Ep. 142 - When the Buyer Is Software: Accountability, Compliance and the Future of Payments Infrastructure, with Penny

Justin Hanna (0:05)

Welcome back to The Payments Shed live here at Fintech Meetup Europe in Lisbon. Right now, we are joined by Tony Ferguson, CEO of Penny International. Tony, thank you so much for joining us. First question, how did you get into the world of this industry?

Tony Ferguson (0:20)

In Fintech, yes. Well, look, I've been in computers or IT for a long time. So I basically started in the 80s. You can imagine how it was back then.

But in Fintech, I've been in just on 26 years now. So started a company in Australia, the first non-bank issuer into the region.

It was a very interesting tract at that time because in Australia, they didn't know what prepaid was. When you talk to them about it, they were sort of looking at me as if I had two heads. You're not a bank, but you want to issue cards into the Australian region. That's never going to happen. But what really helped us was the regulator. The regulator stepped in and said, we want innovation into the payments market. The banks weren't providing the services that the customers were desiring. So they really assisted us to get going. So in 2004, we did our first transaction. It took us a while to build our processing engine. We're a processor. And then you can imagine after 2004, the Patriot Act got introduced, financial service licensing got put in place. We needed to build an AML, KYC framework. And there was a lot happening in regards to changes that came into effect. We didn't have the, you know, we didn't have any frameworks like Bantra or anything like that that would assist us. We had to make it up as we went along. So we really did it the hard way. I listed that company in 2012, and I basically had a sabbatical for about three years.

But what really wanted me for, you know, basically called me back into the marketplace was that you had this interchange revenue that was basically obliterated in Australia and in the UK, I believe. But in the US, on the commercial side, it hadn't been touched. So we forget, you know, America's a good market for us. It's got a lot of population, and it's got a lovely interchange. So we started Penny International in 2015, and we've been going for just on the, you know, 10, 11 years now.

Justin Hanna (2:47)

Amazing. And when we start thinking about the agentic world, of course, we have to. My kind of question to you is, if an agent makes a payment, who pays for that?

Should it be the consumer that makes it, kind of pays for that, or should it be somebody else?

Tony Ferguson (3:03)

Yeah, I mean, it is a really interesting question. Because, you know, to me, it hasn't changed, you know. There's still a person behind the transaction in the long run. And, you know, it comes down to legality. Yeah, well, there is some gray areas there at the moment when it comes to it. But at the end of the day, it's a person is responsible for that transaction. And I look at it and I'm, you know, there's a lot of hype in this AI market. You must be sick of talking about AI. But I kind of, I'm very practical. When I look at it, you know, there's, I guess, the frontier models are using a lot of the fear in the market to market their program.

You know, things like that you hear about, oh, the agents are leaving notes for each other and all that sort of carry on. You know, the way I see it, they're logs, you know. It's always been there.

A lot of, you know, this talk about it being sentinel and going live, I think it's still just common guessing. I think that AI is still just guessing what the next word's going to be. And so when it comes down to the practicality of a transaction, we've been doing machine to machine transactions or non-human transactions for the last five years using virtual credit cards.

We made a decision five years ago that we knew there was issue in scaling with those types of transaction machine to machine, or transactions that transact at the speed of machines. Because the payments network is, there's legacy in that network, right? So it was designed for somebody standing at a till and making a payment. Now it's no longer that. And so there is a lot of wrinkles in the network. We decided five years ago that we would do one thing and do it very well, and that was iron out those wrinkles. You can't get the scale that you need today with the Jandek Payments without having those errors ironed out in your application, and you can't do it with human intervention. So to be able to keep your customers happy and to ensure that they're not getting a pile of errors every day, then you need to fix those errors and do it very, very quickly.