. We also tackle AI with clear eyes: use it to augment decisioning and anomaly detection, but wrap it with deterministic controls so money-critical outcomes are consistently right. The key takeaway is a mindset shift: stop treating payments as a feature and start using it as a strategic lever for revenue, retention, and product velocity.
If you’re building software with transactions anywhere in the flow, this is your blueprint for turning payments into a competitive moat. Subscribe for more deep dives, share with a teammate who owns monetization, and leave a review to tell us what topic you want next.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:01):
Welcome to the Signal, powered by the Leaders
in Payments Podcast, where weare cutting through the noise to
reveal what truly matters inpayments and fintech.
Hello, everyone, and welcome tothe Leaders in Payments Podcast.
I'm your host, Greg Myers, andtoday's special guest is Philip
Gorick, the Chief TechnologyOfficer at NMI.
So, Philip, thank you for beinghere and welcome to the show.
SPEAKER_01 (00:21):
Hi, thank you.
Really happy to be joining youtoday.
SPEAKER_00 (00:24):
This episode is part of our embedded payments theme,
one of several topics we'reexploring in the Signal, where
we cut through the noise anduncover what truly matters in
payments in FinTech.
Embedded payments have evolvedfar beyond the simple pay now
button.
Today they're reshaping howsoftware companies operate,
driving automation, efficiency,and new revenue.
(00:45):
This episode unpacks whereembedded payments began, where
they are now, and what's next.
So, Philip, before we dive intothe meat of the conversation,
can you give us a quick snapshotof your personal background,
maybe where you grew up, whereyou call home today, a few
things like that?
SPEAKER_01 (00:59):
I moved a lot growing up.
Yeah, that that certainly shapeda bit of my like personality, I
think.
But it was mostly in and oraround Austin, Texas area.
But since then, really rightafter high school, I moved up to
the DFW area.
So I've been I've been up herearound, you know, 20 plus years.
Today I live in South Lake, sogo dragons.
Let's go.
Uh Southflake, Carol.
SPEAKER_00 (01:20):
Awesome.
So as you might remember, I'mI'm in DFW area too, up in
Prosper.
So we have that in common forsure.
So if you don't mind, can youwalk us through your
professional journey and how yougot to NMI?
SPEAKER_01 (01:31):
My background's kind of always been at the
intersection of technology andbusiness.
I wouldn't say I planned it thatway, but that's just kind of how
it's always worked out.
And I've spent my careerbuilding and scaling software
platforms.
And I began that first as asoftware engineer writing code,
designing systems andapplications, and then sort of
transitioned to leading productand technology teams.
(01:53):
That journey's really led me towhere I am today at NMI, where I
serve as CTO.
And my mission is to make thecomplex world of payments, and
boy, is it complex, uh, makethat world feel invisible and
intuitive so that our partnersand their end users can have a
great seamless experience.
SPEAKER_00 (02:08):
Well, if you don't mind at a high level, can you
tell us what NMI does?
SPEAKER_01 (02:12):
Yeah.
So NMI is a payments technologycompany, and we're powering
payments behind the scenes forSaaS platforms, ISO payment
providers, and the like.
And we enable software companiesto embed payments deeply into
their products, not just as atransaction layer, but as a
strategic growth engine.
And we have a pretty significantscale.
We're powering over$400 billionin payment volume.
(02:35):
And we we focused on making iteasier for software companies to
launch and scale and monetizepayments.
SPEAKER_00 (02:42):
Okay, great.
So just to level set for thisconversation, can you give us
your high-level definition ofwhat embedded payments means and
why it's so important tosoftware companies and ISVs?
Yeah, good question.
SPEAKER_01 (02:54):
Embedded payments means that the payment
experience is woven directlyinto the software workflow, into
that system.
It's not a handoff where yourcustomer is using a separate
terminal or a separate websiteto go and do payments.
The customer ever leaves yourapplication.
For software companies, that'scritical because it drives
automation, it's improving andstreamlining user experiences
(03:18):
and unlocks entirely new revenuemodels.
So instead of just facilitatingpayments as like a person in the
middle, if you will, they becomea payment provider.
And you're able to captureresidual revenue and strengthen
your customer attention.
Gives you a lot of control overthe experience.
SPEAKER_00 (03:33):
Okay, great.
Makes a lot of sense.
So let's dive in and talk aboutembedded payments from a
technical or productperspective, which I know you're
very passionate about.
So, in your view, what was theminimal viable embedded payments
model when NMI first started andhow has that model evolved over
time?
SPEAKER_01 (03:52):
Gosh, the NMI has been around a long time, well
before I I've been here, youknow, 25 plus years.
But if I were to say, like boilit down, like back in the day,
I'd say the MVP was simplecheckout, you know, transaction
enablement.
But fast forward to today, andit's a fully integrated life
cycle of payments.
So when embedded paymentsconcept sort of first emerged,
(04:14):
that MVP, I think, was justbeing able to take a card on
file inside your application,which was great, right?
A very simple checkoutexperience.
Today, though, it's it's reallydelivering that full financial
infrastructure from modernmerchant onboarding, instant
underwriting, automation ofpayout, real-time analytics,
embedded financial services, allof that without ever leaving.
(04:36):
So payments has really gone frombeing a feature to being this
foundation, and and there's justso much more expected as table
stakes functionality today thanit used to be.
SPEAKER_00 (04:47):
Yeah, and I think that's an important point that
some people I think kind of skipover as they think about it's
the payment, but there's morethan just the payment, right?
You have, like you mentioned,you have the onboarding and the
compliance and you know, all ofthose things that that have to
happen as well.
And I think, you know, if if Ican put words in your mouth, NMI
has sort of built all of thosetools that enable these software
(05:09):
companies to be able to do it inone place.
SPEAKER_01 (05:11):
Yeah, you got it.
I mean, that's that's reallywhat makes us special, is that
we've got everything you needfrom an entire payments
lifecycle, start to finish, signup to payout.
And it's all bundled together inan easily consumable way.
