Stephen: This is your host, Stephen Sargeant, here Around The Coin Podcast. You're in for a treat. We have Roberto Kafati. He is the CEO and founder of DEUNA. This is a payment infrastructure. They're taking AI agent intelligence with their Thea platform. This conversation is all around payments, payments, payments, central America, Latin America, north America.

Roberto provides refreshing insights about the challenges with AI, Agentic intelligence. He talks about how you build trust with vendors and merchants that are powering the companies and stores that we interact with on a daily basis.

He talks about his early crypto days back in 2015 and where he thinks stable coins are going to integrate in his infrastructure and others as we continue on through the momentum built in the United States. This is a real life conversation with an entrepreneur that has a consultant's background and talks about the challenges and the resilience of building a payments infrastructure during the start of the pandemic. This is a conversation you're gonna wanna listen to and check out Roberto and maybe me and maybe his team At Money 2020 in Las Vegas coming up at the end of October. Reach out to Roberto if you love this podcast as much as I did.

Stephen: Welcome to another edition of Around The Coin podcast. We have live from New York City, Roberto Kafati. You are the founder and CEO of DEUNA. Roberto, you have an interesting background.

You went to school and you've learned so much, but I want to touch a little bit about your early career.

You worked with one of the biggest consultancies, McKinsey in Central and South America from 2017 to 2020. What were some of the key learnings from your experience there?

Roberto: That's a great question Stephen. Well, I was at McKinsey. What I realized was that payments was outdated, um, that payments was looked at as a cost cutting center instead of a growth opportunity, uh, or as a growth driver, and that a lot of the largest merchants were having difficulty, um, enabling their online channels. And leveling the playing field with the largest aggregator and marketplaces and payment infrastructure was at the center of it all and unlocking payment infrastructure. Advanced payment infrastructure could be the key for allowing these merchants not only to compete in on, on an equal footing with the largest players out there, but also to deliver a magical user experience to the to the end consumer.

And also to unlock a lot of different revenue and growth opportunities that otherwise would've been missed. And so McKinsey really opened my eyes by allowing me to work with the largest retailers, the largest, uh, financial institutions in Latin America, and help them drive transformation, digital transformation around payments.

Stephen: You know what's interesting?

Before we press record, you're telling me that you got into crypto a little bit earlier than I think most people, including myself. You know, 2017 I think was really an eyeopener for a lot of people that were in traditional industries, financial services, even in compliance, cybersecurity, you know, investments you got in in 2015.

Talk a little bit about what the industry was like at 2015. Who were some of the major players that you were having discussions with? What were your first thoughts about, you know, crypto? Was it Bitcoin for you first? Was it Ethereum that got you interested? Tell us a little bit about your early days in crypto.

Roberto: That's a great question. So Ethereum got me into it first. Uh, thanks to one of my best friends, uh, from high school back in Honduras, and he was a core developer at Ethereum, so he got me as early as 2015. Um, I soon started to play around a lot with, um, different layer two coins on Ethereum, and also got very involved with Bitcoin earlier on.

Um, the, the largest players were, were the developer groups at that end, uh, at that moment in time, as well as different exchanges that were coming up. And as the industry matured, a lot of different projects came about, uh, DeFi protocols, DeFi exchanges, um we had crypto arts, the punks, and everything, but I think at the beginning it was a lot more about the wheel crypto, and yeah Ethereum and bitcoin, at least my opinion are the most important assets out there.

Stephen: And what were your use cases? You know, you're in either Latin America, south America, you're seeing some of the, probably, you know, when I started getting into crypto 2017, everyone was talking about banking, the unbanked. So I'm assuming if you're in Latin America, a lot of conversations are going on talking about how to, you know, reduce hyperinflation, how to make transfers around the world, remittances.

Tell me about about some of the use cases that were going through your head when you first started learning about Ethereum.

Roberto: That's a great question.

So actually I'm from Honduras. I was born and raised there in Central America. And Central America has a very interesting characteristic where. As a percentage of GDP, we receive around 20 to 30% of GDP in remittances. Um, and a lot like the majority of those remittances today happen through carriers such as Western Union that charge you hefty fees at the moment, back in 20 15, 20 16.

Um, when we ran the numbers, we we're looking at around eight to 10% per transaction on an average transaction. Yeah. Average transactions are about 120 bucks. Um, and what we realized was that a lot of these people would, it would make a huge difference if they could get their money faster and avoid that fee, and we saw crypto as the opportunity to enable that.

Now, when you're looking at it. It sounds very magical on paper and, and it works, but how do you turn that crypto into a, into an actual asset or a value of exchange in the country of the recipient? You require off ramps, and for those off firms to happen, you require liquidity, which becomes a problem in order to actually solve the remittance equation.

I think that there's players that are coming about to that, but at the moment in time, what we're looking for was how can we use and leverage crypto to enable like 20 to 30% of the GDP of these countries to come through without the fees that they're looking at and without the delays that they're looking at in that moment.

Stephen: I think you bring up a great point. You know, especially if you're around since 2017, it's not so much what the regulators are saying. It's really the banks that are the defacto regulators. The regulations could give you a list of requirements. But if you don't meet your bank's risk requirements, you're not gonna get bank counts.

And we don't realize how much we rely on the traditional banking networks in order to facilitate crypto businesses. I think many of the disruptors, I remember crypto's supposed to disrupt a lot of, uh, companies. They're supposed to disrupt the banks, but they forgot that you need the banks in order to operate your.

