Really fascinating chat with Matt Frye on the evolution of the payment processing industry and how your dollars move from Point A to Point Z in our seamless and often-taken-for-granted world of convenience. If you’ve ever wanted a little bit of a behind the scenes look at how the fintech and payment processing industries operate, this is a great one to watch!


Aaron Spatz  00:05

You’re listening to America’s entrepreneur, the podcast designed to educate, entertain, and inspire you in your personal professional journey. I’m your host, Aaron Spatz. And on the podcast, I interview entrepreneurs, industry experts, and other high achievers that detail their personal and professional journeys in business. My goal is to glean their experiences into actionable insights that you can apply to your own journey. If you’re new to the show, we’ve spoken with successful entrepreneurs, Grammy Award winning artists, best selling authors, chief executives, and other fascinating minds with unique experiences. We’ve covered topics such as how to achieve breakthrough and business, growing startups, effective leadership techniques, and much more. If you strive for continual self improvement, and enjoy fascinating and insightful conversation, if the subscribe button, you’ll love it here at America’s entrepreneur. We’re gonna jump right into this week’s program. I’m super excited to welcome to the show, Matt frei Matt is has had a career in FinTech. And he’s currently the founder and CEO of company called card now. And Matt, I just want to welcome you to the show. Thank you so much for being here today.

Matt Frye  01:17

Thanks for having me here. I’ve been watching lots of your interviews, but I’m really I’m excited to be here.

Aaron Spatz  01:21

Thank you. Awesome. Yeah. Well, I’m excited that you’re here. So yeah, so you’ll probably know at this point. Now I love to lead off with with the famous question of where the heck are you originally from? Were you a DFW native or

Matt Frye  01:32

I’m actually from Ohio, Cleveland. So I’m a Browns fan living in DFW, which is an interesting sort of juxtaposition, but I’ve been in Texas, moved down here in the 80s. And I met my, my wife at Austin. We were going to school there and we’ve been in Dallas. This is like five, six years now. But it’s like the third round in Dallas. So okay, Plano for a little bit, Frisco. And then now we this recent state we actually live in the city. So

Aaron Spatz  02:00

Oh, man. That’s terrific. Well, first about about the Cleveland area. So my father my entire flight father side of the family is from the Cleveland area from Cuyahoga County, so very good diehard browns, Indians fans, obviously, the Cavs and all that so you know, there I’ll tell you what they put together a heck of a season this year, the Browns

Matt Frye  02:19

did. I am very excited about what’s what’s ahead. I’ve not been you know, you mean no playoffs and so you know, 30 years it feels like but that was a good that was a good season. Hopefully next year. I’ll keep keep it going. Yeah, so

Aaron Spatz  02:33

before I lose too many viewers just just hang with me for a second. Okay, we’re gonna we’re gonna talk about no like, I want I want to talk football for a second. So like, sure. Do you think what do you think the Browns are going to do in terms of offseason moves to get them better position for 2021?

Matt Frye  02:48

I think JJ Watt is going to sign with them. Man, that’s a rumor and sort of a rumor in Cleveland that they’ll pick him up. And now I mean, I think if they get obj back and he’s playing now that you know they’ve they’ve actually established the offense without him. I think that he could fit in as opposed to being sort of the diva. And they had so many injuries last year. I mean, even in the game against the chiefs, you know, they were they were out a couple, couple defensive linemen and offensive linemen and one of the safeties so. I mean, they have it they have a really good fit squad. I think so. Yeah.

Aaron Spatz  03:19

Well, well wait, see, when I lived in Houston, I was a big JJ Watt fan. So it’s crazy to see that he’s gonna be picking up a movement. We’ll see. We’ll see who gets them. So I guess we’ll have to guess what, just

Matt Frye  03:27

all? I would like that. And I would like that very much.

Aaron Spatz  03:31

Why? Well, let’s let’s dive into your dive into your story. So you’re, you’re a guy of many talents. You’ve, you’ve you’ve been through a ton of different businesses and lots of different ventures. And so I love to just kind of understand from you, I’m gonna kind of ask you like a really open ended softball question. But like, what kind of got you started in business in terms of like, the entrepreneurial bug, cuz I’m seeing that as like a little bit of a theme in your career. It’s, like, I realize it hasn’t all been owner and founder, but a lot of it has, there’s been there’s been a pretty mixed bag of things that you’ve done. So like, where did that come from? Like, where was that burst?

Matt Frye  04:06

So, you know, the early, early part of my life, I was in the restaurant business, I actually was a bartender it through through most of college, and then one of my primary business partners, he was my roommate, and we bartended together, and we sort of got into the the FinTech business, you know, very early on through doing like ATM processing, and sort of selling credit card services and things like that. That’s how we sort of learned it, but the early days being in the restaurant business, you know, just having to shoot from the hip all the time and sort of this chaotic sort of environment that happens on a Friday night or a Saturday night and to be able to get through it. You know, it’s it’s hard to replicate that and Acube it’s hard to hard to replicate that in a traditional business setting. So you know, putting yourself out on the edge and You know, being an entrepreneur putting maybe your own equity at risk, certainly putting reputation and, you know, sort of livelihood at risk, it’s, it gives you that same sort of feeling. And I’m, and then I never really knew this early on, when I started started to get into FinTech, I really like to build stuff. I don’t know where that I don’t know if that’s where it comes from the same desire for the sort of the high of, of building of building businesses, but I actually like building product I like I like, creating new services or stitching things together in ways that other people hadn’t in the past. And so I’ve, um, I’m dangerous enough to be in the technology realm, and sort of be part of the dev team and drive engineering and certainly, the product of the marketing pieces. So all the hats together, you know, I’m able to influence whether it’s something that I’m doing myself, or whether I’m part of a bigger team, I really like to be able to see the end result sometimes if you’re just admired in a really large corporation, and you’re just you know, one of the one of the many cogs it’s hard to see what you’re actually working on, definitely not see it come to fruition. Some my career, I would usually end up part of a smaller company gets swallowed up by a bigger guy, and last, not too long, and get frustrated with that being able to see things to the end, and then go back small again. So that’s typically been my career.