SPEAKER_00 (05:24):
Well, as these software companies or platforms
that are using embeddedpayments, as they start to
scale, and that could be scalein volume, that could be scale
by going to other geographies.
You know, what are some of thebottlenecks or failure points
that you've encountered?
SPEAKER_01 (05:39):
Payments is a complicated ecosystem and it
does, it spans so manydisciplines and things to solve
for.
But I think one of the first bigbottlenecks that you'll you'll
see is you know, commonly in theonboarding and KYC delays,
right?
And as your platform scales, thewhat you do today, maybe manual
underwriting and and your manualcompliance, they they often just
(06:00):
don't scale with them.
And that can really slow thingsdown and make for a pretty
frustrating experience, both foryou and your customers.
I think another one that I thinkabout is just supporting that
global and even regionalexpansion.
As your business grows and youyou're looking to support
multi-cult multi-regions,multi-u-countries, managing
local payment methods andcompliance and global
(06:23):
regulations, and they are youknow they're different globally
and regionally.
California has different rulesin Oklahoma, of course, cross
borders, payout requirements,those get tricky and complex
really fast.
And then lastly, I'd say manyplatforms underestimate the data
aspect, the data side of things.
Because if you can't see and acton payments data, you are
(06:45):
leaving growth opportunities onthe table.
And you're gonna struggle toidentify and manage risk uh on a
on a go-forward basis.
SPEAKER_00 (06:53):
Okay.
And some of your clients willwant deeper customization while
others kind of want thatplug-and-play simplicity.
So, how are you, you know, howdo you architect for both
extremes without causing like alot of complexity?
SPEAKER_01 (07:08):
This is one you got to be very thoughtful about.
Um, I think I I've I'm patourselves on the back here.
I think we've we've done apretty good job here where it's
not so easy, but I think that itcomes down to, from a design
perspective, you've got todesign for optionality, not
complexity.
And may that sound simple,right?
And it's easy to say, but youknow, we approach this with a
modular architecture.
(07:29):
So if a partner wants to be upand running in days, they just
need to get up and going, theycan drop in a pre-built no-code
component that we've got and beoff to the races.
But if they later need a deepercontrol, or they're they're
already pretty sophisticated inpayments and they want deep
control out of out of the boxand they're willing to take that
time, you know, that overwhether that be things like the
(07:51):
onboarding workflows or the userexperience or the data, they can
build on our low-code uh SDKsolutions or even have full
control with our API.
So we we think of it as like nocode, low code, and full control
with API.
And so we often find that ourpartners, in many cases, they
choose to get started quicklywith one of our no-code
solutions.
And then over time, as theyfigure out what they need to be
(08:13):
doing and what's important forthem, they build out other
functionality with deepercontrol that's tailored to their
needs.
So I think the key is thateither approach is completely
fine and correct.
It just depends on where you arein your journey.
And critically to that, theseall run on the same platform.
So you don't have to compromiseflexibility for simplicity.
(08:34):
And and even maybe moreimportantly, is that you're in
control of that decision andtiming.
SPEAKER_00 (08:40):
So do you see these software companies as having, I
guess maybe it's maybe it's thesize, maybe it's not, but sort
of they're early in theirdevelopment, they go with the
real simple thing.
And then as they grow, they havemaybe they bring on a payments
person or consultant orsomething, and then they kind of
go deeper.
Is that kind of what you see?
SPEAKER_01 (09:00):
Yeah, 100% we see that.
We see in kind of all shapes andsizes from I'm a small company
and I don't have developersreally to get going.
You know, we don't our we're wedon't our business is a startup,
right?
Like we maybe we don't even haverevenue yet.
And the idea that we wouldinvest developer cycles to go
and build out some beautiful,you know, sophisticated workflow
going to our APIs directlydoesn't make sense for them.
(09:21):
And so they go with the drop-in,no code solution.
And then we see the big youknow, enterprise kind of
customers that they do have theresources to invest in that.
So it's uh it's really no onesize fits all.
You also find really maturecompanies that just want to get
going very quickly while theybuild out their full control
experience.
So it's it's it we see it kindof all over the place.
(09:41):
But yes, you're exactly right.
It kind of depends on where theyare.
SPEAKER_00 (09:44):
And do you find that they typically have the
technical resources to handlethe integration?
SPEAKER_01 (09:49):
They often are very quickly able to get up and going
through our SDKs and that we'vegot great documentation and you
know, our developer resources,plus our support.
You know, we we have gotintegration support and hand we
hold your hand if you need,right?
But we often find that ourpartners can, in many cases, get
up and going pretty easily ontheir own.
And again, when when you get tothe more full control, that just
(10:10):
takes a bit more time and aninvestment to do a rich API full
you designed the full experienceend to end yourself.
That just takes more timebecause you're doing more.
SPEAKER_00 (10:20):
Well, let's talk about the business side of
embedded payments for a minute.
So, embedded payments arebecoming table stakes for some
of the bigger software companiesand ISVs.
So, how does NMI differentiateitself in this kind of crowded
space?
And what are the motes thatyou've built around your
business from a differentiationperspective?
SPEAKER_01 (10:38):
I like this question.
I think one of our biggest moatsis that we've solved a ton of
really difficult problems acrossthe spectrum of payments.
And we've packaged it all upinto a truly modular platform,
sort of that what you need whenyou need it approach.
And as an example, our partnercan start with just the payment
processing use case, a no-code,low-code solution like we just
(10:59):
talked about, and they caneasily add services like
merchant acquiring or fraudprevention or residuals
management or tokenization,whatever, financing as they're
growing.
And when you combine that withEnemy Scale, which is a highly
reliable and available platform,along with deep compliance
(11:20):
expertise and our world-classsupport that has this partner
first philosophy, we're not justa vendor.
We're an extension of yourbusiness, we're your partner in
the truest sense.
And that's that's prettyuncommon.
I think that's a pretty, prettygreat thing that differentiates
us in the in this crowded space.