So to your point, it's great to have this amazing asset, stable Coin or crypto, but what do you do to implement it into real life? That's where it gets a little bit tricky, especially I'm assuming in places like Honduras that, um, I'm gonna assume that weren't on the leading edge when it came to crypto regulation.

Roberto: No, they were not at all. And you're totally right. We actually launched a pilot in auras in some circle case. We were allowing some specific individuals to receives. This is not with DEUNA, this is prior. And, um, when we tried to scale the project, we realized that we really needed banking institutional support.

And that's when they told us like, we don't like the k yc. And a ML aspect of it had very high standards with all reasonable like expectations, to be honest with you. That's where I went into McKinsey. Back to your original question, um, I went into McKinsey with the purpose of becoming a digital payments expert and, and earning the reputation as well as the relationships with the institutions that I needed in order to be able to enable that project.

However, that didn't happen because of different, different topics of life, different things in life that led me to found DEUNA start DEUNA and grow the DEUNA.

Stephen: I'm curious, so, you know, in Stanford you were in a fellowship, you know, in regards to pursuing entrepreneurship, profit ventures. Now you start DEUNA. You know, do you remember, you know, that fellowship, do you remember maybe some of the conversations that were happening back at that time? Maybe some ideas that have turned into real life businesses or projects, anything interesting or well-known ventures from back at that time at Stanford?

Roberto: DEUNA was born at the beginning of Stanford. Um, and my co-founder, Jose Maria, was able to grow DEUNA a lot as well, uh, thanks to his day to day as I was gonna school. Right. Um, and I would tell you that during the fellowship, the most important aspect of it was realizing, and at my time at Stanford, during my MBA was realizing that how important it was to iterate with the right customers, with the right merchants.

Build around them, build a moat around them. And the story of DEUNA is really a story of resilience over the last five years and a story of evolution according to the merchant needs. And that has allowed us to one, grow to cover over 10% of the online GDP of over five countries. A third of Mexico's and two be uniquely positioned now to actually drive the future of commerce by allowing us to really enable enterprise AI in a level that has not been seen before.

And that that all comes back from the, the, my time at Stanford and during the fellowship of all those valuable lessons that you iterate, you build these big businesses by listening to your merchants, by being resilient. And although like it seems like that's on every textbook, once you live it and you realize how truthful that is, you realize how important those that advice is actually.

Stephen: And the one thing those textbooks didn't have is letting you know that there might be a global pandemic that completely changes the game. What was the attitude? The mindset of you and your co-founder, you know, you're launching this business and then you know, you get that text or email that like, oh yeah, by the world way, you know the world's going to just shut down for two weeks.

Which ends up being two years. Was this actually helpful, I'm assuming to your business, as more merchants were coming online? Did this kind of support your thesis, like, these companies need us now more than ever, or, and was it a little bit scary trying to navigate in such uncertain times? Especially when it comes to things like funding or VC backed money.

Roberto: That's a great question. I'll give you a very high level summary. In March, 2020, the pandemic hit. I was still at McKenzie when it did. Um, I left McKinsey because my family's in the fast food industry, and our revenues dropped 80% overnight. We had to start firing people like about a month or two months afterwards because, or like the government wasn't allowing enduring, fast food restaurants to sell online.

And my family calls me while I'm at McKinsey and they tell me, we know that you've led different, uh, large merchant digital transformations. We need your help. This is what's happening. And the remaining 20% of the revenue was all allocated, not in store, not online. It was allocated to third party aggregator and marketplaces, delivery apps.

And they were charging us a hefty fee because they knew that they, we didn't have an option. So when we started to, when I, like we started it in April, 2020 with Jose Maria, Jose Maria's family is also going through a very similar moment in time. We decide that that was enough, that we didn't wanna patch it.

We actually wanted to level the playing field for any merchant worldwide to be able to compete on an equal footing with the largest players out there, because otherwise they were all going to get this intermediated by the marketplaces, by the aggregators, by the delivery apps. And we wanted not that to happen like we wanted them to have like the tools and the toolkit to actually be able to have a chance.

We started that in April, 2020. So the pandemic was actually a huge driver in terms of, um, digital adoption in the region, which I did definitely help us, um, both in terms of enterprises realizing and merchants realizing that they really needed to make the investments, but also in terms of consumer behavior changing totally into online, permanently after the pandemic.

It didn't just happen during the pandemic. Um, that's where we started. How did the pandemic influence it? There was higher adoption. There was a higher need and a higher urgency. And those early relationships in multiple countries, um, uh, outside of my family, by the way, like these are real customers, um, they, they, they enabled us to build a level of trust that is unparalleled with any player out there in the payment space.

That has allowed us to build over the last five years different evolutions of the product that have led us into how do we leverage all their data for growth, and how do we leverage all their payment data to unlock different revenue opportunities through ai. But I would tell you that the pandemic definitely drove higher adoptions.

It drove a higher need and a higher urgency, which allowed us, well, even at Stanford, to have a niche and a PMF in Latin America, which is why we prioritize that region. Now we're focused on the us. We already have a lot of Latin America, and at the same time, it allowed us to cement the foundations of those relationships that led to trust, that led to.

Being able to listen and work with merchant to build the.

Stephen: There's that loyalty. It's just like, you know, whether it's Jiujitsu or running a marathon, there's that loyal when you struggle with others and you come out the other side together, there's that loyalty, that comradery, that like, Hey, we made it, we got beat up, but we made it. So those companies must be extremely loyal to now your brand and you know, you've all been through the trenches together.

