Bringing B2B Payments Into the Digital Age with Bar Geron of Balance
Are you tired of the hassle of B2B transactions? Look no further than Balance, the B2B payment suite that is revolutionizing e-commerce. In this episode of PayPod, host Jacob Hollabaugh sits down with Bar Geron of Balance to discuss how Balance empowers vendors and enables growth for B2B marketplaces. Balance lets B2B merchants provide businesses with a way to pay how and when they want, while getting the funds instantly and easily as card payments. Watch this episode for a fun and interesting dive into this latest development in payments and fintech.
Payments & Fintech Insights In This Episode
- Unlocking the value of B2B marketplaces with Balance’s suite of products
- How Balance is enabling growth in the rise of B2B marketplaces:
- How Balance offers trusted transactions
- Balance is revolutionizing B2B e-commerce by removing operational hazards and empowering vendors.
- The importance of payment automation and how Balance is streamlining transactions
- And SO much more!
Today’s Guest
Bar Geron : Balance
While at PayPal, they witnessed the struggles of B2B merchants unable to complete the transition to the online space, being stuck with offline transaction processing. A fraction of their trade is via credit cards, so retrofitted consumer solutions weren’t going to cut it. What was missing was a solution designed specifically for B2B eCommerce business and marketplaces, owning the entire B2B checkout experience, end to end – unifying different payment methods and terms, providing a self serve experience, while getting full control. Balance lets B2B merchants provide businesses with a way to pay how and when they want, while getting the funds instantly and easily as card payments
Featured on the Show
About PayPod
PayPod is the leading voice in the payments and fintech industry, covering payments, risk management and new technology. Host Jacob Hollabaugh interviews leaders who are shaping the payments and fintech world, as they discuss the latest developments in the payments and fintech industry.
Episode Transcript
Jacob: Welcome to PayPod, the Payments Industry podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world from payment processing to risk management and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show, we are going to be talking about B2B payments and how they are finally, at long last becoming more digitized, more frictionless, and hopefully much less of a headache for those of us making and receiving them. Joining me to explore all these topics today is someone who is on the front lines of moving this industry forward Bar Jaron, co-founder and CEO at Balance, the B2B payments platform built for marketplaces and merchants that are striving to make B2B payments frictionless and amazing bar. Welcome to the show. Thank you so much for being here.
Bar: Thank you for having me.
Jacob: Yes, of course. It’s my pleasure. And before we get into the specifics of balance itself and what you’re doing differently than the rest of the industry, let’s first set the stage of this industry. Can you tell me what is made the B2B payments world so different than the B2C payments world that has caused this dramatic difference in how they’ve worked in the digital age?
Bar: Yeah, definitely. We can break it down a bit. The world payments online starts with B2C and generally with the trend of moving to e-commerce. I’m not sure what’s your age?
Jacob: I’m 33, so I’ve lived through the entire transition. I’m right in that generation. That’s like I saw all the old stuff and all the new stuff. I’m right squarely in the middle.
Bar: When you were a kid and your mother used to take you to buy things like, I don’t know, Nike’s or whatever it may be, she took you to a retailer on the local stores that you had around the place you were living in back then. The world changed. We buy online as consumers today. It’s obvious it wasn’t that obvious 15, 20 years ago. The same trend that accelerated in 2000 is now getting into B2B. B2b is essentially everything that happens before the retailer is selling something to a consumer. The retailer is buying the thing that he’s selling to consumers from wholesalers, and wholesalers are buying it from the local distributors and the distributors are buying it from manufacturers that are buying other materials from other manufacturers to produce the goods that they are selling. All all of that industry is about. When he acts on the B2C. Every one B2C transaction has like 12 B2B transactions before it to make it happen. And the traditional industry, the B2B, is really in the heart of it. Chemicals, lumber, textiles, steel, everything that is in the heart of the economy and how it works is now looking to move online as well. Why moving online? Easy, clear, Simple. Online is more efficient. Everything that we experience is consumers are relevant for business buyers. Surprisingly enough or not, depending on who you are. 80 something percent, I think it’s 85% today of B2B buyers or millennials. They are looking for the same experiences they had as consumers. Those are the same people buying everything online and are looking for the same experiences as purchasers in the B2B space.
Jacob: Is the one of the main reasons then that B2B has been so behind on making that transition that even though there’s way more like that 12 X like you said, transactions that happen to get to the one B2C transaction, is it because more so, the people that were making those were the older generation who was much slower to adopt technology where on the consumer side there’s consumers across generation so younger people drove it. Is that one of the friction points that why it may be lagged behind so much? Because it amazes me hearing that 12 to 1 and I knew it was more, but I didn’t realize it was like that much more. And I would think there’s more transactions there. It seems like they’d be the ones to make things easier before where there’s less transactions. But the generational thing makes it clearer for me. Yes.