SPEAKER_00 (11:38):
So, in the sales environment, when you're selling
embedded payments to softwarecompanies versus you know
traditional merchants, what arethe biggest friction points or
objections that you hear and howdo you address those?
SPEAKER_01 (11:50):
You know, I'd say one of the more consistent
sources of feedback we hear areconcerns about sign-up,
boarding, and integrationcomplexity.
Because it is, it is, we'veabstracted a lot of stuff behind
the scenes.
And you know, we're we're alwaysinvesting in how to make that
better.
And we've invested heavily intools and SDKs and documentation
to kind of get as close to thatplug and play as possible.
(12:13):
But we're constantly investingin improving these experiences.
I mean, heck, the the main themeof one of our three strategic
imperatives is about this.
So we're taking it veryseriously and releasing several
enhancements so far this yearalready.
And I'm really excited aboutreleasing even more
transformational partner andmerchant experience improvements
(12:34):
next year.
There's a lot that we've got onthere.
I'd say risk, Greg, is uh isanother concern.
We handled so much of the heavylifting on underwriting and
compliance and monitoring.
And we spent a lot of timehelping partners model and
understand the revenue upside,the value prop of it all.
So they see payments as a growthdriver, not a distraction.
(12:55):
Does that make sense?
SPEAKER_00 (12:56):
Yeah, absolutely.
And it's you know, it'ssomething that I hear that
software companies have, Iguess, matured to understand
better where to find therevenue, what are the things
they can do to enhance therevenue.
And then a lot of them, it'sabout the client experience,
right?
What are they, what's theexperience they're allowing and
you know, who takes on the riskand who takes on the different
(13:18):
aspects of it.
So I it sounds like the withNMI's kind of modular platform,
they can plug in what they needand when they need it.
So when you're thinking aboutdesigning and positioning that
modularity that we've beentalking about, how do you do it
so that partners can takeadvantage of it, you know,
without feeling, hey, I need tobuild something, you know, this
(13:38):
from scratch, and then there'sthis other other module from
scratch.
And I mean, it's probably a verytechnical answer, but I'm
curious, you know, how do you dothat so that they don't feel
like that modularity becomessomething they're rebuilding
every time from scratch?
SPEAKER_01 (13:51):
Yeah, you know, I I think of modularity a bit like
building blocks, like Legos, ifyou will.
And you don't have to rip outyour existing tech or commit to
some significant massivemigration.
You start what solves yourimmediate problem, and that's
that's the modularity aspect ofit.
And, you know, maybe that'smerchant boarding or maybe it's
payment processing.
I don't know.
It depends on where you are.
(14:11):
You expand as your strategyevolves.
So that flexibility is a bigreason partners choose NMI over
all or nothing monoliths.
You know, there's theseplatforms where it's like you've
got to use everything or nothingat all.
And I like to think that we'rean all-in-one platform, but with
optionality to meet you whereyou are.
And again, you can chooseeverything we've got or just one
(14:33):
thing or some combination.
There's an infinite number ofpermutations that you could do.
Well, not infinite, but asignificant amount of amount of
ways you can combine things.
It helps with that modularityand getting to what you need to
do without having to rebuildeverything from scratch.
SPEAKER_00 (14:46):
Well, let's talk now about the future.
So this episode is focused onembedded payments, but many
people, as you know, are alreadyeyeing embedded finance, so
meaning financial products,others like lending, insurance,
checking accounts.
That's kind of the next wavethat's coming.
So, from a technical and productstandpoint, what are the things
or enablers that you're buildingnow that will support that
(15:09):
expansion in the future?
SPEAKER_01 (15:11):
I like this one.
There's a lot we're thinkingabout and building for the next
wave in embedded payments.
And I actually like to thinkthat we are, you know, we're
helping evolve payments andembedded payments, and we are on
the we're on the forefront ofthat.
Kind of what we just talkedabout a minute ago, one of the
biggest bets that we're makingfor the future is around partner
and merchant experience.
As I look at like a lot of theoptions out there, this is a
(15:34):
real challenge.
The experience is not great.
So we call this OneX, oneexperience.
Today, a lot of those embeddedpayment solutions are very
fragmented and siloed, andyou've got to log into multiple
different systems, you've got tosign separate contracts, you got
to integrate a bunch ofdifferent APIs that are kind of
unrelated to piece together thefunctionality you're needing.
(15:56):
And OneX changes that.
We're unifying that everythingthat NMI offers payments,
onboarding, features liketokenization, data and insights,
and new future services likebusiness capital into a single
modular platform experience.
And that means that our partnerscan access everything in one
space and they can add thecapabilities as they grow and
(16:20):
design solutions that workeither standalone by themselves
or seamlessly together.
And actually, I would say evenbetter together because they
build on each other and the datais helpful between them.
Another foundational focusaround this expansion is really
enabling embedded finance.
And things like lending,insurance, or treasury, just as
some examples that they comedown to three big factors that
(16:43):
enable that identity,compliance, and data.
Because you need to truly knowyour merchants and you've got to
build compliance into the fabricof your platform and harness
that transaction data so thatit's already flowing through
your systems.
And a great example of that inMI is a product we're launching
later this year called BusinessCapital.
It lets our partners offerembedded lending directly to
(17:05):
their merchants without anycredit check by using the
merchants' payment volumepatterns.
Again, that's that data we'vegot on all that's happening
there.
It's using that data and thosetrends that we have.
That is the underwriting signal.
And that's really powerfulbecause it shows how payments
data can unlock entirely newfinancial services.
All of these sort of embeddedseamlessly inside of our
(17:26):
partners' software experiencesthat they're offering.
It looks and feels just likethem.
And I and honestly, I think thisis just the beginning because
once you've built thosefoundational capabilities, other
things like work and capital,insurance, revenue-based
financing, they can becomenatural extensions of the
platform.
SPEAKER_00 (17:42):
Okay, so you you mentioned it, so we're going to
go there.
You said data.
And when someone mentions data,AI comes up.