I'm wondering, can you or you know, can you remember that one client that you're like, you know, you're going into the meeting, you're talking with your co-founder, you're like, Hey, if we land this one, this is the one that you know, we can leverage. In other conversations, do you remember that? Whether it was a meeting or a conversation or that, you know, get off the phone or signing the contract, do you remember that?

Roberto: There's a couple, um, and the business has evolved several times and every time it has evolved, it's a step function, evolution, if you wanna call it that. I would tell you that the first one was is the largest franchisee worldwide of fast food operations. And many, many countries.

They're our partners. Um, and that was the first and earliest one where we earned the trust of a very large company and a very, a publicly traded company at that. And that was very early on in our, in our journey. That was back in 2021. After that we struggled because for several reasons, but we started Thea with the vision of leveling the playing field, and our first iteration of the product was this one click checkout, which is the basis of everything that we do today.

Um. Now what we realized was you can't go tell a company just to change their checkout and get prioritized and monetize their existing users one and two. We also realized even that, uh, even if that were the case, they all have different partners in terms of fraud prevention, in terms of acquirers, gateways, processors, psps per country, and if you really wanna power their checkout, guess what? Those providers don't get integrated magically like someone has to do that work. So we built very, very advanced and, uh, flexible payment infrastructure that became the key to unlocking even largest merchants. And so the first large merchant that we unlocked in 2023. And we were like, if we win this one, this is the second or third largest movie chain worldwide in over 25 countries that that will definitely allow us to build. And that's what happened. We were in a moment, in an inflection point back then, Stephen, where we were going through a very rough journey and we weren't hitting our objectives.

We were, we actually decreased revenue after our fundraise for the first year. And, uh, I was going through a very tough personal part, like, uh, had a very long-term relationship end and like I was meeting with my investors and they were telling me like, make a bet. Bet a whole house on a two year plan, we trust you and go for it.

And the movie theater, I'm telling you, was our first large merchant after that, after that message, and it really cemented the future of what we were about to do. We didn't know it at the time. Instead of decreasing revenues by 7%, we grew the company over 24 x the last 12 months to 24 months. And yeah, we went from less than 1 % of the GDP of Mexico to about a third of it right now.

Stephen: And you know, not too many entrepreneurs, they come on this podcast and talk about the failures. Obviously, they don't wanna talk about their wins. Is there any, you know, advice that you can give someone that's going through, obviously I think anyone that's an entrepreneur that's building a big business is gonna both have professional and personal things that get disrupted.

Um, how were you able to power through it? Was it, you know, because you had such supportive investors, is it because you had maybe a co-founder that was able to help support you as well? Can you walk through any advice you give to people that obviously are gonna be struggling at some point in their entrepreneurial career?

Roberto: Totally. And in that regard, I would tell you, Stephen, that first of all. Entrepreneurship has a lot of highs and lows, and the grass is always greener on the other side. it's deeply romanticized like it is. Like everyone tells you that they want to be an entrepreneur. My co-founder and I have been through a lot over the last five years and we, we come through it and we come on top, eh, but that's not always the case.

I would tell you that nine out of 10 days you're getting hit in the nuts and like there's nothing you can do about it. And then the 10th day, it's all worth it. And that reminds you of why you're doing this of your mission. And like a lot of like very famous entrepreneurs will tell you this, that like you really have to be in love with the mission of what you're doing because.

Otherwise, the likelihood that you're not just resilient enough or that you're gonna have a crack or a weak spot here, or there is too much, and like you, unless you really believe in what you're doing, unless you're able to get your team to really believe in what you're doing, to go through those nine days, to go through those two years, those two bad years, where you can make a bet a long-term bet, then that's like, that is key for entrepreneurship.

So I wouldn't. I wouldn't recommend a lot of people to become entrepreneurs, to be honest with you. I think that they, like a lot of people really need to think about whether they even want the price at the other end of it in the first place because like, it's, it's a long, it long, much longer and tougher journey than anyone imagines at the start.

Stephen: I always say there's easier ways to make money, but this is the best way to make impact. I'm curious

Roberto: That is totally

Stephen: you're looking out, what was your existing clientele customers doing before Daya? I'm assuming it was a lot of patchwork, or were you the person that took all that patchwork patchwork and made this seamless integration so they could have, you know, the one click checkout so they can maximize their payment?

I think what you said at the start of the conversation. Really resonated with me is that you're turning payments into a competitive advantage and a revenue generator where most people are just looking at it as like infrastructure to get the thing done as fast as possible.

Roberto: That's a great question, Stephen. So let's talk about large companies, right? On airline. They work in many, many countries. So the first aspect of it is like, how do they connect to all the different providers, right? And how much effort does that require? Like you have different banking providers in terms of credit cards and debit cards in each country you operate, but you also have alternative payment methods and fraud providers in each country you operate.

So that becomes a hassle, one, to develop and integrate and prioritize. Two, to maintain, like there's also maintenance. All these providers have different updates over the, over the next few months or the next few years. And it's not the merchant's job, in my opinion, at least, to be handling all that legwork in terms of, um, the connections and the maintenance.

That's one. The second aspect of it is how do you make those connections more efficient? They have to be dynamic and flexible. How do you route in order to lower costs? How do you route in order to increase redundancy and increase conversion rates? Which payment methods do you show first? Like in the case of a specific user, maybe they're always buying with a CH and that's much cheaper than credit, than debit.