Aaron Spatz  06:29

That’s interesting. Yeah. And so you know, like, you’re, you mentioned being a builder. And so the way that I interpret that is not like not just the product, but like, you enjoy the thrill and the challenge, I think of having to create something, and you get it out to market, see what you see how the market receives it, you know, what, what kind of development strategies? Do we have to watch it grow, and then go do something else and kind of start that process over? So to me, I, again, I could be, I could be way off on this, but just hearing your talk, it sounds like for you to stay somewhere for a super long period of time to keep sustaining it forever, would probably you probably get a little disinterested or bored with it after a while you want to, you’re constantly looking for a new challenge.

Matt Frye  07:12

It’s hard. Yeah, I like I like challenges I like to be I like to solve problems. And sometimes you solve them, you work yourself out of that, that sort of environment. And I mean, I’ve been lucky enough, there’s been quite a few roles where I’ve been asked to, to lead change within an organization or help merge merge companies or sort of be on the frontline of acquisitions and things like that. So that would definitely keeps you keeps things fresh. But But then you’re sort of doing it for somebody else. And so that that also loses its luster after a while you want to try to do it on your own

Aaron Spatz  07:47

for sure. For sure. No, I totally understand that. The let’s let’s dive real quickly into just fintech. So for for those like myself, who are not obviously, you know, as well versed in this industry and technology, the way that what I hear you describing it as FinTech being the backbone of how, in the way that you described, it was a lot of like, the payment processing portions of business transactions, is that right?

Matt Frye  08:14

Correct. And, you know, it used to be the guts behind the scenes of, you know, banking infrastructure and credit card processing, the sort of the pipes that were required to do stuff like that, but now, it’s, it’s a product business, you’re building consumer facing tech, that is that you’re sort of exposing the guts and making it fun to interact with it. I mean, you know, Robinhood has got some bad rep lately, but it’s stuff like that, and just sort of enabling retail trading at a scale like that, who would have thought that that’s, that would even be possible, but they sort of, you know, turn these trading platforms into, into sort of expose services that can be embedded in things like, like, like apps and other banking services, and it’s a, it’s, I, I’m still thrilled every time I see somebody turn what is sort of a mundane backend service into a consumer oriented value prop and they’re still, you know, how you insurance companies there’s insure tech and mortgage Jack and fintech and there’s there’s there’s all these texts that are lining up to sort of revolutionize what is what is mostly owned by big banks and sort of part of their revenue stream, but now sort of democratizing it out to smaller players to be able to Sure.

Aaron Spatz  09:31

Well, yeah, I mean, and you hit on a good point there too is because let’s just be real It doesn’t sound like it’s the most interesting and exciting journey to be on in terms of like, okay, you know, I I want this payment again, I’m being an outsider to the industry. I’m gonna sound like such an idiot when I’m trying to describe this but like you’re trying to get a payment process from maybe a point of sale system, and the whole journey that that you know, that all that goes through in order to get to your bank account. There’s a lot a lot Hopps, there’s a lot of places where things are having to happen behind the scenes. And so a lot of what you’re doing is not very glamorous, right, but it’s very, very vital in order for business and for commerce to continue to happen. And so it’s like, let’s go back then to a little bit more towards the start. So you and your, you said, you and your roommate were bartending together, which I think is awesome, by the way, but then you but then you’re you’re moving more into into fintech. So you guys got exposed to that. Tell me then like, your first couple stops into the industry and what you learned and where in where you were starting to take, take some technology,

Matt Frye  10:35

the first the first real business that, that I got into out of the restaurant business, so I ended up owning restaurant Oklahoma. And, you know, I literally left the restaurant and then worked for this bill payment company in sannan. San Antonio. So we were doing this is back in the late 90s. We were doing bill payment transactions from from home banking sites. So you know, back when we were really still wrote checks, there were a few homemaking sites where you could actually, you know, pay your bill directly, but much like what I was just talking about, where you know, FinTech sort of expose this, the services, still behind the scenes, it’s still is it’s ugly. So most of those services where you’re doing bill pay, they’re still writing checks, they’re just reading drafts off of your account. And it still shows up in a lockbox, for somebody to process. So it’s not any faster, it’s maybe easier for you because you don’t have to write the check. But we were trying to, we were trying to connect the two together, though. So we would work with the builders, to create electronic connections to these aggregators that had all the home banking sites, and instead of more of these drafts showing up at the lockbox, we could we could settle electronically, and with remittance data electronically. And so that was my first exposure to you know, sort of on scale. And I went back and got my MBA and became a, I was a product manager sort of getting learned through, you know, responding to RFPs. And, I mean, sort of building out a set of broad product documentation, sort of in response to these RFPs that we were doing for all these businesses, all these builders that were looking for services like we offered. And then you know, one thing led to another and sort of got exposed to the partners that we worked with and got to work with them more and sort of understood more of, you know, the upstream of these payments and the downstream of them and you know, all the other participants in the chain and ended up working at another bill pay company in in New Jersey for a little bit. We got that sold. And that that’s sort of started that process where I worked for a company that we sold, that I would take that experience and move to something else. And I worked for a bank one here in Dallas for a couple of years, where we were trying to build our own bill pay services for our own Treasury clients. And then chase bought bank one. And I use that to spin it into another another opportunity and the what set me off into the the card now business that I have today, we started my partner and I who we go back and forth, like, he’ll go somewhere and I’ll follow or I’ll go somewhere, and then he’ll follow us. There was this point and back in 2005 2006, we started a company called Pay Junior, okay. And pay Junior that was a little ahead of its time was before the iPhone. But we had a churn allowance management system for parents, oh, wow, to to manage, you know what the kids are in based on what they would do. And then we had a prepaid card. So this is before prepaid cards were sort of as mainstay as there are now with all the different use cases. But back then, we had a visa bucks card that’s a visa had a program specifically for teens. Then we had a target card for kids that were under under 13. And we could push them parents could push money based on chores being done, but it was all online. And the app there are a couple providers now that are doing it really well today with those kinds of programs. And the app certainly helps executing that show while we were doing that business we had we found a little widget with a front of vendor in the UK that was doing software where you could upload pictures to the face of the of the credit card. So we were handing out prepaid cards to teenagers and then we allowed them to put whatever picture they wanted on the front of it so the logo of their favorite team them and their friends at the at the baseball game or whatever. And then that’s what we turned into a gift card business. It was that little widget that we found corporates wanted upload their logos people wanted to put family pictures and hand out gift cards with with for more custom feel as opposed to just the silver Visa card that you can buy At the grocery store. So we pivoted, we turned away from PE Jr turned it into a gift card business. That’s what we ended up selling to Blackrock network back in 2014. And that’s how I learned the retail gift card business. And that’s what card now sort of is. So there’s a bunch of stops in the middle there. Yeah, I worked at visa for a couple of years worked at a prepaid processor down in Jacksonville, Florida for a couple of years, we sold that to US Bank. And I worked at a check guarantee company that mobile you take a picture of a check and literally cashed checks over your phone, not just the Mobile deposit that we do, where but actually like guarantee and cash a check and have it have the money pushed to your your prepaid card we were doing doing that in a company in Atlanta for a while. So I just popped all over the place, but you know, always parlaying whatever I’ve learned into something else and taking and taking a relationship with me. And, you know, usually there’s, there’s a, there’s a network of people that have been in FinTech for a while that you can leverage, you know, there’s always somebody you can call to solve a problem, especially if you’ve been doing it for as long as I have.