Bar: Definitely think that’s a major piece in it. When you think about B2B, it’s so relationship based, buying your materials to produce something. You don’t replace a vendor every few months. Yeah. You really stay with the same one that your father used to use or the ones that you heard are doing a great job. And it’s the same factory, doing the same type of work for the same defined amount of buyers. The big change that exists is that now. We are okay with working with people that we don’t know. That’s the big to if you remember, in the old days, it was scary to put your credit card online. Yeah, because it was scary to work with vendors you don’t know. Paypal came along and was the first solution to facilitate trust online, saying to consumers, It’s okay, you store the credit card with PayPal with your wallet and the vendor can’t even see it and can use it without authorization. If there’s a problem, you come to me. Balance is trying to create the same experience for B2B transaction in B2B. You have very different mechanics to how a payment works. First of all, it doesn’t happen at the time of order. You pay on the 16th of each month because this is where you pay all your vendors, right? A business doesn’t pay each vendor when he puts an order.
Bar: The accountants are paying on the 15th for everyone to a wire. Another credit card. Credit cards are only 8% of B2B transactions. So when you combine like checks, wires, sometimes credit cards with net terms that are changing from 60, 30, 15, as a merchant, it’s extremely hard to manage it. Different channels and different times of the day of the month. So it’s a very unscalable experience. Definitely. When you need to give terms to someone you don’t know, how can you? At the end, you need to facilitate chairs online. You need to sell something. The person buying it needs to sell it himself and then only paying for it. This is the most basic elements of leverage within the economy. This is before loans, right? We’re just trading partners giving some time to sell it before to make the profit, to pay for it. Yeah. Now you can only do it with people, you know. How do you do it in scale online when someone is getting into your website and want to buy something? This is what balance exists. This is why we exist. Because this is not a problem in the B2C space.
Jacob: Yeah, and that brings us right into balance. And I think you kind of answered the one other question I’d had there at the end, and that is prior products. The reason maybe a big payments company in the B2C world has never really come into the B2B world is because obviously the products are just wildly different as far as the different steps, the different payment types, everything you kind of just mentioned there. Am I correct in saying that that’s likely the reason why, you know, a stripe or someone is like, I don’t want to build all this new technology. It doesn’t just port 1 to 1 over.
Bar: Definitely.
Jacob: Awesome. So let’s get to balance then. Can you just start with kind of a high level overview of the company and the products and solutions you offer And then want to kind of get into the weeds on a couple specifics of it with you.
Bar: Definitely. So balance is really three lines of products that traditionally existed in different companies. And like an all in one of all three, because we believe the connection between them is what creates a frictionless transaction online. One product is payments, moving money from one place to the next. Traditional payments that, you know are credit card companies processing cards. That’s not enough. So Balance has a suite of payment methods that are specifically designated to serve business customers. Wires, self-serve invoicing from the checkout. Checks, direct debits and other forms of payments. All of them are available and in a smooth B2C like experience. That’s one set of products. The second is terms. So when you pay, you pay when you need to pay as a business balance is a credit business like standing chairs for buyers and paying upfront for vendors. This is how we facilitate trust. Given the terms buyer needs to move from their existing vendors and remove the risk from the vendor to keep running the business as he wants to do without needing to know the ins and outs of their buyers. The third element is software. B2b transactions are really workflows, workflows that needs to be managed and automate in order to do it. Friction best Balance is also a payment automation workflow software that enables you to do automatic collection and dining and milestone based payments and everything that you need to customize the payment flow to your specific vertical and business. And when you combine all those elements together, which really exist in different siloed solutions, you unlock the real value of a B2B e-commerce payment suite that can really scale your online channel.
Jacob: Love it. And is it that combination of those three? That’s really the what sets you apart from the competition, really? Are you one of the first or only to be combining those three silos into one? Yeah. Yeah.
Bar: This is why Balance has such an ambitious goal and also why we raised a lot of capital, Right? Balance is. Balance grew very, very fast. And to support such a robust product, we needed to partner with the best of the best. Yeah. So Stripe is an investor. Salesforce is an investor, HubSpot forerunner, Ribbit, Lightspeed, all the biggest of the biggest. And yeah.