Um, so the, the, the second aspect of it is. Having a dynamic and flexible, uh, orchestration and advanced payment infrastructure engine to allow you all that flexibility. Uh, the third aspect of it is, okay, now that you have a hundred percent of the transactions of a business going through you, what are you gonna do with that?

Right? You either get commoditized and you're just building fiber networks out there, or you turn that asset. Into something that actually can drive and change the business because payments at the end of the day, Stephen, I was like the airport, you can't go. You can't get on a plane without showing your passport or your id, right?

The same thing with the checkout. You have to identify yourself. You have to tell them and where you're flying, what you're buying, who are you? Everything. Businesses today don't have all that data in one single place. It's all siloed, it's all fragmented, and they spend weeks just to piecemeal together payments, data.

Let's not even talk about marketing data or any other type of data. Like they take weeks, two to three weeks to piecemeal like different types of data for payment optimization and that that's broken too. And so I, I can tell you that like. We're leveraging that aspect of it to really drive the growth and we can deep, deep dive there as well.

But yeah, like in, in terms of the one click checkout though, that, that's on the infrastructure side in terms of the one click checkout that builds on the third aspect that I just mentioned on the latest one, which is the checkout allows us to identify our users. Allows us to extract up to 600 and almost, almost 700, I think it's 628 or 658 data points per transaction.

Um, today, uh, for the merchant's use, not for our use, but for the merchant's use. The only reason why we can do that and no other payment infrastructure player can do that is again, because of the original story, uh, I told you about. We started with a one click checkout. We evolved the one click checkout to have very advanced payment infrastructure because we listened to our merchants and we were resilient.

Uh, now. The one quick checkout also allows us to drive a, a lot of value for our merchants, because think about it, once you have over 10%, and in the case of Mexico, almost a third of the online GDP of the country going through you. You have very unique insights into whether Roberto has committed fraud before.

I can't tell you where, but I can tell you Roberto has committed fraud or that Roberto is a certain type of buyer and maybe you wanna upsell him X instead of Y. And so the one click checkout is a, became a critical aspect of how we can turn payments, data, enrich it even further, and turn that through AI into a revenue driver.

Stephen: And I think that's so important. I think I saw a little bit about what your checkout looks like, and if I'm Stephen and I love using, you know, maybe PayPal. I love using certain credit cards. Giving me an option for Alipay isn't going to be helpful, but with the data insights you have, you can almost customize that checkout for the type of person based on their behavior.

And when you think about it, let's just say that improves the payment process or improves, you know, the sale by 3% when you're working with companies are doing billions of dollars. That is a huge upsell for them. So you are, that's how you're creating revenues. Like really customizing the experience for customers so that they don't fall off so that they don't, to your point about the airport, the airport can also be very frustrating.

And I think if people didn't have somewhere to go, many would just walk out and go back home. Uh, and that's where, you know, a lot of checkouts have been frustrating and you're kind of like almost creating this experience for people that not only makes them feel heard, it's like, Hey, you know what? I wouldn't mind doing.

Uh, buy now, pay later. And, you know, that is something based on my, you know, paying or my transaction history. So I think that for people that are listing and being like, okay, one click checkout, how big of a deal? It's that, you know, those percentage changes, those, you know, revenue captures can be huge for a business, much less, you know, small companies to your point where if they're charging 10, 20% per transaction, that's a huge amount for micropayments.

Roberto: Totally and Stephen there in that regard. Like the reason why, think about it this way. You, you in the US have you experienced. Or in Canada, like shop pay, Shopify's checkout. So that's very easy to pull off because they force almost everyone on stripe. There's one vault to one processor. When you're dealing with multiple payment methods in a lot of different countries with a little lot of different acquirers and gateways, there's also a lot of fees that can be saved for these billions and billion, multi-billion dollar volume, uh, companies.

Because the optimization doesn't only improve conversion rates, but uh, to your point, it can improve fees. So like, if I already know, uh, Roberta is a user that has previously bought with a CH, can they buy with a CH in in this country? Yes. Okay, perfect. Can I enable that as a first payment option? Yes. You save 120 bips, that's a lot of money for the largest companies

Stephen: I

Roberto: on top of the experience of, uh, one click.

Stephen: those fees start to add up. If that's not their regular payment, if that's not the best payment gateway they should be using, they're gonna pay for that. Right? So you're giving them the optionality that's actually affordable or more inexpensive. Or less inexpensive for them.

Roberto: Total. Yeah.

Stephen: Talk to me a little bit about Athea. So you create a platform that's powered by AI and AG agentic, payment intelligence. What? First of all, maybe you can just give us a high level. We hear so much about a, a agents and agentic. What is a agentic payment intelligence.

Roberto: That's a great question. So we built a reasoning engine and a lot of people have like talked about how AI is gonna enable humans to perform a lot of, uh, outperform themselves compared to their past and perform even better in terms of expectations and detect opportunities now in order for that to happen. AI really needs to be adopted in the right way and onboarded in the right way into an enterprise. The problem with that is that 92% of projects in a enterprise ar are failing today. This according to MIT, this according to Garner, there's a lot of research on it, and the main reason of it is because a lot of companies have data.

They do have data. Now it's not AI ready data, and that's the biggest gap, Stephen. That's the first big gap that we solved because of the checkout and because of the payment infrastructure. The second gap is, okay, let's say that now you have that data. Can the AI answer a question? Very likely you can get it.