Aaron Spatz  16:14

Wow. No, I mean, like, you’ve got, I mean, you’ve got a ton of different different experiences in the way it’s gone. And, and not just that, but also seeing the way that the company would be purchased. Right. And so going through the, the, the acquisition process, so like, I mean, going back to just picking on say like gift card comm so you I mean, you. So you’re a founder there so

Matt Frye  16:40

then bought that, right? So we had a junior and we pivoted to card lab was the name of the company that we pivoted to, okay, because, you know, the lab we have the sort of just this animated videos of you, you know, putting the car through this little like, like when you paint your car, you think of the mechanics around painting cars and the car going through that you’re building, you’re building your car design and sort of allowed to build the car. Gift card.com was the guys just had the domain. And they they were they were trying to find somebody to buy it. And when we had card lab, it made sense. So we bought that domain and we were selling our custom gift cards on gift card gift card calm and gift 100 Gift Card. There we have lots of properties where we’re sort of parlaying volume and traffic into sales and sort of finding new audiences and the the b2b part of it selling to businesses was really the most attractive thing to Blackhawk. When they came along, they were looking for incentive card solutions and platforms. And we had a we had a really cool widget that they wanted. Wow.

Aaron Spatz  17:49

So then so then get you sold that and like you guys were bought out from that experience, and then you just didn’t just move on to the next thing.

Matt Frye  17:57

I you know, I stayed the black bar for so for like three years. So that’s that that’s a probably the most enjoyable three year stint, as I was mentioning before that, that was the job where I was able to be on the front line of many other acquisitions. So we were our company was the second purchase the Blackhawk made, I sent in in about about a six month period. And then over the next three years, they made another 15 purchases, only cow. And and I was I was involved in almost all of them. It was so that was a lot of fun.

Aaron Spatz  18:31

Okay, so then let’s let’s so let’s, let’s put it there. So Talk Talk me through what made the companies that were purchased, what what elements about them would make them an attractive target. And so like, what what were things that you were looking for, when you’re when you’re kind of looking at different opportunities.

Matt Frye  18:51

You know, the number we were public company. So the number one thing is looking for a creative EBIT, because we were sort of on this on this treadmill of turning out really good earnings, and we had to continue that. But that the Black Hawk business is it’s a, you think the Roxy that you see at the grocery store or CVS with all the gift cards, that’s Black Hawk is that they do that that’s their core business. And so they have this huge catalog of content, and they distribute it in retail, like you see, but they also distributed digitally for for incentive programs. So you trade in your miles for gift cards, your points for gift cards, you fill out a survey and you get a gift card, things like that. These are these are other delivery mechanisms for that same catalog. So we were always looking for other platforms that needed that content. And we would vertically sort of wedged ourselves into those markets by buying a platform that did the delivery. So you know we were able to feed that platform our own content. So there was it’s a creative because there’s more volume, but then also sort of establish a beachhead in what potentially was sort of an emerging competitive landscape on on on the platform side. So rebate platforms and channel incentive platforms that incense salespeople, and manufacturers, incenting, incenting retailers, you know, all those, those, those platforms exist and they all they need that value they need that, that whatever that reward is going to be employee recognition platforms where the HR managers are looking for ways to motivate staff and, you know, there’s there’s lots of ways to deliver that. But usually at the end, there is a reward of some kind, you’re trading in points for a gift card. So we we bought all those, we bought employee platforms, rebate platforms, incentive platforms, and you know, all along, there was more volume as a result. But then it also just became more to manage more stuff that we weren’t necessarily great at. And it it took a toll and we ended up with and I mean, there’s, they’re still out there, I mean Blackhawk The reason I left was because we got, we got bought a Blackhawk silver, Silver Lake is a huge private equity. They actually took Blackhawk private, and then that was in 2018, I think. So it’s been a couple years now. And they’re in the midst of trying to really finish the integrations of some of those some of those platforms, and there’s still a ton of synergies that they can get out of that out of that business. And then you know, they’ll flip it and do something else with it. But that was a big, I was like $4 billion, like, that was a big number holy cow. Silver, like is, you know, they’re big, they think several like owns the majority of EMC and Dell, and they own like ancestry.com, and a bunch of other some big, big enterprises. And so this was a, this was a different for them. But perfect fit, because it was, we had all of this bloat, and, you know, technical debt, if you want to call it that, that really could be unified, and but we just, we need a time to do it and being listed on NASDAQ just does not give you time to do it. So Silverlake smartly looked at it and said, there’s a lot more value here. And so let’s take it, let’s fix it. Let’s do some things for the next 234 years, you know, however long it may be a little do for another couple probably. And then though, maybe selling pieces or spit it out again, in public or something?

