Navigating the Complex Web of Payment Orchestration with Kristian Gjerding of Cellpoint Digital
In this episode of PayPod, we explore the world of payment orchestration and its vital role in the complex airline industry. Joining us is Kristian Gjerding, CEO of CellPoint Digital, a leading payment orchestration company. We delve into the intricacies of payment orchestration, its significance in the airline sector, and the evolution of payment methods. Discover how the airline industry’s unique complexities demand innovative solutions like payment orchestration.
Lessons You’ll Learn:
During this episode, you’ll gain insights into the challenges faced by airlines in managing their payment processes, the rise of buy now, pay later solutions, the growing popularity of mobile wallets, and the importance of being payment provider-agnostic. Understand how payment orchestration helps airlines optimize their payment operations and enhance the customer experience.
About Our Guest:
Kristian Gjerding, CEO of CellPoint Digital, has extensive experience in the world of payments and technology. With a focus on payment orchestration, Kristian brings a wealth of knowledge about the evolving payment landscape and its impact on the airline industry.
In our conversation with Kristian Gjerding, we explore the unique complexities of the airline industry’s payment landscape, the significance of buy now, pay later solutions for travelers, the growth of mobile payment methods like Apple Pay, and the importance of being adaptable and payment provider-agnostic. Kristian also shares valuable insights into the evolving trends in payment methods, including the use of credit cards and alternative forms of payment in the airline sector.
Our Guest: Kristian Gjerding CEO at CellPoint Digital
Kristian Gjerding is a multifaceted professional, renowned for his dynamic roles in the realms of travel, payment orchestration, and entrepreneurship. As the CEO of CellPoint Digital, he leads the charge of orchestrating innovative payment solutions in the ever-evolving digital landscape. Beyond his role as CEO, Kristian is a passionate traveler, allowing him to deeply understand the needs of the modern consumer in the travel and transportation industry.
With a strong foundation in critical business technology and a specialization in Payment Orchestration Platforms, Kristian is equipped with the experience and vision to drive transformative change. His extensive background in payment and commerce orchestration makes him a trusted advisor to global and regional clients, particularly in the transportation, financial services, and retail sectors. Kristian is known for his proficiency in crafting omnichannel strategies and payment orchestration solutions, which include the integration of wallets and mobile payment systems. His prowess in these areas positions him as an authority in the ever-evolving fintech landscape.
Moreover, Kristian Gjerding is a sought-after speaker at prominent events within the airline, financial services, and retail industries. His insightful presentations and expertise provide invaluable guidance to industry professionals looking to stay ahead in an increasingly competitive landscape. With a blend of passion, expertise, and a visionary approach to technology and payments, Kristian continues to be a driving force in shaping the future of digital commerce and payment orchestration.
Kristian Gjerding: I think the next 3 or 4 years you’re going to see upwards 90% of content is going to be AI-generated. That will be the beginning of a loss of credibility. I think it’s going to evaluate these social media channels significantly. The spillover effect from that is consumers travel is going to be very concerned about their privacy. There are some quite significant number of people who shifted their smartphones out with dumb phones. The old Nokia 3003 ten, and it’s a significant number. It’s just not 1000 or 100,000. It’s percentages of the population. We’re going to see people withdrawing from the data pools, and that’s going to put pressure on the effectiveness of some of these things. It’s going to create a new form of contact between consumers and their brands because people are sick and tired of getting tracked everywhere.
Jacob Hollabaugh: 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.
Jacob Hollabaugh: Hello, everyone. Welcome to Payod. I’m your host, Jacob Hollabaugh. And today on the show, we are going right to our core topic matter. Diving deep into the payments world and talking about payment orchestration, how the whole payments chain operates, how it could be done a bit better, and a whole lot more here to help share his thoughts on these topics and more is Kristian Jourdain, CEO at CellPoint Digital, a leading payment orchestration company that is making payments profitable for airlines, travel, e-commerce, and marketplaces. Kristian, welcome to the show. Thank you so much for joining me today.
Kristian Gjerding: Thank you, Jacob, for having me. I appreciate it very much.
Jacob Hollabaugh: Absolutely. The pleasure is all mine. Let’s start, if you will, with just a little bit of basics, a little overview of the role of a payment orchestrator. Can you explain for the small and medium-sized business owner portion of our audience that isn’t as in tune with the payments ecosystem? What payments orchestration mean in layman’s terms? And then at a high level, why it matters may be the top line most simple reason that it matters, as I’m sure we’re going to get into much more detail and hit a bunch of the reasons it matters throughout this conversation.