We don't specifically have aquestion.
We were going to talk about AI,but I think it's worth asking or
at least exploring a little bit.
You know, you have all thatdata.
Are you using AI tools on top ofthat to make some of these
decisions?
And how is AI sort of playing arole in this?
SPEAKER_01 (18:04):
We are very serious about AI and mindful of it and
looking at it.
Where what I would tell you isthat we, you know, we've
embedded AI into a lot of ourinternal operations, as I
suspect most companies have.
And we've been thoughtfullylooking at how we can embed AI
to our products.
And we are, we are in theprocess of rolling out a product
that has uh AI to help withthose decisioning, you know, MCC
(18:25):
code automation, things likethat.
Where I've got my concern headon is that the current state of
AI with these LLMs is thisprobabilistic sort of engine.
And if you ask the same question10 times, you get 10 different
answers or eight differentanswers, and two of them might
be wrong.
And that's just not okay inpine, you know, mess with
(18:46):
people's money and you get itwrong some of the times.
Just not okay.
So I've got my cautious hat onof I can't put on a product
that's AI backed that gets itwrong 10% of the time, 20% of
the time.
It's got to be right 100% of thetime.
And so we're just making surewe're very thoughtfully
stitching it together with ourexisting data intelligence and
insights that we have andautomation and smart workflows
(19:09):
and AI to augment that.
And you know, building out MCPservers that can that can be
trained on our existingknowledge and data and
workflows, and then just thatway it reduces the probability
of AI getting it wrong.
SPEAKER_00 (19:21):
So as platforms or software companies embed
payments even deeper, and wetalked about this a little bit,
they potentially take on morerisk, and it could be fraud, it
could be regulatory dataprivacy.
I mean, all of those are risksthat companies have to deal
with.
And then, you know, even more ifthey've embedded payments to the
point where they want to take onthat.
But what are some innovations orsolutions that you're excited
(19:43):
about, or maybe even investingin around helping these
companies around that kind ofrisk aspect?
SPEAKER_01 (19:48):
Yeah, I mean, you're you're absolutely right.
As payments become more deeplyembedded in software platforms
across the world, um, and theseplatforms scale up that surface
area for risk and attack, itjust expands.
So it's not just about fraudanymore, it's regulatory
complexity and solving that anddata privacy and how do you
verify identity of yourmerchants and people using the
(20:11):
platform and ongoing compliance.
So the key is turning thatchallenge into an enabler for
scale.
And uh, you know, I was kind ofjust talking about this, but you
know, an area I'm pretty excitedabout is how we are combining
our existing stuff like dataintelligence, automation and
workflows with AI to get aheadof that risk.
You know, we sit at the centerof so many payment flows, as I
(20:33):
know you know that, but butwe've we've got really rich
insights into transactionpatterns, the behavior that our
merchants, our partners,merchants are using, and even
anomalies that are happening atlike a global scale, stuff that
happened in Oregon that alsohappened in Florida, we can kind
of piece that together anddetect like a signature.
So we're we're we're investingin systems that can proactively
(20:53):
flag this kind of unusualbehavior and even dynamically
adapt to fraud, fraud thresholdsand prevent the bad actors
before they enter an ecosystem.
And we can do all that withoutadding any friction to the user
experience.
So look, we we've we've beenbuilding compliance as a
service, those capabilitiesdirectly into our platform.
(21:14):
And that's a big problem tosolve for partners, haven't it?
If you were having to solvethese things for yourself and
being left to, hey, good luck,go and figure out how to
navigate KYC, AML, PCI, insertyour three-letter acronym here,
right?
We've abstracted that complexityinto our infrastructure.
And that means that you canscale globally and you can
onboard merchants faster and youcan stay compliant by default
(21:36):
because we're solving thatproblem for you.
And maybe finally, and andimportantly, on this, on the
transaction side, we're leaningheavily into technologies like
network tokenization and 3Dsecure.
Like if I'm not sure familiar,how everyone is with on the
audience here with you knowtokenization, but tokenization
is amazing.
Like it reduces fraud, improvesyour approval rates by replacing
(21:57):
those static card numbers thatcan be stolen and you know, uh
taken used with fraud, andreplaces those with dynamic
secure tokens.
And they're kind of meaninglesswithout the backing of the what
that token means, translatingthat.
And then 3DS, that's adding anintelligent authentication layer
that steps up verification whenit's needed.
Like maybe there's a suspicioustransaction or a high-risk
(22:18):
geography.
You can you can really dial upthat verification, but it can
also be invisible when it's notneeded.
So kind of combining these, theymake payment safer and smoother
for the end users, and they alsoreduce fines and fees and burden
for our partners.
So we really we really don'tjust we don't see risk as a
blocker, we see it as acatalyst.
And if we can handle itintelligently behind the scenes,
(22:39):
our partners can focus on whatthey do best, growing their
business with confidence.
SPEAKER_00 (22:44):
Well, I'm glad you you brought up the network
tokenization because we're goingto actually have an episode
during the series ontokenization.
So we'll be doing sort of adeeper dive into that.
So I'm looking forward tolearning more about that.
But Philip, this has been agreat discussion so far.
And, you know, kind of one finalquestion.
When it comes to embeddedpayments, what's the one idea or
(23:04):
mindset that you hope thelisteners will take away from
this conversation?
SPEAKER_01 (23:08):
One mindset.
I'd like you to take away thatembedded payments, it's not just
a technology choice or a costcenter.
They're a business modeldecision.
And the companies that that winare the ones that stop thinking
of payments as I got to bolt onthis feature just because I've
got to take payments.
And you start treating it as astrategic lever for growth and
(23:28):
innovation and retention.
So that's what I'd like to leaveyou with.
SPEAKER_00 (23:32):
Well, Phillip, thank you so much for being on the
show today.
I know your time is veryvaluable, so I really appreciate
you being here today.
SPEAKER_01 (23:37):
I enjoyed it.
I think it was a great, greattopic that you brought up, some
really good questions, thingsI'm particularly passionate
about.