Aaron Spatz  22:32

Yeah, man, like, I guess I just I didn’t realize there’s so many different bits and pieces to this entire to this entire industry. Like there’s, there’s a ton of as you’re describing, like the rebates and the payments and employee recognition and customization and like there’s just, and that’s just I mean, we’re just scratching the very top of this. And there’s just there’s so so much that goes into all that. So yeah, I mean, that’s absolutely insane. I’d love to hear more. And I think it’s a great group pause point here. But you know, when we come back from break, I like to just kind of, again, kind of Rewind, zoom out for just a second and then zoom back in and take us through the journey of $1. Like electronically, like as where as someone like product goes to process a payment, whether it’s through like, you’re paying your water bill with the city, or you’re paying, I don’t know, a car payment or so I have no idea. But like, if you have like, I’ve got a good example where we can Okay, all right. Yeah, yeah. All right. So let’s, so let’s, let’s, let’s watch it because I think it helps those of us that aren’t experts, or really well versed in this industry, kind of understand, all the different things are going on behind the scenes, because we just take it all for granted. I mean, really, we just take it for granted. So anyway, we’ll cover that here in a second. So incredibly grateful for our all of our amazing sponsors. And so I’m actually going to do something a little bit different today that you’re used to me plugging a certain company or somebody who’s sponsoring. So I just want to take a minute just explain to you the different sponsorship opportunities that do exist, I’m gonna throw my email up here, so you don’t miss it. But so, again, if you have any sponsorship inquiries, feel free to drop me a line podcast at Bold media.us. But there are different opportunities, I’m only showing you a very small amount of the different ways that you benefit as a sponsor. And so if you’re curious about sponsorship, there’s a couple different ways that we can do it, whether it’s a pre roll ads or something it’s baked into like that intro video, and maybe we do a this episode sponsored by dot dot and so we maybe do a quick little spot for you there on the front end, we always we obviously have the mid roll. What’s really cool about that though, is it’s baked into the show so as you see like I’m doing this live like this is all this is all all in one take. So this ad will be baked into this episode forever. There’s no going back and dynamically pulling ads and RE and RE inserting them into some into some other show. So once once you got it it’s yours which is which is really really cool. And then of course we’re we’re developing a subscribers list for in terms of emails so like the newsletter for the podcast, getting your name out there as we start to feature different guests Some different different interviews and different information that’s available to us. So there’s a lot more than that than what you’re just seeing right now initially. And so again, if you’d like more information, we can have a much longer conversation about this. But drop me a line podcast at Old media.us. I would love to help you grow your business and get your name out there on DFW is premier business business show business podcast. So this is a great, great place to do this. And so anyway, I’m incredibly thankful for you for sticking, sticking around and for listening. And I just want to jump right back into it. So. So Matt, let’s, let’s do that. So take us through a little bit of the journey of $1. Right. So you know, I’m, I’m going to go pay my like my city water bill, which I have, like auto pay, but I in that may not be the best example. But take us through an example of how all these different parts of pieces are interacting behind the scenes from, from me to the bank account of whoever I’m paying? Sure.

Matt Frye  25:49

I think the there there’s the there’s a couple of examples, but I think the one that’s sort of most prevalent nowadays, like DoorDash, right? Okay. So if you if you have a DoorDash account, you are you probably have a payment method tied to that DoorDash account. So I mean, it could be a credit card, it could be PayPal, it could be could be your Venmo account, it could be it could be a bank account, potentially, I don’t know if they actually accept just sort of bank accounts as a draft. But when you are when you authorize a transaction through DoorDash, they’re getting there, they’re going to your bank and saying, does he have this money, yes, put a hold on it. But that cash doesn’t actually get to DoorDash, probably until two days later. So everything is still delayed behind the scenes, but at the at the very least what DoorDash has done is they’ve authorized that we’re going to we’re going to get Aaron’s money, so we feel confident, we’re gonna get it in a couple days. So let’s go ahead and proceed with the order with DoorDash does is DoorDash is gonna then go find a driver to go pick up your order, they have to pay the restaurant. So they you know, they don’t they’re not, they’re not tied directly into the restaurant system. All they do is they pull up menus, and they do have sort of technology to you know, something’s out of stock or something like that. But for the for the most part, what they’re what they’re actually doing is that driver has a prepaid card. In most cases, this is sort of out of work. That driver has a DoorDash prepaid card that has nothing on it, until they show up at will say say they’re going to I don’t know, like Fernando’s or something for Mexican food, they’re going to pick up the Mexican food. As soon as they get to that restaurant, what DoorDash does is they say, well, Aaron has $50 worth that he’s buying, let’s enable a transaction on that card that that DoorDash guy has to be swiped at Fernandez and authorize it for $50, even though there’s, there’s actually nothing on it, they’re gonna, they’re gonna authorize very specifically from that merchant for that specific amount at that time frame. And they’ll even geolocate that person’s phone to make sure they’re actually standing where they’re supposed to be standing thing, they’ll authorize the transaction that they actually are then so then Fernando’s is doing the exact same thing they did, they’re going to get an authorization know that they’re going to get the money at some point, they’re not going to they don’t have it yet. But then they give them the food and then the driver goes off and gives it to you. So then over the next two days, they’re getting asked from their merchant acquire DoorDash to send money to Fernando’s, and at the same time, your bank is being asked to send money to DoorDash. And most likely, that’s all going to net settle, you know, over a period of time that it looks like you know, nobody, nobody even really holds it in transit. It just ends up in Fernando’s minus the fees along the way that the people are getting. So DoorDash is fronting money for you fronting money to the driver fronting money to defer Nando’s you know, before they even get it from you. And the the actual liquidity that’s moving behind the scenes is far beyond far behind the the technical connection between the merchant and the buyer. You know, younger folks think, you know, I have a PayPal and Venmo that it’s just instant I’m sending you money instantly. Well, there’s just a record of it. So it looks like you have it but the money behind the scenes still is in banking systems and it takes days to move that stuff. It’s it’s still arcane in many ways. I don’t know if that makes sense. But