Kristian Gjerding: Yeah. So payment registration is really like what ERP is for managing the product supply chain. It is the hub that manages all the spokes that a business needs to manage in order to manage their financial supply chain. And so you can consider payment orchestration as a centralized platform for any merchant that has a complex payment ecosystem that gives them the ability to control, deploy, optimize, operate, and report on the entire flow from B to C to B to B. And so it’s from where payments begin in the consumer traveler part of the of the chain, all the way through into where you are settling with your suppliers and partners.
Jacob Hollabaugh: And has how long is payment orchestration been around? Because obviously at some point way back payments were a little more simple a long, long time ago. And at some point, they became a little more complex and orchestration would have had to be a part of it. But I would definitely think regardless of when it came about and what the landscape has looked like, that the last decade to two decades has seen a massive amount of change with the digitization, the globalization of all things commerce and finance, and just the complexities that opens the door and the need for more payment orchestration and much more better systems around these complex systems that have blown up in the last decade or so. Would I be correct in that, and if so, is there any big inflection points you can point to where things really took a turn or a big jump for the industry?
Kristian Gjerding: Yeah, I mean, so this is my second venture, my first company. I’m an enterprise guy in the back in the day, I used to work for the big Silicon Valley mega brands or not brands, but vendors back then, technology companies. And I started my first company in 2001, and it was a complete pivot to something completely different. I was into what became mobile commerce, content management, content distribution, and particularly billing around content. And so I started working with mobile network operators and new forms of commerce if you wish, and we were distributing things in a new channel at that point in time. Mobile devices were really big in Europe but had barely taken off in the US when I started that company, and we partnered with some of the big telcos in America, we built this platform connected with the content providers and with our merchant clients, which was typically big consumer brands, and they were using this platform to distribute content, knows all about billing and how do we get money from it. And then it evolved into we could also actually take money directly from consumers using this new text message back channel, which became premium SMS. And then I came out of that with the combination of my enterprise background and this sort of four years in the trenches on this before I sold it, and I figured out that there’s going to be a new sales channel, it’s going to be digital.
Kristian Gjerding: And remember, the internet had come about and we were seeing a lot of stuff happening on the internet there at that 2001 to 2005 for real mobile devices really became the norm also in North America and globally. And then we saw that there are actually forms of payment that have nothing to do with the traditional cash checks, bank wires, and credit cards. And I said no. And I thought, hey, I actually think that the world is going to change a little bit. I think that this will drive a lot of opportunity for big global merchants and regional merchants who wants to exploit these new channels to sell. And I do think that the payment ecosystem will begin to the payments environment landscape would begin to fragment. And so I pinged the CTO from my previous venture and I said, hey, look, how would you like to go at it again? And so he became my co-founder and we started in 2007. We joined every major organization we could find. So industry trade group like NRF, Arts, Mobile Forum, Nacha, whatever. And you had all the payment companies on one side and all the merchants on the other side, and we started we hired a few specialists from my previous life enterprise people who understood some of the legacy challenges that were there, and the objective was to create a commercial orchestration platform. That was the objective from day one. So this is 2007 when the concept was on my behalf of least invented, if you wish.
Kristian Gjerding: And I don’t know if there are other companies who were before that, so I don’t really know. I never saw anybody. I never heard about anybody. The first time I heard anybody other than us talk about payment orchestration was probably in 2019. It doesn’t mean that we necessarily invented it, but we had that was the intention from the get-go. Right. So commercial orchestration is what we call it to begin with. And the intent was to manage the flow between these new digital sales channel across the legacy environment of the enterprise and out into the payment ecosystem. And so in 2010, we launched the platform in its first iteration with a real client. And that was actually orchestrated. I mean, I don’t think it was. For orchestration, we were orchestrating across B2C and B2B payments. We deployed one of the first and most successful alternative forms of payment, called mobile Pay in the Nordics, which we launched it, and within 24 hours, 23.8% of all transactions shifted from credit cards to this new form of payment. So that’s overnight. That’s within 24 hours. And now it accounts for 6,570% of all transactions. So very successful built by Danish Bank. That actually came out of a collaboration amongst many of the Bank of the Danish Bankers Association and other project we were members of. So we took a very structured approach to this in the beginning and said, hey, let’s build this platform.