To answer a basic question, what were my sales last week? Yeah, but once you start to deep dive, hey. Identify revenue opportunities in X countries for these processors. Analyze the fraud, eh chargeback rates, and compare it to the network fees to avoid any additional bips penalties by the networks. Can your Chad g PT connected to the database do that?

No. Can you ask it? AIA segment, my users by LTV, lifetime value or RFMO, recency frequency and monetary order value. And analyze trends in order to increase, uh, sales for these segments. Can it do that? No. And so the question then becomes how do you turn all this data into complex and actionable insights?

Not basic dashboards or static dashboards or dumb questions that your analyst can answer that you already have a dashboard for. How do you really identify revenue leakages in real time? Not two weeks after the fact when your report finally gets consolidated and you're like, oh, this country's having a problem.

No, in real time.

And so in order to do that, like a gentech payments intelligence, how we define it is first being able to extract the data so that it is AI ready ourselves or connecting to our data sources, pre-processing, cleaning them, et cetera, in real time. And then. Feeding it into a multiagent system that can think like your team would.

Now Stephen, this is very important. We're not talking about a plug and play here. We don't over promise and under deliver we do the opposite. But in, in that case, like a lot of companies are telling you that they're trying to do that.

Now what we do is we adapt the reasoning engine. During onboarding, which takes two to three months to your KPIs, to your context, because, uh, an airline can think about acceptance rate and conversion rate very differently than a large retailer or a large telco.

We work with all the above. So that's the issue that like, not the issue, but that's something that we've had to solve so that really, like Athea can add value to an airline, to a telco, to a large retailer in a myriad of ways. Their own context to their own KPIs and to start to think like their team would, because otherwise their team has to be looking at a hundred plus countries, nine processors overall, different merchant IDs per country, and tracking everything in real time, and that will drive you crazy.

Instead, this tells you what matters why and what to do about it. And in some cases it helps you do that for you. With your approval, of course. She doesn't run around by herself at this point at least. But, yeah that's a little bit is to how we define Agentic payment intelligence.

Stephen: I think two things resonated really well. I can see why companies trust you because you lead with like, Hey, this is what we can't do right now, or This is what we're working on. Where to your point, especially with somebody with consulting experience, it's easy to sell the vacation, right? Like, hey, like you can just absorb the hype that the company has to say, we can do this and we can do that.

And I think to your point, what we're realizing is a lot of these age agentic ai. Solutions aren't doing what they say they're gonna do. And this is, you know, it's kind of like the early blockchain days, right? Ev blockchain was gonna solve everything until it didn't. And then, you know, the consultants all turned into AI consultants and kind of left the industry.

But I think that's really resonated because I think this is what we need to do. We need to set proper expectations. The fact that you said that this could take two to three months, I don't think is, you know, a negative. I think most companies are like, whew. Someone that's actually taking the time to learn what our business needs are.

So it's actually intelligence versus it being reactionary data, right? They don't wanna know that their payment slippage or they're losing money on fees three months from now. They'd rather take three months to build out something that can measure that in real time, so they're not actually losing money, which I think is important.

Uh, and I think you, you've, you've uncovered a big thing with this industry is like everyone's trying to say like airport example. Like, Hey, I'm gonna use an AI agent to find me the cheapest flight and just book that flight using stable coins. And it's like, yeah, it could do that until it gets the wrong dates.

You know the wrong dates until it doesn't click that it wants a refund or is eligible for a refund. And so you go to check your bag and realize that it got you the cheap seats on the flight and now you can't bring a check bag. And you're like, all these things are those exact reasons why, what makes the airport?

And, you know, booking trips so frustrating that these agents, I don't think have exactly been able to figure out or at least navigate, are in the works of doing so.

Roberto: I agree with you entirely, and what you're describing is allowed as to like the purchasing aspect of it. Like how does agent commerce work, although we're talking to some much just about that. What I'm talking more is how do you productize a pal here, Stephen? What does Palantir do? They send forward, deployed engineers to your company.

They connect all of your siloed and fragmented data. They clean it, they pre-process it, they connect it to their ontology layer called foundry, and then they train, um, machine learning application on top of it. Let's call it demand forecasting. That takes about a year, and then they sell it to you for million, dozens of millions of dollars, right?

What if I told you that your checkout is the key to doing that in two to three months? That's what we're after. That's what we're doing already with large merchants. And that is what very large US merchants are about to start doing with us in the coming months.

Stephen: I love it.

Is there any unique use cases? I think when you have all this intelligence and data, it's not just helping your clients. You're probably seeing some unique business. Use cases for not just the clients, but you as an organization that you could probably be like, Hey, we should focus right here.

This is the type of intelligence that companies are really looking at. Is there any unique things coming out of the data and the intelligence that you've been seeing, uh, as you're onboarding some of these companies?

Roberto: Going back to fraud, so like because of the exposure that we have to the country's online, GDP, we're starting to see the same fraudulent device fingerprints. Or the same fraudulent addresses or email addresses come up in multiple merchants. So it came up in one of the movie theaters, one of the two largest five, uh, out of the five movie theaters worldwide.

That 20 accounts were like having weird behavior, right? And then we analyzed the network that same like hour, and we realized that there was exposure on one of the largest pizza chains on like, uh, two large retailers on one large telco. And we were like, Hey, we're not gonna monetize this right now, but let everyone know asap.