And I just I'm grateful for theopportunity to chat with you
today, Greg.
Thank you.
SPEAKER_00 (23:47):
Thank you.
And to all your listeners outthere, I thank you for your time
as well.
And until the next story.
Welcome to the Signal, powered by the Leaders
in Payments Podcast, where weare cutting through the noise to
reveal what truly matters inpayments and fintech.
Hello, everyone, and welcome tothe Leaders in Payments Podcast.
I'm your host, Greg Myers, andtoday's special guest is Philip
Gorick, the Chief TechnologyOfficer at NMI.
So, Philip, thank you for beinghere and welcome to the show.
SPEAKER_01 (00:21):
Hi, thank you.
Really happy to be joining youtoday.
SPEAKER_00 (00:24):
This episode is part of our embedded payments theme,
one of several topics we'reexploring in the Signal, where
we cut through the noise anduncover what truly matters in
payments in FinTech.
Embedded payments have evolvedfar beyond the simple pay now
button.
Today they're reshaping howsoftware companies operate,
driving automation, efficiency,and new revenue.
(00:45):
This episode unpacks whereembedded payments began, where
they are now, and what's next.
So, Philip, before we dive intothe meat of the conversation,
can you give us a quick snapshotof your personal background,
maybe where you grew up, whereyou call home today, a few
things like that?
SPEAKER_01 (00:59):
I moved a lot growing up.
Yeah, that that certainly shapeda bit of my like personality, I
think.
But it was mostly in and oraround Austin, Texas area.
But since then, really rightafter high school, I moved up to
the DFW area.
So I've been I've been up herearound, you know, 20 plus years.
Today I live in South Lake, sogo dragons.
Let's go.
Uh Southflake, Carol.
SPEAKER_00 (01:20):
Awesome.
So as you might remember, I'mI'm in DFW area too, up in
Prosper.
So we have that in common forsure.
So if you don't mind, can youwalk us through your
professional journey and how yougot to NMI?
SPEAKER_01 (01:31):
My background's kind of always been at the
intersection of technology andbusiness.
I wouldn't say I planned it thatway, but that's just kind of how
it's always worked out.
And I've spent my careerbuilding and scaling software
platforms.
And I began that first as asoftware engineer writing code,
designing systems andapplications, and then sort of
transitioned to leading productand technology teams.
(01:53):
That journey's really led me towhere I am today at NMI, where I
serve as CTO.
And my mission is to make thecomplex world of payments, and
boy, is it complex, uh, makethat world feel invisible and
intuitive so that our partnersand their end users can have a
great seamless experience.
SPEAKER_00 (02:08):
Well, if you don't mind at a high level, can you
tell us what NMI does?
SPEAKER_01 (02:12):
Yeah.
So NMI is a payments technologycompany, and we're powering
payments behind the scenes forSaaS platforms, ISO payment
providers, and the like.
And we enable software companiesto embed payments deeply into
their products, not just as atransaction layer, but as a
strategic growth engine.
And we have a pretty significantscale.
We're powering over$400 billionin payment volume.
(02:35):
And we we focused on making iteasier for software companies to
launch and scale and monetizepayments.
SPEAKER_00 (02:42):
Okay, great.
So just to level set for thisconversation, can you give us
your high-level definition ofwhat embedded payments means and
why it's so important tosoftware companies and ISVs?
Yeah, good question.
SPEAKER_01 (02:54):
Embedded payments means that the payment
experience is woven directlyinto the software workflow, into
that system.
It's not a handoff where yourcustomer is using a separate
terminal or a separate websiteto go and do payments.
The customer ever leaves yourapplication.
For software companies, that'scritical because it drives
automation, it's improving andstreamlining user experiences
(03:18):
and unlocks entirely new revenuemodels.
So instead of just facilitatingpayments as like a person in the
middle, if you will, they becomea payment provider.
And you're able to captureresidual revenue and strengthen
your customer attention.
Gives you a lot of control overthe experience.
SPEAKER_00 (03:33):
Okay, great.
Makes a lot of sense.
So let's dive in and talk aboutembedded payments from a
technical or productperspective, which I know you're
very passionate about.
So, in your view, what was theminimal viable embedded payments
model when NMI first started andhow has that model evolved over
time?
SPEAKER_01 (03:52):
Gosh, the NMI has been around a long time, well
before I I've been here, youknow, 25 plus years.
But if I were to say, like boilit down, like back in the day,
I'd say the MVP was simplecheckout, you know, transaction
enablement.
But fast forward to today, andit's a fully integrated life
cycle of payments.
So when embedded paymentsconcept sort of first emerged,
(04:14):
that MVP, I think, was justbeing able to take a card on
file inside your application,which was great, right?
A very simple checkoutexperience.
Today, though, it's it's reallydelivering that full financial
infrastructure from modernmerchant onboarding, instant
underwriting, automation ofpayout, real-time analytics,
embedded financial services, allof that without ever leaving.
(04:36):
So payments has really gone frombeing a feature to being this
foundation, and and there's justso much more expected as table
stakes functionality today thanit used to be.
SPEAKER_00 (04:47):
Yeah, and I think that's an important point that
some people I think kind of skipover as they think about it's
the payment, but there's morethan just the payment, right?
You have, like you mentioned,you have the onboarding and the
compliance and you know, all ofthose things that that have to
happen as well.
And I think, you know, if if Ican put words in your mouth, NMI
has sort of built all of thosetools that enable these software
(05:09):
companies to be able to do it inone place.
SPEAKER_01 (05:11):
Yeah, you got it.
I mean, that's that's reallywhat makes us special, is that
we've got everything you needfrom an entire payments
lifecycle, start to finish, signup to payout.
And it's all bundled together inan easily consumable way.
SPEAKER_00 (05:24):
Well, as these software companies or platforms
that are using embeddedpayments, as they start to
scale, and that could be scalein volume, that could be scale
by going to other geographies.
You know, what are some of thebottlenecks or failure points
that you've encountered?