Kristian Gjerding: We took the years we had some money, so we didn’t need to go for outside funding, and we started deploying the platform. And we were incredibly lucky, quite frankly, that we had this real client because they had an immediate need to go full digital. They had a very manual ticketing process and they had to go digital overnight. And so that was an optimal client for payment orchestration. But probably what I would call the first adopter or among the first adopters way, way early. We were still in the early piloting phase from a market perspective. And so what happened then was we clearly identified that we did that with a partnership with Worldpay. That payment orchestration was probably most optimal for airlines, and for a number of reasons I’m sure we’re going to discuss in a minute. And so we went to Emirates. And Emirates is a very sophisticated client. They have a pretty strong payments team and had already built some orchestration capabilities in-house back in 2011, 2012. And so we added capabilities to to that platform and things took off from there. And so I would say that as an understood concept within airlines, there are probably a few that were pretty early on, I would assume KLM also, which typically KLM has been pretty far ahead, was also there, and a few others. But we had to come into mid-2019 before we began to see there was a few airlines.
Kristian Gjerding: We had Cebu Pacific come to us with orchestration needs back in 18, I believe we started talking to them or we’re at that point when it was real. But into 2019, we began to see an early majority in the airline space. So this is the airline space. Obviously, I’m not an expert in retail. I haven’t seen that come about, but I’m sure some of the very big brands like Walmart, Amazon, etcetera probably built some functionality around orchestration without necessarily considering orchestration. So as we come into 19, we began to see actual requests for proposals come out from some some airlines saying, hey, we’re looking for orchestrating capabilities using various names forward. But but that’s what that was the gist of it. And so coming to 2020, things were taking off real fast. And then obviously Covid hit and set things back three years. So that is what I think was the beginning of it. And I think it’s a natural progression. I think any having been around for a while has these benefits drawbacks too. But one of the benefits is that you get to see this stuff repeat itself across different industries. And so ERP is a perfect example. When I started in IT, companies would pump in three $500 million up to $1 billion building some form of ERP solution, which was just nightmarish and often failed. And lo and behold, here is SAP with, I think, R2 in the beginning I can’t remember there was an R1, but R2, and then R3 came into play and it really began to be.
Kristian Gjerding: I wouldn’t call it commodity by any stretch of the imagination at the beginning, but at least it was a platform with particular capabilities. And I think the invention of the platform from a software perspective really began to emerge early 90s. And then it really. Transcended into this more sophisticated perspective. And so when we started from the get-go, we knew it had to be a platform. It had to be a platform and not a service. A platform that was client-controlled and owned, with the ability to manage multiple different components of their own ecosystem. The digital sales channel and again, the fragmented payment ecosystem. So we started presenting it as that. Around 2010 to the market. And I’ll be honest with you, a lot of times we met merchants who said, yeah, that sounds great. We don’t have that problem right now. But when we do, this is how we want to solve it. And so there you go. That’s being. Timing was probably way early. Fast forward to 2023. In the past three years is really as airlines come back for us has taken off significantly. We now have a whole range of clients launched. And as an announcement, the most recent win is Oman Air. Obviously together with Brand Space where we won an orchestration platform.
Jacob Hollabaugh: Yeah, it’s a fascinating story, and definitely would rather be a little early than any bit late. And so while it took a lot of patience, I’m sure there was a part of you that went hearing, we don’t need that right now. In your head, you’re like, but I think you will. And you are confirming my original hypothesis here, that you saw this issue earlier than most. And then it also makes sense that you would eventually find the airline industry as one of the first ones that says, we need this first, maybe. Yes, one day. And I think from other guests we’ve spoken to, I can confirm, yes, there are orchestration happening and a lot of different industries and everything, but that you found one of the ones that would need it first and are on the front lines of it. Let’s talk about the airline industry a little bit then because it is an interesting that fascinates me, both from a payments perspective, but really entire operational perspective. I think it’s one of the few industries that you can truly say is unique to itself like it has its own kind of set of variables that very few, if any, other industries are working off of anything similar. So it’s always a fascinating thing to dive into. And on the payments front, it certainly, as you’ve pointed out, and you built the company around, they were one of the first ones to have the level of complexity and have this need for a platform and for an orchestration system. What makes it beyond the first obvious things that might stand out to someone when thinking about the airline industry? What makes it so complex or so difficult to operate in from a payments perspective, that caused them to be the first to raise their hand and say, we need something to help move these things apart. We’re missing the whole middle of this entire system.