Like, and that that is one of our values. We're merchant centric and we're willing to bait in the long term. So like those are some interesting use cases that honestly are arriving earlier than we thought they would in terms of insights from the network. Um, that that is very valuable. That's one, two. I would tell you that there's a lot of people that have tried to buy the data, like networks, ads, like the largest scalers you can think of one, you can imagine who I'm talking to.

Stephen: that marketers would want access to that data.

Roberto: We're not selling the data and like that's what I've told everyone, and the idea is that we give that data in the form of actionable insights back to the merchant. And that's the real purpose of Athia.. Now can, can we learn from it? Yes. Hundred percent. Can we share abstracted insights that help everyone network? Yes. And that's, that's something we're starting to do.

Stephen: That makes a lot of sense. Someone, uh, you know, I'm a blockchain investigator, crypto compliance. I've done a ML for banks. And one of the thing when it comes to fraud is exactly that. A lot of the, not to a lot of the RegTech companies are really great, but they focus on a very subset. So if you're only focused on how to do you know, compliance or RegTech or transaction monitoring for crypto exchanges.

You're only seeing a portion of that customer activity, whereas what you are seeing is like, Hey, this movie theater, the people that are ordering the food, there's all this fraudulent activity that could be maybe the same organization or the same exploit. I think you have a lot more range and data that you're seeing into other areas that maybe these individual RegTech products can't see.

So you probably have a lot of advantage where you have this kind of like holistic view. And I know we haven't even got to stable coins in depth. But I think as we start seeing like stable coins like Tether and USDC, they have a responsibility on onboarding, but once it gets out into those secondary markets, there's kind of like an ecosystem risk that you start to take on of what, what are the criminals doing?

So I think that data that you have and that ability to see holistically, not just maybe from the crypto side in the future, but also the traditional side is gonna be huge.

Roberto: Totally. And like if you think about it, like a lot of the fraud providers out there that you've worked with depend on what data the merchant is sending, which is not a good thing. Two, they depend on like the amount of transactions the merchant is sending. In some cases, they don't send a hundred percent of the transactions, they send the highest risk transactions, right?

The third aspect of it is, is even the payment wallets, like let's all call it a PayPal, they only see the PayPal volume for that merchant. Right? They will see PayPal volume across merchants. Yes. But in our case. We see a hundred percent of the transactions for all the business, and we extract the data ourselves.

We device fingerprint ourselves, so that allows us to feed all that into an agent intelligence platform like aia, and she can start to think for you. She can connect the dots across systems and fraud and operations and marketing to deliver those insights without like, or, or with a lot of context. It allows your payments to start thinking, right?

Um, instead of, uh, of handing you raw numbers or an Excel, she explains what is happening and suggests actions. If, uh, you need to analyze acceptance rates by country or provider, she drop the full playback in seconds. Um, she'll flag those vulnerabilities that you're talking before they become losses, right?

And it before those opportunities slip away. Not two weeks from now, but actually in the moment. And what we're trying to do here is not to replace teams? No, not at all. We're trying to empower teams and to a lot of these teams actually have access to all the data so that they can on it in real time.

Stephen: Well, we can't talk about ag agent payments or even payments now or the North American market without getting into stable coins. What are your thoughts about stable coins? I know probably once, once you to say have an episode like this, I'm sure there's gonna be a lot of stable Coin issuers knocking at your door to IMP to integrate with the distribution and the ecosystem that you've built.

What are your overall thoughts on stable coins and where it for fits into DEAUNA in the future?

Roberto: That's a great question. So. Again, we're, we're merchant centric, one and two, we're very focused on the long term. Now the reality is that we do have the checkout on the largest merchants in a lot of different countries in Latin America already today and starting in the us. Um, now how can we enable distribution, which is the key aspect of stablecoin usage, which is preventing massive adoption. That we can enable very quickly how we have the relationship with the merchants. We own their checkouts. Like of course we can't enable it without them, but like we can set up those, uh, those relationships fairly quickly in order to enable stablecoin acceptance in these checkouts seemingly in a couple of days.

Um, and we've been approached by some of the largest stablecoin providers out there. Especially because of Mexico in that they're looking in order for their stablecoin to be the one that gets adopted by the merchants. And in that sense, like we will be able to work with one of them when the time is right and when the incentives are aligned and when the merchants really need it right now, like the merchants are not pushing for it.

And we're in a merchant centric org, so we're gonna push for whatever adds value for the merchant now because of my roots. I am, uh, like I'm very big on crypto and I really believe in the future, so I would tell you that it's, it's gonna happen sooner rather than later. That we actually go into the stable Coin play and we enable stable coins for a lot of these merchants so that it is widely accepted.

Which one? I can't tell you, um, right now at least, but that it will happen. It'll happen in the next couple of years.

Stephen: how could you be a consultant? You're supposed to push on the merchants. What? They don't know what they want. You're actually listening to them and I love that, right? Everyone's trying to push stable coins. 'cause they know that will start a conversation with a lot of these merchants where you're like, Hey, when it's their time, they'll come to us and we'll already have the relationships already with some of these stablecoin conversations to implement.

I'm curious.

On your website you have something called incident response where it's incident simulation. Where you can like test, you know, the client's security policies and correct vulnerabilities. Can you talk a little bit about this, because that seems almost like in the traditional cybersecurity world, almost like pen testing or creating, you know, even in crypto, kind of like the the beta side of before you go on the main net, your test on the testnet.

Can you tell me a little bit about your incident simulation and how companies are using it?