SPEAKER_01 (05:39):
Payments is a complicated ecosystem and it
does, it spans so manydisciplines and things to solve
for.
But I think one of the first bigbottlenecks that you'll you'll
see is you know, commonly in theonboarding and KYC delays,
right?
And as your platform scales, thewhat you do today, maybe manual
underwriting and and your manualcompliance, they they often just
(06:00):
don't scale with them.
And that can really slow thingsdown and make for a pretty
frustrating experience, both foryou and your customers.
I think another one that I thinkabout is just supporting that
global and even regionalexpansion.
As your business grows and youyou're looking to support
multi-cult multi-regions,multi-u-countries, managing
local payment methods andcompliance and global
(06:23):
regulations, and they are youknow they're different globally
and regionally.
California has different rulesin Oklahoma, of course, cross
borders, payout requirements,those get tricky and complex
really fast.
And then lastly, I'd say manyplatforms underestimate the data
aspect, the data side of things.
Because if you can't see and acton payments data, you are
(06:45):
leaving growth opportunities onthe table.
And you're gonna struggle toidentify and manage risk uh on a
on a go-forward basis.
SPEAKER_00 (06:53):
Okay.
And some of your clients willwant deeper customization while
others kind of want thatplug-and-play simplicity.
So, how are you, you know, howdo you architect for both
extremes without causing like alot of complexity?
SPEAKER_01 (07:08):
This is one you got to be very thoughtful about.
Um, I think I I've I'm patourselves on the back here.
I think we've we've done apretty good job here where it's
not so easy, but I think that itcomes down to, from a design
perspective, you've got todesign for optionality, not
complexity.
And may that sound simple,right?
And it's easy to say, but youknow, we approach this with a
modular architecture.
(07:29):
So if a partner wants to be upand running in days, they just
need to get up and going, theycan drop in a pre-built no-code
component that we've got and beoff to the races.
But if they later need a deepercontrol, or they're they're
already pretty sophisticated inpayments and they want deep
control out of out of the boxand they're willing to take that
time, you know, that overwhether that be things like the
(07:51):
onboarding workflows or the userexperience or the data, they can
build on our low-code uh SDKsolutions or even have full
control with our API.
So we we think of it as like nocode, low code, and full control
with API.
And so we often find that ourpartners, in many cases, they
choose to get started quicklywith one of our no-code
solutions.
And then over time, as theyfigure out what they need to be
(08:13):
doing and what's important forthem, they build out other
functionality with deepercontrol that's tailored to their
needs.
So I think the key is thateither approach is completely
fine and correct.
It just depends on where you arein your journey.
And critically to that, theseall run on the same platform.
So you don't have to compromiseflexibility for simplicity.
(08:34):
And and even maybe moreimportantly, is that you're in
control of that decision andtiming.
SPEAKER_00 (08:40):
So do you see these software companies as having, I
guess maybe it's maybe it's thesize, maybe it's not, but sort
of they're early in theirdevelopment, they go with the
real simple thing.
And then as they grow, they havemaybe they bring on a payments
person or consultant orsomething, and then they kind of
go deeper.
Is that kind of what you see?
SPEAKER_01 (09:00):
Yeah, 100% we see that.
We see in kind of all shapes andsizes from I'm a small company
and I don't have developersreally to get going.
You know, we don't our we're wedon't our business is a startup,
right?
Like we maybe we don't even haverevenue yet.
And the idea that we wouldinvest developer cycles to go
and build out some beautiful,you know, sophisticated workflow
going to our APIs directlydoesn't make sense for them.
(09:21):
And so they go with the drop-in,no code solution.
And then we see the big youknow, enterprise kind of
customers that they do have theresources to invest in that.
So it's uh it's really no onesize fits all.
You also find really maturecompanies that just want to get
going very quickly while theybuild out their full control
experience.
So it's it's it we see it kindof all over the place.
(09:41):
But yes, you're exactly right.
It kind of depends on where theyare.
SPEAKER_00 (09:44):
And do you find that they typically have the
technical resources to handlethe integration?
SPEAKER_01 (09:49):
They often are very quickly able to get up and going
through our SDKs and that we'vegot great documentation and you
know, our developer resources,plus our support.
You know, we we have gotintegration support and hand we
hold your hand if you need,right?
But we often find that ourpartners can, in many cases, get
up and going pretty easily ontheir own.
And again, when when you get tothe more full control, that just
(10:10):
takes a bit more time and aninvestment to do a rich API full
you designed the full experienceend to end yourself.
That just takes more timebecause you're doing more.
SPEAKER_00 (10:20):
Well, let's talk about the business side of
embedded payments for a minute.
So, embedded payments arebecoming table stakes for some
of the bigger software companiesand ISVs.
So, how does NMI differentiateitself in this kind of crowded
space?
And what are the motes thatyou've built around your
business from a differentiationperspective?
SPEAKER_01 (10:38):
I like this question.
I think one of our biggest moatsis that we've solved a ton of
really difficult problems acrossthe spectrum of payments.
And we've packaged it all upinto a truly modular platform,
sort of that what you need whenyou need it approach.
And as an example, our partnercan start with just the payment
processing use case, a no-code,low-code solution like we just
(10:59):
talked about, and they caneasily add services like
merchant acquiring or fraudprevention or residuals
management or tokenization,whatever, financing as they're
growing.
And when you combine that withEnemy Scale, which is a highly
reliable and available platform,along with deep compliance
(11:20):
expertise and our world-classsupport that has this partner
first philosophy, we're not justa vendor.
We're an extension of yourbusiness, we're your partner in
the truest sense.
And that's that's prettyuncommon.
I think that's a pretty, prettygreat thing that differentiates
us in the in this crowded space.
SPEAKER_00 (11:38):
So, in the sales environment, when you're selling
embedded payments to softwarecompanies versus you know
traditional merchants, what arethe biggest friction points or
objections that you hear and howdo you address those?