Aaron Spatz  29:18

yeah, but yeah, I mean, that made total sense. And it’s it’s fascinating to realize that none of that is actually happening in real time. Like there’s it’s all like these little add ons as good verbiage but like, like little micro loans, like they’re like, they’re pre, they’re pre paying these things for you there. They’re validating that there’s that there that funds do exist, right? They’re not drawing from a from a zero doubt, balance and account otherwise you get denied, but they see like, Okay, this makes sense. But what was most fascinating to me was when you’re saying like how they are authorizing that card at the point of sale for a specific, you know, specific time a specific location. And that that’s that’s mind blowing right there. So it’s so you know,

Matt Frye  29:58

the investments around that stuff for the last Couple of years has just been and it preceded a lot of the the pandemic stuff that sort of is really put a strain on that on that business model. But these pieces were already in place. So they were able to scale pretty rapidly. And now they don’t even give you a card, the driver, the driver doesn’t even need a physical card, the driver can just have the driver app on their phone and just tap and just it’s a vert it looks like it looks like an apple pay transaction. To Fernando’s, I don’t even know that there’s not an actual real piece of plastic behind the scenes. So they’re, they’re spinning up individual virtual account numbers for every single purchase account for you know, it allows you to reconcile easily enough, obviously, it limits fraud. I mean, these drivers, you know, previously, you know, I deliver pizzas and you know, but first first year college and you got cash, I mean, you’re picking up cash, and you’re driving, right? So if we were using that kind of a model today, every single of these drivers had cash and money on hand and they had to then pay back to whoever it is they’re working for. I mean, the the losses would mount and so that’s why these these things are built.

Aaron Spatz  31:03

That’s crazy. Yeah, that’s a really cool example. So speaking of cash, so DoorDash or Fernando’s, I’m waiting for my check now because that was that was not sponsored. No, it’s all good. All right, I’m

Matt Frye  31:15

sorry about that. I should have gotten some No, no names. No, no, no, no, I

Aaron Spatz  31:19

it was it was a it was a it was a poor attempt at a funny joke. It’s all good. No, I was gonna

Matt Frye  31:25

move this back about about 14 minutes to where you were doing your spot. And then No,

Aaron Spatz  31:30

no, no. No, it’s all good. It’s it. It’s a great example. Well, one I mean, that that’s it’s a service that a lot people use, right? So I mean, that’s it’s a great, it’s a great example of how

Matt Frye  31:40

there’s another Uber as we evolved, Uber and Lyft, Uber and Lyft. It makes it easy for us to hail rides, obviously, and I don’t just get out of the car and leave because everything just happens because my card is there. But that Uber driver, how do they actually get their share of that money? Right? You’re so you’ve got you know, we’re paying Uber my credit card, it says I pay Uber. But Uber then is fronting the money for my payment and giving whatever portion is owed to the driver, in some cases immediately, same day as it’s happening. So when I finished my shift and I’ve you know, taken 10 people to the airport, I have my money, it’s I have it automatically in my in my Uber prepaid card, or Uber will just send it to my bank account. So it’s that the sort of the a bit of the as the advancements I’ve said, prepaid card several times here, using these prepaid cards and these accounts to execute these kinds of commerce. It’s, it’s mind blowing, there’s more stuff happening, there’s really cool.

Aaron Spatz  32:39

Well, but then, like you said, all that data though, like so now you don’t need a car, it’s because the car data is stored electronically now. So it’s like it takes it completely removes the the necessity to have a physical card. Now, it’s just, it’s all happening, like chronically through an app, whether you you know, okay, I’m gonna tip this guy, X amount, you hit submit, and you can do this as you’re walking to the airport terminal, or wherever the heck you’re going. And this just happens real time. And that guy’s able to cash out, you know, probably 30 minutes later of thriller, whatever happens. So it’s, it’s absolute absolutely nuts. So that’s cool. So like, so take us on a little bit more the journey. So you know, after you left Blackhawks, and looks like your money, Graham, and and moving on from there,

Matt Frye  33:21

so MoneyGram here in Dallas. I know some people that because I’ve been in Dallas for a while, I mean that they’re headquartered here. So I know, quite a few folks there. I had never been in the money transmitter remittance business before. So that was a that was an interesting sort of experience to try to. I had I had an international team, I owned part of the part of the market in Asia, Pac and Europe. And it was sort of to learn how money moves globally and how liquidity in each of those markets sort of makes the makes the economics work for a company like MoneyGram. And I my charge was to was to help us move into the digital delivery. So instead of very cash centric agents, walk in agents and hand off cash, and then somebody goes into an agent in another country and picks up the local Fiat. This was about this is about taking all that online and digitizing the experience and I enjoyed my time there. I actually I came back to Dallas and left Blackhawk because my son was turning 10 And you know, I wanted to be home more I was traveling all the time all those acquisitions that we’re doing at Blackhawk, I was just I just I lived on the road so Dallas being able to come back and just work downtown it made it made a big difference. So I mean, I enjoyed my time MoneyGram but but then the the entrepreneur bug called me again and you know we we started this card out then about a year and a half after after I started MoneyGram

Aaron Spatz  34:53

Yeah, so let’s let’s let’s dive in a card now. So give give us a little bit of I mean, I know you shared with us a little bit earlier but getting Give us an idea of like, where the idea came from, because obviously, you had been kind of stewing on this for some time before he decided to forward it. So like, what? What prompted you to actually go ahead? And like, you know, let’s let’s go for it, you know, started 2020, which was, which I’m interested in? I don’t know. I’m curious. I’m curious to hear. Yeah. So take us a little bit on that story, though. Yeah, we.