Jacob: Yeah. And that’s a big sign of trust to have the big players on, especially some of the ones that are on the B2C side saying, you know, we’ve never tried this because it’s so different, but we see a company that is able to do it. We want to be a part of it, even if that’s just from an investor standpoint. So that’s a huge stamp of approval to get. So one of the you kind of list different verticals that you work within, the biggest one being kind of marketplace companies, which having dealt with marketplace companies in different previous jobs, I’m aware of what that means. But sometimes that can be a confusing term. Even some people out there that might interact within their company with a marketplace might not totally understand. So can you give me kind of a hypothetical example of what you mean by a marketplace company, but then use that to walk us through how your platform benefits it?
Bar: Yeah, definitely. So we grew up when Y Combinator was an incubator in Silicon Valley and we didn’t know wholesalers or we know what we want to build a checkout experience online. And the only companies that we knew are tech companies like ours. And this is how we got introduced to the concept of B2B marketplaces. Those were entrepreneurs, venture backed, young, hungry to change old industries. And we just started building something that will serve them. Luckily for us, B2B marketplaces started to explode all over the place because that was the go to approach on how to move online and how to really making an old industry more sophisticated. So in order to support those B2B marketplaces, you needed to to remove the marketplace from the federal funds. While enabling the marketplace to control every aspect of the transaction. Which is extremely hard. Like you need a lot of product and regulation umbrella. In order to give someone all the tools to control a transaction that it doesn’t hold without being exposed. Because in the US you can’t touch phones that you don’t own. Right. It’s like it’s a bit obvious if you do it, you’re a bank. So Balance needed to come in and say we will provide you with the necessary systems in order to remove you from the fedral funds. So this is what really Balance is doing for them paying in to pay out full control, but being outside controlling it with joysticks and APIs.
Jacob: And you kind of alluded to this at the beginning of that answer, but it seemed to me and tell me if this is maybe your thinking and focusing on marketplaces initially or not, if maybe I’m way off, but it would seem like the better payment and infrastructure options there are for a marketplace business, the more viable a marketplace business becomes that, like you said, they’re kind of exploding now. But I would think one of the things they’re a very smart and viable business idea and option that hasn’t had this one area that they could do that I feel like is kind of held them back from existing in the first place. And now I feel like with a company like yours, it almost makes a bunch of new companies much more viable that now they would have a platform to operate the financials through. Do you think like services, like Balance may help drive those new marketplace style companies to even be able to exist in the first place?
Bar: It’s a good point. One of the challenges of a marketplace is to answer the question, how do you monetize and what Balance is providing is the ability to monetize in ways. That very that that are very relevant to what their buyers and vendors are looking for. Number one, in B2B trade, which is the most important one, is cash flow. Cash flow is king. In B2B, it was Balance is providing. Is that the extension of terms in scale? So I’m a vendor. I can get paid right away when there’s a transaction. If I’m a buyer, I can get the terms I need. That’s a huge unlock of value. And with Balance, you can mark up the service and then monetize from it yourself. That’s true for payment processing as well. That’s true for software. Automation really to making the marketplace an AR extension of the vendor for him to not to be worried about what it means for him to start working with this channel that can explode. It puts the focus on growth and not on operational hazard.
Jacob: Makes sense. And are you so in all of this or is it simply the API in the platform or are you actually handling money acting as parts of the payment chain yourself? Or is it simply just the underlying API and platform that connects all of these services?
Bar: It’s all of it in one.
Jacob: Wow. Very impressive. Then in the last specific product question then for you is the instant payment portion of it at least I saw instant payment listed there, and you’ve kind of spoke to that ability to be able to act as that loan service. Is that kind of the biggest, biggest selling point you have as far as to the end vendors and everyone being a part of this that makes it easy for the merchants or the marketplaces you’re going to to be like your vendors are going to love this because of this feature.
Bar: I think it’s a big selling point. Your intuition is right, but I do think it’s depending like Balance is working with Fortune 500 companies to like startups. And when you’re very big, sometimes the capital is not the problem. The problem is the software. The problem is the scaling element. The problem is to reduce the cost. So it depends like we see some of them putting the focus on workflows, payments and credits. But at the end the only one is what makes it really beautiful.