Kristian Gjerding: So the industry is a very complex industry for a whole range of reasons. The number one is that they’re transporting two, three, four, 500 people in. I wouldn’t say a tin can because that’s a simplification of something quite sophisticated, but they’re doing that in a tube in 35, 40,000ft. It’s 550 miles an hour. Right. And they do that for many, many hours and thousands of flights a day and whatnot. So it’s a very governed industry, a lot of legislation. They need to have things very much in the control. They’re risk-averse for all the good reasons, all the right reasons. When you look at the product and the airline is selling, they’re literally selling a product for consumption anywhere from tomorrow through a year or even longer, maybe. And it’s a product that is where the price changes all the time. It has a lot of ancillaries associated with it. It touches a whole range of different, both physical and digital stakeholders in its delivery. And so when you think about that, that entire environment, it becomes very, very complex from a technology perspective and from an operational perspective. And so not only are they cross the border, not only do they sell to a very sophisticated or very complex product that has multiple physical assets across many different geographies, many different currencies, many different local regulations, a lot of different subsystems, as I said, with extreme requirements upon them for accountability.
Kristian Gjerding: As a particular example, you need to stamp the form of payment that passenger uses on the record locator, which is not an easy task. It sounds easy. That’s not easy at all. And that has to follow it all the way through. In case you need to do either a full or partial refund down the line, or the passenger want to change something, or the passenger potentially bought a ticket with some ancillaries, and then they bought some additional ancillaries later on. And this whole shebang has to be managed in one environment. And so it’s not just a matter of taking a payment and then looking up and saying, hey, if you sent back the package, I’ll refund you your money here. So many different things can happen. Flight can be delayed, it can be cancelled, rerouted. The airline may have to add additional components to the ticket or to the product due to these things. And so all of this needs to be taken into consideration. And then they need to reconcile it, report on it, distribute it, or disperse it to their partners down to the penny. So it is pretty complex. They are obviously exposed to fraud. So on. Awful charge bags, all different kinds of similar risks. So all this needs to be in container into one that makes it very complex.
Kristian Gjerding: Then they’re operating in a system which for, for, for all the good reasons, were established quite early, where the inventory of the airline could be distributed through a third party at right. And so they had to use a common language for all airlines to be able to utilize these databases and that add another layer of complexity. So in the beginning, airlines were selling all their inventory either directly you went to a travel agent, their own travel desk, and that was it. And then as we went into the early 2000, the airlines began. I think there were a few airlines that started earlier, and I can’t exactly remember when, but they started selling inventory directly online in a website. I remember actually that in my previous life, I sold a ticket sales solution to using voice response. That was a Scandinavian flight going between Copenhagen, Oslo, and Stockholm. So pretty straightforward, but still fairly complex. Now you have this massive ecosystem of a whole range of stakeholders internally in the airline and outside the airline partners, vendors, all these different things going on. That is why the airline payment ecosystem is very complex and there’s a lot of dollars at stake. An airline is obviously focused on ensuring that everything buttons up or everything aligns, and they want to make sure that the passenger has the ability to complete the payment.
Kristian Gjerding: Once they decide to stay in the basket and buy the ticket, they want to be sure the students that they can take payment for it and they get paid for it in a rightful way, and that they can report on it and they can reconcile it and they can comply with local, local legislation. And so. As airlines, like every other brand, needs to do more with less. As back-office functions and reporting requirements become more and more complex. And we can just look at PCI and GDPR, Soc1, Soc2, and all these other regulatory compliance definitions. It just becomes more and more and more complex. It starts growing and the volume starts growing. The transition from an indirect to a direct sales channel grew the volume of transactions that the airlines have to handle themselves. And if you take a simple equation, you got all these stakeholders, all these currencies, forms of payment, and then you got, what, 10,000 passengers across a thousand flights a day or whatever it is, and you multiply that by 365. You got billions of transactions happening, individual interactions that you need to track and monitor, and control. And the only way you can do that when it gets to that level is through a centralized platform.