SPEAKER_01 (11:50):
You know, I'd say one of the more consistent
sources of feedback we hear areconcerns about sign-up,
boarding, and integrationcomplexity.
Because it is, it is, we'veabstracted a lot of stuff behind
the scenes.
And you know, we're we're alwaysinvesting in how to make that
better.
And we've invested heavily intools and SDKs and documentation
to kind of get as close to thatplug and play as possible.
(12:13):
But we're constantly investingin improving these experiences.
I mean, heck, the the main themeof one of our three strategic
imperatives is about this.
So we're taking it veryseriously and releasing several
enhancements so far this yearalready.
And I'm really excited aboutreleasing even more
transformational partner andmerchant experience improvements
(12:34):
next year.
There's a lot that we've got onthere.
I'd say risk, Greg, is uh isanother concern.
We handled so much of the heavylifting on underwriting and
compliance and monitoring.
And we spent a lot of timehelping partners model and
understand the revenue upside,the value prop of it all.
So they see payments as a growthdriver, not a distraction.
(12:55):
Does that make sense?
SPEAKER_00 (12:56):
Yeah, absolutely.
And it's you know, it'ssomething that I hear that
software companies have, Iguess, matured to understand
better where to find therevenue, what are the things
they can do to enhance therevenue.
And then a lot of them, it'sabout the client experience,
right?
What are they, what's theexperience they're allowing and
you know, who takes on the riskand who takes on the different
(13:18):
aspects of it.
So I it sounds like the withNMI's kind of modular platform,
they can plug in what they needand when they need it.
So when you're thinking aboutdesigning and positioning that
modularity that we've beentalking about, how do you do it
so that partners can takeadvantage of it, you know,
without feeling, hey, I need tobuild something, you know, this
(13:38):
from scratch, and then there'sthis other other module from
scratch.
And I mean, it's probably a verytechnical answer, but I'm
curious, you know, how do you dothat so that they don't feel
like that modularity becomessomething they're rebuilding
every time from scratch?
SPEAKER_01 (13:51):
Yeah, you know, I I think of modularity a bit like
building blocks, like Legos, ifyou will.
And you don't have to rip outyour existing tech or commit to
some significant massivemigration.
You start what solves yourimmediate problem, and that's
that's the modularity aspect ofit.
And, you know, maybe that'smerchant boarding or maybe it's
payment processing.
I don't know.
It depends on where you are.
(14:11):
You expand as your strategyevolves.
So that flexibility is a bigreason partners choose NMI over
all or nothing monoliths.
You know, there's theseplatforms where it's like you've
got to use everything or nothingat all.
And I like to think that we'rean all-in-one platform, but with
optionality to meet you whereyou are.
And again, you can chooseeverything we've got or just one
(14:33):
thing or some combination.
There's an infinite number ofpermutations that you could do.
Well, not infinite, but asignificant amount of amount of
ways you can combine things.
It helps with that modularityand getting to what you need to
do without having to rebuildeverything from scratch.
SPEAKER_00 (14:46):
Well, let's talk now about the future.
So this episode is focused onembedded payments, but many
people, as you know, are alreadyeyeing embedded finance, so
meaning financial products,others like lending, insurance,
checking accounts.
That's kind of the next wavethat's coming.
So, from a technical and productstandpoint, what are the things
or enablers that you're buildingnow that will support that
(15:09):
expansion in the future?
SPEAKER_01 (15:11):
I like this one.
There's a lot we're thinkingabout and building for the next
wave in embedded payments.
And I actually like to thinkthat we are, you know, we're
helping evolve payments andembedded payments, and we are on
the we're on the forefront ofthat.
Kind of what we just talkedabout a minute ago, one of the
biggest bets that we're makingfor the future is around partner
and merchant experience.
As I look at like a lot of theoptions out there, this is a
(15:34):
real challenge.
The experience is not great.
So we call this OneX, oneexperience.
Today, a lot of those embeddedpayment solutions are very
fragmented and siloed, andyou've got to log into multiple
different systems, you've got tosign separate contracts, you got
to integrate a bunch ofdifferent APIs that are kind of
unrelated to piece together thefunctionality you're needing.
(15:56):
And OneX changes that.
We're unifying that everythingthat NMI offers payments,
onboarding, features liketokenization, data and insights,
and new future services likebusiness capital into a single
modular platform experience.
And that means that our partnerscan access everything in one
space and they can add thecapabilities as they grow and
(16:20):
design solutions that workeither standalone by themselves
or seamlessly together.
And actually, I would say evenbetter together because they
build on each other and the datais helpful between them.
Another foundational focusaround this expansion is really
enabling embedded finance.
And things like lending,insurance, or treasury, just as
some examples that they comedown to three big factors that
(16:43):
enable that identity,compliance, and data.
Because you need to truly knowyour merchants and you've got to
build compliance into the fabricof your platform and harness
that transaction data so thatit's already flowing through
your systems.
And a great example of that inMI is a product we're launching
later this year called BusinessCapital.
It lets our partners offerembedded lending directly to
(17:05):
their merchants without anycredit check by using the
merchants' payment volumepatterns.
Again, that's that data we'vegot on all that's happening
there.
It's using that data and thosetrends that we have.
That is the underwriting signal.
And that's really powerfulbecause it shows how payments
data can unlock entirely newfinancial services.
All of these sort of embeddedseamlessly inside of our
(17:26):
partners' software experiencesthat they're offering.
It looks and feels just likethem.
And I and honestly, I think thisis just the beginning because
once you've built thosefoundational capabilities, other
things like work and capital,insurance, revenue-based
financing, they can becomenatural extensions of the
platform.
SPEAKER_00 (17:42):
Okay, so you you mentioned it, so we're going to
go there.
You said data.
And when someone mentions data,AI comes up.
We don't specifically have aquestion.
We were going to talk about AI,but I think it's worth asking or
at least exploring a little bit.
You know, you have all thatdata.
Are you using AI tools on top ofthat to make some of these
decisions?
And how is AI sort of playing arole in this?