Roberto: So in terms of incident, uh, simulation and response management, like we, we take very seriously everything regard in security, right? Like especially with the amount of volume that is going through us and the amount of data that is going through us and the trust that that represents in terms of our merchants.

Um, so we take that very, very seriously. In terms of like what we do in, in those aspects, we allow merchants to analyze and plays a role. Now, it didn't before, but now it's starting to play a role to analyze what if scenarios in terms of, uh, different rules that they can enable for transactions to go through or not.

That is one aspect of it. Another aspect of it is what we do in terms of internally, which is related to like all of our cybersecurity certifications, our pen testing. We do that on the regular. We're very strict about that aspect of it because of what it can represent and how much trust it can erode.

Like Stephen Trust requires years to build, but it can be destroyed in with within minutes. We take that very seriously. We didn't work our asses off for the last five years to drop the ball, uh, one day out of nowhere. So in that regard, like we take it very seriously and we allow merchants to one, test the rules that they're doing with lower volumes.

Um, and also we are very enterprise grade in terms of what we do for cybersecurity certifications. certifications, what do we do in terms of rollouts, how do we do our rollouts in which countries in terms of percentages of volume, et cetera, so that we can guarantee that what we're doing will not erode trust.

Stephen: And I think that's attractive to a lot of, you know, especially merchants where they're new to maybe some of this payment technology that they can actually try it out a little bit, see what it, how it reacts. 'cause once you turn on the switch, once you do all the transactions, it's kinda hard to turn it off.

So you have to kind of see what it's gonna look like.

I'm curious, as we, you know, we PR get into Q4 here and what seems to be a lot of momentum, especially now you're in the US with payments, infrastructure, mergers and acquisitions, uh, stable coins, digital assets, what do you, ai, we're seeing conversations at the White House with some of the biggest AI leaders in the industry.

What are your thoughts about where the payment industry goes in the future, especially out the next few years when it comes to AI payments and even crypto?

Roberto: You want, you want the solid truth.

Stephen: Where do

Roberto: payments is gonna,

Stephen: have, you have

Roberto: I think it's gonna get increasingly,

Stephen: views.

Roberto: it's gonna get commoditized much faster than the players in the space are looking at it. At the bottom of it, we're a checkout and an orchestration company, and we're driving commoditization of it, like, to a certain point, but the industry's also driving commoditization of it.

And stable coins are definitely driving commoditization of the payment industry as we know it. Um, so in that regards, Stephen, I can tell you that I don't know if it's gonna take two to five years, but it, it payments will be less of a. Money generator for payments companies, it will become more of a value added service plate.

And you're looking at that already with an alien or a stripe, for example. Like, I'm not, I'm not saying anything new, but I'm pointing out the, the drawings on the wall that no one is calling up. But like some of these players are going into non acquiring solutions. They're enabling you to sell, or like they're enabling parts of their infrastructure even if you don't process with them, right?

And so that is starting to tell you that something's happening and something's changing. A lot of these companies are also buying stablecoin providers or stablecoin infrastructure providers, right? So they're seeing the drawings on the wall here, like, and they're acting on it. Now, why are we uniquely positioned in that aspect?

Is. We made that bet years ago. We don't drive our revenue from payments. We're like, we don't process. We're not the merchant of record here. We connect everyone and by being the connector of everyone it we are seeing how important it is. Actually drive those value added services in the terms of, in the sense of reconciliation subscriptions, the basic ones, three Ds, network tokens, account update, all of those.

Those are very important and I think that those are gonna be the value drivers in the payment space. Now, that is not even our vet. Our real bet is all that payment infrastructure that we're we built already is really a Trojan horse to earn the trust. And once we have that trust. We can show how we can add real value, not uh, through a three Ds or a network token, but real driver in terms of actionable insights that become the growth engine of the business.

And I think that as more and more time comes along, what will happen is that the importance of complex value added services will be larger, especially for the payment players that you see today. AI and stables are just gonna drive that faster. Anyone can see it.

Stephen: Do you see this shift? Like you see about like Tesla and they're like, oh my God, the cars. The cars. And it's like, well, not really. It's the data, right? If ta, if Tesla's tracking all your movements where you're buying it, same thing with Uber. Do you see, and, and now we get into payments where it's like, okay, we're making a margin here, but this data's almost more valuable than the payment infrastructure.

Do you see more of these companies moving into like monetizing just on the data alone? Because they've already built that infrastructure, the relationships, and now had, they have all this consumer data, especially with ai, right? We're not gonna, we're just gonna ask the ai, what's the best way to get to here?

Where's, you know, what am I AI's gonna tell us what we're probably gonna, we already see it, right? You go in your car, you flip on your phone, and it tells you where you should be driving based on the last five times you got in your car and drove there. Is that gonna be the monetization and all these other services?

To your point, just gonna be a value add.

Roberto: There's two aspects to your question. The first one is, I'm gonna go straight into it and then I'm gonna answer the second part of it. But the first one is, according to your example, these companies already know your five last destinations. Then they can give it to you, right? Um, in a, there, there's. The first aspect of it is the type of company you're talking about.

If it's a consumer company, then they'll probably try to monetize the data, right? Like consumers become the product. In our case, that is not true. Like in our case, we work for the merchant and the data is for the merchants use. And yes, we can leverage the network for the merchant without telling you how we got that information.

Um, so it's abstracted out. In that case, like some of these companies that are more consumer ended might decide to monetize the data, uh, in the case when it's enterprise. Like, let's ha let, let's forget about the owner here. Let's call it your ERP. I don't think your ERP should be selling the data if you ask me, right?