Jacob Hollabaugh: Wow. It’s certainly a lot when you put the number, actually do the numbers, and do the math out like that. It’s pretty crazy. And I would imagine I mean, as I referenced in my original question, it’s such a complex industry. And as you were talking, the only other thing I can even think of now is there are some other ticketing. Like I was actually thinking I would bought some tickets for a big show last night and was thinking like they’re the only other industry that has a similar thing with their inventory being so tied to a specific thing at a specific time that a bunch of people might be trying to get. And I imagine that that in the back end, part of running that portion of it is one of the many things that you referenced there is making things incredibly complex because you’re putting something maybe on hold for just a small amount of time. Does it actually go through? And just a lot of complexity, but a lot of opportunity on your end to be the one that can come in and say, I can make sense of this, I can build the platform that all of this can run cohesively on. Let’s talk with that platform. You’re obviously partnering with an incredible amount of people, integrating with an incredible amount of people in all parts of the payments chain and all parts of this big, complex operation that we’ve just described.
Jacob Hollabaugh: One of the things you state on your website is that you’re provider agnostic, and I wonder with that one, if you have any sort of numbers around, like how many different methods or providers you are integrated with, just because it would probably be another number that would blow me and listeners away. How many you have to facilitate there? But on the provider-agnostic side, was that always the intent? And I’m curious if there are some of the larger providers that are ever coming in wanting to build some sort of partnership where they would maybe gain some leverage within the platform to be first in line of the providers more often than not. So can you give me any the kind of philosophy or the background behind wanting to be provider agnostic? What benefit that maybe gives to you, to the merchants you work with? And if that is the norm or the norm you think will continue? Or do you see some other companies or a point in the future where there might be a provider that comes in that says, we only want to operate with you if we can get to the front of the line, so to speak?
Kristian Gjerding: Yeah. So I would say fortunately we haven’t met providers that have acted that way. I think we have a really good relationship, particularly with the acquirers. I mean, with a lot of providers, really, I would say everyone really but acquires are pretty professional companies. We do we work really well with the likes of Adyen, Worldpay, et cetera. I mean, we got strong partners with them. The reason why we wanted to be agnostic was that. We most certainly have partnerships where they come to us and say, hey, we’re willing to pay some upfront money if we can get this and this build-in or this and this done by that date. And for sure that’s not a problem. I think that’s a different thing because it’s not for a particular client. It’s just to get on the platform. We want to be agnostic in that when we go to a merchant, they will know that for what we call traditionally payment services. So acquiring, processing, fraud, whatnot, these things are not tied to what we want, but what the client needs. And we have an integration factory. So if a client comes and says we need this provider as part of our contract, we will integrate to that provider to make access. And we don’t sit contractually between the airline and that provider, we obviously do. When it comes to APms, we select partners based on their breadth and capability and simplification or easy how easy they are to work with for sure.
Kristian Gjerding: But we make our money from the merchant and if we get a commission on things, we make it very transparent, right? We want to make sure our clients understand that we don’t get commissions on acquiring, and we think that’s always the intent not to do that for a very obvious reason. If I’m a merchant and it comes to me and say, hey, we can help you lower cost and we can increase conversions and we can do all these different things, how can that be true if you are not acquiring processor agnostic? If you don’t have that capability, then if you’re tied to someone because you’re going to get a bigger commission there, then you got a problem. And we just want to stay away from that from the get-go without knowing it. Because I will be honest with you as well. I don’t know the other orchestrators that well. We don’t see a lot of them in the airline space yet, and so we don’t know what their business models are. But I think airlines are smart people. Most airlines have payments team. They’re pretty savvy technology buyers. And so they will quite quickly figure out if what they’re getting is not really kosher. If you wish. I don’t know, kosher might be a strong word, but at least establish in a way that’s transparent.
Kristian Gjerding: It has to be very transparent and that leads to the next thing we do evaluate addition, the value calculation framework, where we work with the client to make sure that they and we fully understand what is going to be the financial benefits from deploying orchestration. And there’s a whole range of parameters, many parameters, several hundred that we measure on and calculate on and look at pertaining to markets, type Typekit tickets, HBS, all these different things to make sure that everybody understands that. And in that process, you got to be completely transparent. They need to know what’s going on. So I think that’s important. And I think that’s what we want it to be agnostic also. So a merchant can come to us and say, well, we prefer this provider over that provider for whatever reason, whatever they may be, because it’s not just payment providers we connect to. It can be loyalty platforms, reservation engines, other components. Because in the airline space, if you don’t go really, really deep technologically, and if you sit on the outside and you’re just an API to connect into, then there is probably limitations to how much value you can add to what we consider orchestration. If you truly want to orchestrate the financial supply chain, you’ve got to be very deeply integrated. You’ve got to have very deep domain knowledge.