Matt Frye  35:24

So the, the business, I explained it Blackhawk with all these incentive platforms, and, you know, most larger enterprises will will partake in those delivery models, but smaller businesses. So perhaps, mom and pops, maybe 20 employees or less, they still want to reward their staff, and they still want to offer incentives to clients and customers. But they’re too small really to sign up for for those bigger services. And they’re not, they’re not looking for sort of the the heavy weight that comes with some of those things. So sure, most likely what they do, is they walk into Walgreens or, or, or HEB. And they, they they’re buying cards in bulk. And we found that while I was at BlackRock, we found that there were transactions that would happen in retail that would be in increments of 567 cards at a time. And even if you take out a holiday, so we’re trying to figure out this in the billions of dollars of activity. Who are these people? Why are they buying cards in bulk, and it’s small businesses and real estate agents at doctors offices and property managers. And so we wanted to find a better way to serve that customer directly, as opposed to them having to go into into retail, and just get a handful of cards to hand out over some period of time. So sort of looking at that data, and then sort of anecdotes about, you know, my, my mom would have, you know, greeting cards and a, you know, a shoe box, you know, and have a bunch of always have a greeting card for whatever occasion, will convert that to gift cards, and everybody’s got a junk drawer with gift cards. In it, we have, you know, five or six Gamestop cards, which is interesting that nowadays, but we have, you know, downstairs, my son used to go to birthday parties on the weekends, you know, here’s always have a card. So instead of not having customers not another balance they have what card is active, what what, what card do I have on hand at any given time, keep we came up with a service where we give a box of inactive inventory to a customer that they can keep at their office or keep it their house and a mobile app. And so you’re essentially buying the car and as you need it just from your own personal inventory, take it out of the app, take it out of the box, scan the car, tell me how much you want to load on it. And then you’re able to hand it to wherever you’re going to hand it to or put it in the box or put in the envelope. So we have all all the top retailer brands that are supported. And some were, we started in Irving fulfilling sort of, you know, ourselves with dead plastic and sort of putting them in boxes and stuff. But I ended up finally partnering with somebody up in the Chicago area that’s doing it for me now. But there’s, there’s lots of little niches of small business owners and markets that that really benefit from having these cards on hand. So now, pandemic changes, you know, maybe the sort of the frequency and the velocity of some of these face to face interactions. And then there’s there’s this nonstop, you know, push to push everything digital and egift. But there are retail gift card sales still, year over year are increasing, even though it’s small number, it’s a small percentage, it’s a big number. People still want something tangible, you can’t. And we move so quickly from wrapping up a gift and giving it to someone to then move to a gift card. I don’t know how quickly we’re gonna move to just, you know, if I send my mom $20 In Venmo I mean that that’s, that’s completely ridiculous. We, I still need to take advantage of the little bit of personalization we have left, which is put some thought into a card and somebody physically and say thank you or kudos or whatever it is. So,

Aaron Spatz  39:12

no, that’s cool. Yeah, I was I was on your website earlier. And I remember because I was pulling up the couple of articles that were on your website. So I mean, one is it’s a great website and but to like I like the box. And like the starter boxes, right? So like you’ve got these, these things where people can like literally get get a box of cards from different from different places. And now they’ve got this, they got this inventory now but what you’re saying though, is they’re they’re not already pre loaded. So you didn’t have to walk into Kroger, or wherever and go there and go buy $1,000 worth of gift cards today. Is that that that’s happening on this platform crazy.

Matt Frye  39:53

It’s a cash flow benefit, right? I’m not locking up capital. Yeah, as a small business owner, you know, putting $1,000 into A bunch of gift cards that that could be a problem, why would I do that. So by having sort of the that, that rack on the end cap, that target just shrunk down in, you know, and put it on your, on your reception desk or in the drawer, you have the ability and the flexibility to to always have a car whenever you need it, and you’ll buy it and load the exact amount you need. When you’re actually gonna, we’re gonna hand it out or give it to whoever you’re giving it to.

Aaron Spatz  40:25

That’s pretty awesome. So like, I mean, how’s How’s the market received it? Like, how was that how,

Matt Frye  40:31

you know, last year last year was, was a tough year to try to get something off the ground. But I’m I’m very happy with what we were able to accomplish, I think we we turned what were some lofty projections into sort of more of a proof of concept objective for last year, into making sure that the tech or solid, the fulfillment was solid, the user experience and the app and how the features tied together. Now you can order more cards and add brands and all of the pieces work really well, we were able to get lots of different verticals and industries signed up and using the service or real estate agencies and doctors offices, and I’ve got some home health care franchise operations that put a box in every single office. And so we found lots of really good pockets of success. So I’m pleased with what we were able to do, I think that this year is about sort of doubling down on a couple of the b2b channels that it’s just, it’s taken a while to get their attention. But um, we’re well on our way, sort of delivering this into other channels as a part of a service that’s already being offered as a part of a small business solution or something as a part of expense management software, accounting software for small business. And then and then maybe even in retail, you know, there’s, there’s, there’s, it’s, it’s a different model. So it’s gonna take some education, but pandemic sort of shone a light on, you know, that’s the beauty of adversity, there’s always an opportunity, right. So, pandemic is, is wildly, sort of muting a lot of opportunities that we had originally thought about. But you can’t, when you go to a store to pick up groceries and you order curbside pick it you can’t do gift cards, you know, he won’t do that Kroger won’t do that because it’s it’s a fraud. They don’t want to have cards activated at a POS and then walk out and put them in a bag. You know, they’re not set up that way. The when they do, they’re when they pick and pack for some curbside. Yeah, they’re not running through a POS you know, they’re just getting an order. And so this is a great model for grocery that has people wanting to get cards and in the the drive up, alright, well, let’s give them a box. And then that could create a regular relationship for heb for that customer. And so that’s the kind of stuff I’m really trying to push into and get some of those relationships yet take advantage of what I think is a better mousetrap for for that customer experience where you know, today, they would lose the gift card sale altogether. So

