Derek Webster: The Innovation Interview
Derek Webster, Founder and CEO of CardFlight shares his thoughts and insights on innovation, technology and the mobile payments industry.
CardFlight provides tools for mobile app developers to easily integrate in-person (card present) payments within their own iOS and Android apps and works with virtually all major payment processors. Prior to founding CardFlight, he was the Founder and CEO of LocalBonus, a credit card-linked loyalty network which rewarded consumers for purchases they make at local businesses.
Earlier, Derek was an Engagement Manager at Oliver Wyman where he led senior-level strategy projects for some of the leading global payment networks and retail banks. He was also part of the team that launched E*TRADE’s credit card business, where he personally led all product development and product marketing efforts for the group. Derek has an MBA from the Stanford Graduate School of Business and a BS magna cum laude from Georgetown University.
How do you define innovation and what does it mean to you?
To me, innovation is an output and not an input. It’s about seeing an opportunity, having a unique view of how to seize that opportunity and being committed enough to see it into action despite whatever setbacks occur along the way. Innovation is not about “being right” all the time – great innovators experiment a lot which is what leads to the major breakthroughs.
What industry needs to embrace innovation and take more risks?
Obviously I’m a bit biased, but the financial services industry is ripe for innovation. There are plenty of valid reasons to tread cautiously – moving people’s money around electronically can and should be regulated, safe and secure. That being said, most of the incumbents are built on technology that’s older than I am, so you have to be creative about where and how to innovate because frequently you can’t just start with a clean sheet of paper and build an entire end-to-end payment system from scratch.
What is the best piece of advice that you have been given and received?
Irv Grousbeck, one of my professors from business school, has a favorite refrain: “Regret for the things we did can be tempered by time; it is regret for the things we did not do that is inconsolable.” (The actual quote is from Sydney Harris.) With some obvious exceptions, we try to create a culture at CardFlight that encourages calculated risk-taking and trying new things without fear.
What is your greatest achievement and why?
I hope that my greatest achievement lies ahead with growing CardFlight. While we’ve already raised venture capital from top investors, built our team to 8 people and built a loyal base of initial customers, we still have a long path ahead and are serving a huge market. We’re just getting started!
Newspapers and Books: Digital or Physical?
Digital, all the way. Fairly often I find myself with 50+ open browser tabs with news and blog articles that I want to read. Long flights, weekends or late nights are great for catching up on the articles I intended to read during the day but didn’t.
CardFlight could fill a gap for political campaigns and allow them to collect donations in real-time through their own custom app. Is politics an industry that CardFlight is currently exploring as a vertical and if so, what has the response been from politicians and political consultants?
It’s absolutely a vertical we can serve. We’re already in discussions with a few different companies that provide technology services to political campaigns to help their customers take credit card contributions in the field via their own mobile apps.
What were your greatest takeaways from launching E*TRADE’s credit card business and how are you applying those lessons to CardFlight?
It was great to learn about the payments industry from within a tech and product focused company. There is a lot of complexity behind the scenes whenever working with payments infrastructure – and I certainly learned a lot about that firsthand – but we were always focused on creating the best products for our customers. Even though I was at a fairly large company, there were parts of the experience that felt like being at a disruptive startup.
How do you see the payments industry evolving over the next five years and what role will CardFlight play in the consumerization of payments?
Today, 90% of credit card payments occur in face-to-face transactions. While e-commerce and other ‘card not present’ payments are growing, real life commerce isn’t going to disappear overnight. Five years from now, you’re still going to pay a lot of your experiences in person: your haircut, your co-pay at the doctor, your car repair, your dinner at a restaurant, etc.
The difference is that those merchants won’t be processing the transactions with a dumb terminal that takes a payment and does nothing more. Instead, they’ll be using the same software to take a payment as they use to manage appointment scheduling, CRM, inventory, reporting, electronic health records, etc. The people who build those solutions are our customers and we make it really easy for them to integrate mobile payments into their overall solution.
With the option of custom branded credit card readers you are opening new and potentially very lucrative markets within the sports industry. Have you held talks with any professional sports teams about integrating CardFlight into their POS systems at the stadiums?
Mobile POS is a huge opportunity at sporting events, and we already have multiple customers within the events and ticketing industry that are integrating CardFlight.
What has the response been from consumers who have used a POS system powered by CardFlight such as the ones currently used at Henry Vilas Zoo?
Our clients love it. Most of our clients have a fairly specific idea of what they want to build and the CardFlight integration is only part of what they’re building. Because we have an elegant, transparent, developer-friendly platform, a lot of our clients can integrate in a matter of hours rather than the months it would take without us. This lets our clients focus on building their product and serving their customers without the typical complexity of a payments integration.