Jacob Hollabaugh: Yeah, certainly. And especially with everything we’ve said about this particular industry, I think that is something that would transcend this industry. But this one amongst all of them would be as important as any that you’re deep and entrenched in. They’re not just sitting on the outside looking at it, saying, this might help the way you describe there. Let’s turn to a couple trend related topics to close us out here. As a payment orchestrator, you do have kind of an interesting vantage point, or one I find interesting at least of getting to see on the one end, like the actual payment types and avenues that are being used in the most popular at any given time. You’re one of the few people that would have that data to step back and look at everything and see, oh, this is gaining little steam. This is becoming a little bit more popular. This is becoming a little less popular. Are there any standouts as far as newer payment types that are you’re seeing maybe either grow in market share or being asked to add in or incorporate in integrate with most right now, be it something like a buy now, pay later mobile wallets, any standouts? When you step back and look at the whole system that you’re operating on and platform you’re running of this new thing, this new idea is gaining steam, or this is maybe losing steam and losing out some of its market share.
Kristian Gjerding: For sure. Buy now, pay later is a very attractive model for airlines because typically their inventory is more expensive than the average ticket item in e-commerce, or at least in some e-commerce areas.
Jacob Hollabaugh: Potentially being bought way far out to. I don’t know if that would impact it at all, but just had that thought too. Of if you’re buying very expensive flight for six months from now, unlike a lot of things with a buy now pay later where I’m buying it and have the good right now and eventually paying it off, you might get a six-month payment plan and still have paid it off before you actually receive the good in the case of a flight. So yeah.
Kristian Gjerding: Absolutely. And I read an interesting report the other day that said that consumers are using it for that because that is a way for them to save up for their vacation. And so they don’t have to save up first and then buy the ticket, then the wait six months to go. Because typically if you look at a ticket, right, it’s always good to buy early. So if I want to save up money and then buy a ticket and buy it early, I’m not looking at a year where I buy now, pay later gives me the ability to buy now, fly in six months and I still have saved up for my ticket just using the buy now, pay later and I pay some interest on it. So we’re seeing that for sure. We’re seeing Apple Pay in America being very strong. PayPod as well, for sure. We are seeing a range of local forms of payments around the globe. Depends very much what region you’re in and that really changes. Apac is a multitude of local forms of payment. Same in Europe, ideal obviously in Holland. And then you see others in the Middle East and Africa. So it’s really market-specific what APM that is successful for airlines. There’s new ones coming for sure. We’re seeing some it takes a little bit of muscle for things to become attractive for an airline. Airlines are really looking at how big is the share of passengers doing it. And there’s another thing which is really interesting. Passengers will typically still buy the ticket, so if I can’t use the phone payment at one, I probably will still buy the ticket.
Kristian Gjerding: But I go through a travel agent, an online travel agent that has more payment methods that I want, which means that for the airline, the price of the transaction just grew by what, 1,000% or something along those lines? Whatever. Some number, very big number. Right. Because the charge charges quite a lot of money for facility ticket. So it’s not like the airline necessarily loses the sale. They just pay many times more for the same sale. And that’s really a driver for them to offer the right form of payment at the right time. So again, if you look at the very big trends, PayPal, Apple Pay for sure where you’re seeing buy now, pay later, come in and there are some other ones that will begin to emerge. But WhatsApp pay even though we haven’t really seen it big time in the airline space yet that are also in merchant APMs alternative forms of payment will shore credit cards are still used a lot for other good reasons, and then you’ve got some business travel credit cards that are also being used, like ATP, which we are seeing quite a lot. Obviously, for business travelers, credit cards offers a lot of advantages. Again, it can have a revolving credit. It might not be as long. It depends which kind of credit card you have, but it does provide that. And it also gives some security. If you’ve got issues down the line in regards to chargeback or refunds. So that’s still used quite a lot.
Jacob Hollabaugh: Yeah, certainly we’ve spent a lot of time on this show throughout the year talking about the topics of AI and machine learning. Even VR spaces occasionally referenced lots of new technologies changing the way the financial world operates, but really the entire world operates. What types of impact do you think these types of new technologies will have on the payments industry, on the airline industry, or even other marketplace-type situations that you may eventually be working in?