Aaron Spatz  43:07

Right. Yeah, I mean, that’s, that’s a great, that’s a great point. Because you have to physically go into a store and more and I don’t know the numbers, but somebody can send them to me, I’m sure. But like, more and more sales are occurring online. So like the curbside pickup is now a very dominating means of doing groceries and doing Yes, like, I mean, shoot, just ordering stuff off Amazon, right. Like, yeah, there’s, there’s a lot of things that’s occurring exclusively online, minus like, crap, and you do get like, you know, a loaf of bread or a gallon of milk, like you’re going to show up to the store. But to your point, I mean, you’re, there’s, there’s a lot of foot traffic that’s being missed. And so now you’re kind of, it’s clever, because you could package it, you know, as as it’s because there’s, there’s nothing has to be activated, it just leaves the store, right? So they’re just,

Matt Frye  43:57

it’s, it’s like buying, you know, just a couple greeting cards is what it sort of ends up being, you know, I mean, it’s, we charge 1299 for it, you know, for the for the first box, and then you don’t pay anything else. You just, you just pay what you load on the cards. So yeah, there’s a, there is definitely a market in that model that I just described them, and you’re trying to find the way to insert it into the existing delivery models and the existing vendors that are there, but, but I think I think we’ll figure it out.

Aaron Spatz  44:28

Yeah, no, it’s quite mad because I’m thinking all the different applications you can have for this, you know, outside of, like, a lot of the standard stores and things like that, but even like, this could sound ridiculously stupid, but I mean, even like sports teams, is there a way to like, you know, license that with like, you know, professional sports and you’re prepaying for tickets to go somewhere as some type of gifting option. I mean, like there’s there’s a lot of different ways that that could go and like that’s it. Yeah, it’s it’s a pretty neat, neat thing to do. You know, like you’re You’re able to keep it personal and and, but limit your expenses and keep things keep things close. So, no, I think it’s a great, it’s a great concept. It’s a great I mean, it’s a beautiful website really, really like really well laid out in terms of just understanding exactly what’s going on from,

Matt Frye  45:16

I’ve got some great, I’ve got some great people that helped me with all that. I mean, I’m absolutely very creative folks that do a lot of that. So I’m thankful to have them on the team.

Aaron Spatz  45:25

So like, let’s talk like the maybe potentially, like the ugly side of this. So is there is there anything to prevent somebody from trying to jump in and beat you to this, because I feel like this is going to be like a bit of a marketing ploy. Like, you’ve got to like, you know, who’s got more marketing budget? You know,

Matt Frye  45:42

certainly, I think the technology is pretty unique, what we Okay, so I would say that the pieces have always have always existed, but nobody’s put them together in this sequence in a way that allows the the individual consumer to sort of interact with him. Like, this is what I meant earlier, most of the most of the most of the things I’m using are typically behind the scenes guts that aren’t exposed in that app like we’ve done. So we put things together in a unique way. And I filed a patent on it. You know, I mean, I think that that was the first thing we did when we first before, before we even finished raising money. And we just had just barely got the incorporation done. We hadn’t we hadn’t written and we submitted and I feel like, it’s, this is unique enough that the process patents should hold, and at the very least, it it will, it will allow us to have really good conversations with people as partners, as opposed to try to compete, and I’m more than willing to license it and things like that.

Aaron Spatz  46:41

Yeah. Yeah. I mean, there’s a lot. There’s a there’s a lot of opportunity there. And I think it’s I think it’s a clever way to keep the personal touch cuz like to your point, right, like, I was starting to laugh because I’m like, Yeah, we, I mean, how sad have we become now where it’s like, you know, everything. I mean, I hate to think that we would ever descend into and I’m not trying to call you out out there, like so anybody who’s listening, watching, talking to you right now, I’m not, I’m not trying to put you down. But I’m just thinking, you know, the less and less personal we become just is that just painful. Like I would hate to be at a point where we’re just, we’re just wiring money from bank accounts or bank account for Christmas or birthdays like that. Just,

Matt Frye  47:22

you know, we were starved for I mean, I think we’re so starved for more contact and personal nowadays. And we people are finding really, the drive through birthday thing. When that started, I blew me away that people were doing that in their neighborhoods, when people would, you know, sit in the front yard. Sally’s birthday, people drive by it because people don’t want things to be just electronic and email they want for so I think we’ll always have, they’ll always be a demand for it. I just got to make sure that I’m, I’m in front of that. And I’m talking to that customer when they’re making that decision.

Aaron Spatz  47:54

I’m just thinking like, what if we get to the point where it’s like, virtual Christmas presents around the tree, you know, they’re all it’s all holograms, and you touch you touch the hologram. And

Matt Frye  48:04

I don’t want to zoom with my parents over Christmas again. I don’t want to do that. So I don’t mean, it’s, uh, yeah, hopefully, hopefully, things bounce back. And we sort of overcorrect the other direction. And then that’ll be good for Cardinals. And

Aaron Spatz  48:18

you said, you mentioned raising money. So you so you’ve, so this is backed by capital raising? So if you don’t mind, we don’t have to go into scruciating detail, but like, Sure, share with those that are curious about the capital raising side of getting a business going, like, what was that experience like for you? Like what what advice would you have for others that maybe I’ve never gone through that before.