SPEAKER_01 (18:04):
We are very serious about AI and mindful of it and
looking at it.
Where what I would tell you isthat we, you know, we've
embedded AI into a lot of ourinternal operations, as I
suspect most companies have.
And we've been thoughtfullylooking at how we can embed AI
to our products.
And we are, we are in theprocess of rolling out a product
that has uh AI to help withthose decisioning, you know, MCC
(18:25):
code automation, things likethat.
Where I've got my concern headon is that the current state of
AI with these LLMs is thisprobabilistic sort of engine.
And if you ask the same question10 times, you get 10 different
answers or eight differentanswers, and two of them might
be wrong.
And that's just not okay inpine, you know, mess with
(18:46):
people's money and you get itwrong some of the times.
Just not okay.
So I've got my cautious hat onof I can't put on a product
that's AI backed that gets itwrong 10% of the time, 20% of
the time.
It's got to be right 100% of thetime.
And so we're just making surewe're very thoughtfully
stitching it together with ourexisting data intelligence and
insights that we have andautomation and smart workflows
(19:09):
and AI to augment that.
And you know, building out MCPservers that can that can be
trained on our existingknowledge and data and
workflows, and then just thatway it reduces the probability
of AI getting it wrong.
SPEAKER_00 (19:21):
So as platforms or software companies embed
payments even deeper, and wetalked about this a little bit,
they potentially take on morerisk, and it could be fraud, it
could be regulatory dataprivacy.
I mean, all of those are risksthat companies have to deal
with.
And then, you know, even more ifthey've embedded payments to the
point where they want to take onthat.
But what are some innovations orsolutions that you're excited
(19:43):
about, or maybe even investingin around helping these
companies around that kind ofrisk aspect?
SPEAKER_01 (19:48):
Yeah, I mean, you're you're absolutely right.
As payments become more deeplyembedded in software platforms
across the world, um, and theseplatforms scale up that surface
area for risk and attack, itjust expands.
So it's not just about fraudanymore, it's regulatory
complexity and solving that anddata privacy and how do you
verify identity of yourmerchants and people using the
(20:11):
platform and ongoing compliance.
So the key is turning thatchallenge into an enabler for
scale.
And uh, you know, I was kind ofjust talking about this, but you
know, an area I'm pretty excitedabout is how we are combining
our existing stuff like dataintelligence, automation and
workflows with AI to get aheadof that risk.
You know, we sit at the centerof so many payment flows, as I
(20:33):
know you know that, but butwe've we've got really rich
insights into transactionpatterns, the behavior that our
merchants, our partners,merchants are using, and even
anomalies that are happening atlike a global scale, stuff that
happened in Oregon that alsohappened in Florida, we can kind
of piece that together anddetect like a signature.
So we're we're we're investingin systems that can proactively
(20:53):
flag this kind of unusualbehavior and even dynamically
adapt to fraud, fraud thresholdsand prevent the bad actors
before they enter an ecosystem.
And we can do all that withoutadding any friction to the user
experience.
So look, we we've we've beenbuilding compliance as a
service, those capabilitiesdirectly into our platform.
(21:14):
And that's a big problem tosolve for partners, haven't it?
If you were having to solvethese things for yourself and
being left to, hey, good luck,go and figure out how to
navigate KYC, AML, PCI, insertyour three-letter acronym here,
right?
We've abstracted that complexityinto our infrastructure.
And that means that you canscale globally and you can
onboard merchants faster and youcan stay compliant by default
(21:36):
because we're solving thatproblem for you.
And maybe finally, and andimportantly, on this, on the
transaction side, we're leaningheavily into technologies like
network tokenization and 3Dsecure.
Like if I'm not sure familiar,how everyone is with on the
audience here with you knowtokenization, but tokenization
is amazing.
Like it reduces fraud, improvesyour approval rates by replacing
(21:57):
those static card numbers thatcan be stolen and you know, uh
taken used with fraud, andreplaces those with dynamic
secure tokens.
And they're kind of meaninglesswithout the backing of the what
that token means, translatingthat.
And then 3DS, that's adding anintelligent authentication layer
that steps up verification whenit's needed.
Like maybe there's a suspicioustransaction or a high-risk
(22:18):
geography.
You can you can really dial upthat verification, but it can
also be invisible when it's notneeded.
So kind of combining these, theymake payment safer and smoother
for the end users, and they alsoreduce fines and fees and burden
for our partners.
So we really we really don'tjust we don't see risk as a
blocker, we see it as acatalyst.
And if we can handle itintelligently behind the scenes,
(22:39):
our partners can focus on whatthey do best, growing their
business with confidence.
SPEAKER_00 (22:44):
Well, I'm glad you you brought up the network
tokenization because we're goingto actually have an episode
during the series ontokenization.
So we'll be doing sort of adeeper dive into that.
So I'm looking forward tolearning more about that.
But Philip, this has been agreat discussion so far.
And, you know, kind of one finalquestion.
When it comes to embeddedpayments, what's the one idea or
(23:04):
mindset that you hope thelisteners will take away from
this conversation?
SPEAKER_01 (23:08):
One mindset.
I'd like you to take away thatembedded payments, it's not just
a technology choice or a costcenter.
They're a business modeldecision.
And the companies that that winare the ones that stop thinking
of payments as I got to bolt onthis feature just because I've
got to take payments.
And you start treating it as astrategic lever for growth and
(23:28):
innovation and retention.
So that's what I'd like to leaveyou with.
SPEAKER_00 (23:32):
Well, Phillip, thank you so much for being on the
show today.
I know your time is veryvaluable, so I really appreciate
you being here today.
SPEAKER_01 (23:37):
I enjoyed it.
I think it was a great, greattopic that you brought up, some
really good questions, thingsI'm particularly passionate
about.
And I just I'm grateful for theopportunity to chat with you
today, Greg.
Thank you.
SPEAKER_00 (23:47):
Thank you.
And to all your listeners outthere, I thank you for your time
as well.
And until the next story.
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