Um, the second aspect of it is. Data's a mo. The fact that they already know your last previous destinations allows them to offer you a different user experience. And that compounding over time with ai, that will be a differentiating factor that will allow these companies to monetize in more ways than just selling the data.

And that is what we really believe, and that's a data mode. Um, and the capabilities that we have today, Stephen, we wouldn't have. If we hadn't gotten through, gone through the journey over the last four years, onboarded billions of dollars in payments, volume, multiple, like a large portions of the online economies of several countries, and now I can tell you that we have the capabilities and the right to win because of that, what we built.

And I think that. Just like we experienced that there's a lot of other companies that are gonna start experiencing that or already experiencing that because data will allow you to build capabilities that cement your position and differentiate you.

Stephen: Yeah. That's beautiful. This was such a great conversation. Any exciting announcements? I know you know, you and the team, or at least the team will be at Money 2020 in Las Vegas by the time this airs, uh, near the end of October. Any other announcements coming from the team?

Roberto: There, there's a couple of new hires in the US we're not disclosing at this moment, but they're gonna make a splash for sure. Um, very veterans in the payment space. Um, and we're also opening our offices in New York, so yeah, that, that's, we'll be at, at money 2020. Uh, I can tell you those three announcements.

Stephen: I love that.

Maybe a little entrepreneurial insight. What do you look for, right? Because you're building something where trust. And you know, relationships is huge, but you're also an entrepreneur. You need someone a little bit entrepreneurial to navigate the US or any market. What do you look for someone that's more of an entrepreneur and builds things like everyone's using this like recent, I think it was Starbucks, like the CEO didn't have any entrepreneurial experience.

You lost $40 billion and then the next CEO, you know, got $20 billion in valuation overnight because he was an entrepreneur and an operator. How do you manage those two things? When you're building the type of business where, you know, data's a moat, you need entrepreneurship, but you also need someone that has significant, you know, respect and trust in the industry.

Roberto: That's a great question. So. I, I think that a lot of it is personality. You can't teach personality, and I've learned that the hard way, by the way, experience is very important, but, and that's why it took us a long time to make our first hires here in the us Like in terms of go to market, we, we have team in terms of payments, products, et cetera in the us but in terms of go to market now that we're like already starting to work with US merchants. That the, what we were looking for was very specific personality traits that are drivers for accountability, for being hands-on, for earning that trust, um, and more importantly for having those references that in the past they haven't over promised and underdelivered. And some of the Fortune 50 companies in the US sent referrals for the people that we hired, and that gave us a lot of visibility also as to, okay, these are veterans that, uh, have the personality traits.

We filtered for that, but they also have the trust, which for us is the most important aspect of anything we do. We can't lose trust.

Stephen: Yeah. That's amazing. Where can people find you Reks? What's the best place? I'm assuming you do a little LinkedIn, maybe a lot of Twitter in the payment space, maybe a little crypto Twitter on the weekends. Where's the best place for people to find you?

Roberto: we're, we're doing more Twitter nowadays, uh, starting to do more and more Twitter. Uh, I had to change my account from the crypto, so you're not gonna find a lot of me, or maybe maybe you,

Stephen: yeah. To not

Roberto: but Twitter or LinkedIn.

Stephen: tokens that you're in the hole for.

Roberto: Yeah, for sure. Like there's a couple of those, but, uh, no Stephen, Twitter or LinkedIn for sure.

And like we we're definitely around in Monday 2020, so if anyone wants to meet in person like myself and the team will be there.

Stephen: Awesome. And you know, a little exclusive. We might be out there too for the, Around The Coin than just me and the team personally, so it'll be great to meet in person.

Thank you so much Roberto, for this conversation being so honest about the payments. Like we have a, you know, this podcast is mostly for the payment tech crypto person, and you were really honest about the realities of what we're dealing with.

Not over promising, I think is a huge one. And just over-delivering, I think it's gonna be important, especially when we start coming into the buzzwords like AgTech, uh, payments intelligence. I think you really level set what the industry should expect. It's not gonna happen overnight. Uh, even when you're building with your.

Uh, merchants two to three months of really learning what they're doing and, you know, what's the exact data that they want, I think is gonna be very important going forward in this industry.

Roberto: Totally Stephen. I think that that is the most important, listening to the merchants, building the pieces so that you can act quickly whenever they do need it. Having that foresight, but like doing it, doing the prioritization according to their needs and wants. And that's something that we, we've done. I, I think we're uniquely positioned to take advantage of any stable Coin movements.

And there's a lot of them already talking to us. We need to choose a partner right now. Um, and the second aspect of it is on the AI side. It's, it's not about enabling AI to tell your CEO, you enabled ai. It's about driving outcomes. It's about driving value, and that's why 92% of the companies are failing.

They're over promising and underdelivering in terms of project implementation. We were able to build AIA for over two years. So we tested all the outputs before we took her to market, and just as of last month, we started signing our large, our, our large enterprises for the first time.

Like we hadn't go taking her to market publicly. Now we are onboarding right now, full, real, unique, different merchants that we weren't working with before.

Stephen: I think that makes sense. Yeah. And now have a actionable use case that you can show people. You can show where the challenges were, what the challenges, versus like, we've built something now let's go test it out with new customers. I think that's important and what adds to the trust. Roberto, thank you so much for today's conversation.

Roberto: Thank you, Stephen.

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