Matt Frye  48:39

So lucky enough to have a previous company that we exited. So we had some some investors that, that were a part of that, that were able to bring back in, but we did mostly friends and family, mostly people that are that are in the business and you, you’re selling yourself, you know, you’re gonna be passionate about an idea. And you’re gonna be able to put it back together. And but but at the end of the day, you’re going to know more about that, then then that person is whoever you’re asking for money. And they’re really going to be investing in you. Because, like, we’re perfect case that what I had in that deck did not happen. Because last year was very different than we originally walked in expecting it to be. So they invested in me and my ability to sort of React and overcome. So you’re selling yourself gotta have a great idea, certainly, but as you’re starting small, and it’s going to be small investments by a lot of folks, there’s different ways to structure this things. We sort of raised as you need, there’s a safe structures and but we did a straight LLC and we had I think 20 different investors, varying amounts. We didn’t raise a ton of money. It was really about getting it started. And so now I’m in the process of looking for looking for more for round two, sort of in conjunction with this, you know, expansion. And so a lot of the partners that that would be interesting partners for distribution are also folks that, you know, potentially be investors. And so that that’s how that those conversations are just ongoing constantly now, so

Aaron Spatz  50:13

sure. Well, I mean, and it makes sense to because you have a track record of success you’ve done like you’ve you’ve had a lot of experience in this industry. So naturally, you’re like McKinney’s, this archaic term Rolodex, but your, your, your network, your network of people are very heavily concentrated in this industry. So you know, as you kind of alluded to earlier, it seems like a lot of folks that work in the space tenant Oh each other, if they’ve been around for some length of time. So you’ve built a bit of a reputation, the things that you’ve worked on has gone well, so it’s, it’s positioned you in a point where people can they can invest in you. And I think that’s a brilliant point is, and I’ve heard this from, from a few different people is like, when investors are looking at in an opportunity. To your point, obviously, it’s got to be a good idea. Obviously, there’s a lot of things about it that need to just make sense from it from an investor standpoint. But at the end of the day, though, they are they are investing in you. So do they think you can deliver? Do they think that you’re able to? Are you are you the person for the task? And can you take us from point A to, you know, the vision of where it’s going to be on Slide seven, you know, so it’s like, how’s this all gonna happen? How’s this all gonna go down? You know, so? No, I, it’s fantastic. I’m, I’m excited for him. I’m curious to see like, how it continues to grow for you. And I think there’s, it’s, I think you’re scratching, they’re definitely scratching an itch that I think it is, you’re, you’re you’re serving a group of people that I think really need to be served. And so I think I really think there’s opportunity there. And, and I think as you continue to go out, you’re gonna see a whole bunch of different use cases for Yeah, ways that it could be used. So anyway.

Matt Frye  51:59

Well, it’ll be funny. It’s gonna be a fun year, I think. Yeah.

Aaron Spatz  52:02

Yeah. No, I mean, it’s hard to believe we know. It’s like, here we are. Yeah. I mean, like, we’re at the end of q1. Like, we’re starting to wind down already. q1 says, it’s just absolutely, absolutely nuts. But no, I mean, as we as we wind down, man, I just want to really, I think, at this point, probably most appropriate just kind of turn this last segment back over to you. But like, is there anything that we haven’t gotten to in terms of that you that you’ve kind of got on your chest that you’d like to share or any, any parting shots, words of wisdom for those that are in their professional careers, looking to make a change, or looking to start an idea, like, if there’s anything we haven’t had time, we haven’t addressed yet, I’d love to kind of give this back to you in terms of just final final words.

Matt Frye  52:47

I mean, I think most of the conversations that I have with, with entrepreneurs, you know, last year is just a great microcosm of how you have to be prepared to, to change direction. And, you know, pivoting is an overused word. But it also because I think, I think pivoting also sort of implies a pretty dramatic shift. And I’ve always found that you just need to be flexible enough to make small changes, you know, the maybe maybe end up making a lot of small changes, but you don’t need to turn the tank or all the way around, you just need to steer it a little bit, one direction or the other. And so having a team of people that are comfortable with change, having a culture that’s comfortable with change, that again, that, you know, we’re selling widgets, today, I’m selling cars tomorrow, it’s but but at least comfortable with, you know, what we wrote down two weeks ago, it’s going to be a little different, you know, because that it takes it takes a group of folks that are happy in that environment, to make that successful, because you’re gonna end up with folks that are, that aren’t necessarily as comfortable with that kind of kind of environment, it’s a culture thing, you know, so a culture that’s comfortable with change is going to be the best starting point for any entrepreneur.

Aaron Spatz  54:10

Now solid because you, I mean, you’ve got to always be adaptive and able to respond to different things that you learn because you’re always learning especially, especially like in your case, or really in any business that is addressing a, a new market, so to speak. You’re gonna learn a lot of things along the way, and you gotta be able to respond to that as you gain more information and as you are able to observe the way things are being received or respond to right. So it’s like you’re able to kind of go through that. So I think it’s, I think it’s solid, appreciate, appreciate you sharing that and really, I just, I just want to thank you again for for being here. I’ve really, really thoroughly enjoyed our conversation, how that how can people get in touch with you? What’s the what’s the easiest way for them to follow what it is that you’re doing?

Matt Frye  54:55

So I’m on LinkedIn, you know, and posting stuff all the time there and you know, blogs and sort of co author a bunch of articles around payments in general. So I’d love to follow me on there and you know card now.com Please check it out and let me know what you think you can you can email me directly at Matt frei at card now calm.

Aaron Spatz  55:14

Awesome. Awesome. Well, Matt again, I just I just want to thank you this has been a it’s been a true blast. I

Matt Frye  55:20

really appreciate just gonna sign when I started here and I started you. Thank you.

Aaron Spatz  55:23

Appreciate it. Thanks for listening to America’s entrepreneur. If you enjoyed the show, please leave a review or comment on your preferred social media platform. share it out with friends, family, coworkers, others in your network. And of course you can write me directly at Erin at Bold media.us That’s a Ron at Bold media.us Till next time

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