Jacob: Yeah. And I would guess, as you’re saying, kind of saying there, yeah, it’s the smaller ones that are like, I need net 60 because I need to sell this thing and make the money to be able to pay you your portion of it versus the larger companies that are working with much higher cash flow that yeah, that sounds nice, but it’s not actually needed for me to make the payment, which kind of leads me then to one other kind of trend question then is you’re incorporating and one of those big friction points was being able to do the net 30, net, 60 net 90, the payment terms, which being different B2B versus the B2C world. Do you see though, as software increases and everything gets better and more digitized, do you see the speed of payments in the B2B world being something that you know where we might look ten, 20 years down the road? And it’s not as common to be like, Yeah, you can do net 30, you can do net 60. Do you see what you’re doing and what else is happening in the industry? Kind of slowly but surely moving to where payments are happening faster and there aren’t as long of term dates the way there historically has been in the B2B world.
Bar: To be honest, I’m not a fan of disrupting things. I’m a fan of supporting things like. Empowering the things as they are. And it’s a mentality in the company that I think is very important for us. We think there is a reason for tariffs. It exists. Because of power dynamics. That will never change or would change. But it’s not technology will not change it. I think that businesses have their business processes because it’s a business and it needs to work in a specific way. And this is why I don’t think B2B would be like B2C, but it can be beautiful and elegant, like the standards we know from B2C. And that’s the difference. It’s about the standards of performance and experience and not about being the same because it will never be the same. Yeah, and that’s a good thing because it’s different and that’s okay. Yeah. The company, like the company is trying to change and trying to make them. Yeah, just use credit cards. Everyone just use credit cards. It didn’t work. And they spend huge amounts of money to try to educate a market that doesn’t want to be educated. I think that’s the difference with the approach of balance, that this is why we saw the errors.
Jacob: Yeah, love that at the beginning there the not trying to be a disruptor but a supporter instead. And I think a lot of companies could find much more success at if they took that approach versus every single company out there disrupting and being one of the buzzwords of the last half decade or so of like, not every company is going to change the world, change how everything’s done. You probably have much better success if you just try to help what’s going on be done better. So I really like that. And that leads me kind of into the last topic I want to touch on with you to kind of wrap up here. I love talking with folks in your position, founders, CEOs within the payments fintech world about two specific questions. First, from a company level, then I’ll ask from an individual level. But speaking kind of business career advice, having been in the payments, the fintech world for a while had a lot of success in it. What stands out to you as a key characteristic or ethos of a company that you think would be successful in the payments or fintech world?
Bar: If I knew the answer to that.
Jacob: I think you already gave one. So I’m almost asking you for a second one because I again, I loved the support versus disrupt. And I think that’s that would be something. If I saw that in another company, I’d be like, I feel like your odds of success are a little higher. Is there any other kind of standards where you hold the company to or like to think of as this is how the best players in this world operate?
Bar: I don’t know if it’s specific, but I think that in Balance, we’re trying to put the focus on flexibility. We try to incorporate it in everything that we do, how the product works, how we talk to customers, how do we approach sales. We are very consultative in our approach. We put a lot of focus in helping them achieve what they need, regardless of values and regardless of revenue, because we see ourselves as. We we have a fundamental belief in karma. We believe that if we will do the right thing. And if we will push for the right mission as a company, the company will be successful. We’re trying to optimize for the long term for the industry and not for a feature or a short term success. And it’s not for everyone, but I think it’s the only way to really do something significant.
Jacob: Yeah, I’m with you on that. Let’s take that then to the individual level if you can. Is there any specific traits that have helped you be successful in this world or that you would tell someone newer to the payments or fintech world to work on building to find success of their own within this industry? Yeah.
Bar: If I can say something to venture backed companies raising money founders stay humble, go to work, eliminate the noise and focus on solving problems. There’s a lot of attention grabbers that your job is to eliminate for your team and more importantly, to eliminate it for yourself. Yeah, that’s the key.
Jacob: I love that. And especially in an industry that is been changing a lot in recent years and is ever evolving and changing, the more dramatic the changes, the more noise there is to have to be able to cancel out. So I think that’s sage advice and Bar. This has been really great to get to learn from you And about Balance. For those listening who might want to follow you or the company, keep up with what you’ve got going on, where would be the best place for them to go to do so?
Bar: So LinkedIn is a place that we’re very active in. Getbalance.com. The website has a lot of articles you can reach out to me Bar@getbalance.com If you have any questions. Always happy to be helpful. And yeah, let’s push the move trade online.
Jacob: Yeah, absolutely. Love it. We will of course link to those and more and we’ll throw that email address in there in the show notes as well. Bar thank you for giving us your time and knowledge. It’s been a real pleasure. Hope to speak to you again sometime soon.
Bar: Thank you sir.
Jacob: If you enjoyed this episode and want to hear more, head on over to SoarPay.com/podcast to subscribe on your podcast listening platform of choice. That’s s o a r p a y.com/podcast.