Kristian Gjerding: Let’s talk the outline of the payment space specifically. So I offers a lot of opportunity to simplify and automate on the back end, which it really means efficiency, right? You can do more with less. And that’s a big deal for airlines though. They got to make sure these systems are absolutely functional and they don’t do what we see. On managing data. You got to be accurate. This stuff has to be precise. Now when it comes to numerical computation for ice analytical capabilities, it is beginning to be pretty solid. And so when you combine AI with analysis or pricing models for airlines, for the tickets and the ancillaries, we’re going to see a massive impact. We’re going to see some customer service-based things being taken over by I would think, or at least they’re going to be able to handle volumes faster, better. So the agents could be more specialized. The agents they have can be more specialized. And I will take sort of the brunt of the blow if you wish. When it comes to payments, analytical is absolutely fantastic. You’re going to see some routing, and some optimization capabilities being handled by AI. Fraud is a big thing. But I will say and I gave an interview I think yesterday at the other day, two payments on that, which was that AI is a tool which sort it’s great for helping combat fraud, but also great to conduct fraud. And we’re going to see a lot of that happening. And I want to say just one thing, which I think is important for everybody to understand. There is a big deal on privacy going on, and that’s going to increase.
Kristian Gjerding: And I think the world will see that when AI begins to fill content LinkedIn, Twitter, etcetera. I think in the next 3 to 4 years, you’re going to see upwards 90% of content is going to be AI-generated. That will be the beginning of a loss of credibility. People will seek other ways of communicating and staying informed. I think it’s going to evaluate these social media channels significantly. The spillover effect from that is consumers travel is going to be very concerned about their privacy. If you take the Nordics again, there are some quite significant number of people who shifted their smartphones out with dumb phones. The old Nokia 3003 ten in the last year, and it’s a significant number. It’s just not 1000 100,000. It’s percentages of the population. So what’s going to happen is we’re going to see a data to privacy if you wish. We’re going to see people withdrawing from the data pools. And that’s going to put pressure on the effectiveness of some of these things. It’s going to create a new form of contact between consumers and their brands because people are sick and tired of getting tracked everywhere. A super scary thing is, in Denmark, actually, the government has the only legal way for you to as an online commercial brand to trade online, which means I have to use their 3DS solution, which is a very complex and complicated environment, and you have no clue if the government’s tracking your online purchases, which is really stupid. People are getting tired of this. In this new world, we see all these things going on with geopolitical problems China, this, that, and the other, and I can collect all these data.
Kristian Gjerding: So I think down the line, quite frankly, I think we’re going to see a pushback from the consumer base saying, hey, my data is really mine. I don’t really want to give it to you. I know if I want to fly, I got to give you my passport. And not that the airlines wants the passport. I just want to tell you flat out they would love not to have to take it. So I think we’re going to have to see some solutions come up that will circumnavigate the pushback against these technologies. Augmented reality and virtual reality is a different components to this, which is more an experience-based scenario where where I think that’s going to have a big positive role in many ways. Also, for airlines, you’re going to be able to see the cabin, the seat you can take. I mean, they’re going to be able to sell premium seats at a higher price. It’s going to give them an opportunity to make more money. You can show the meal. It’s going to give them the ability to be I wouldn’t say, retailers. There’s been a lot of conversations about airlines being retailers. They’re not really retailers. They’ve got limited product portfolio. There are travel companies and their primary product is for you to be on the plane. But I do think they’re going to utilize these technologies to positive effect. But I it will help them do some things. But I think consumers are going to be reluctant down the line to release their data. And that’s going to make for more complex.
Jacob Hollabaugh: Fascinating, too, because we definitely have here in the States where I’m located, much of the similar sentiment without maybe the action that you’ve referenced thereof switching the types of phones you use. And it is a fascinating problem, a potential problem to think of with all these different companies I talk to, and I almost talk to every one of them, either about AI or data analysis in general, and that everything is run on this. But what happens if you do get an actual sizable pushback from the consumer base that says, we’re going to take an action like switching out our phones, and now all of this, you’ve built your whole thing to run off of all this data that you’re able to collect. What if we remove it or are the ones that are able to? It’s not some law, it’s not you doing it. It’s the consumers themselves that remove access to that data that your whole thing is built off of. Can you still find a way to serve us whatever your product or service is, which is not the first thing that would come to mind when thinking about the future and it just being so data-focused? Everything but is a fascinating scenario to think through of. If that happens, what then for your company to be able to still serve the person that’s like, I don’t, I can’t do that on my phone.
Jacob Hollabaugh: I didn’t come through my phone. You don’t have this, that, or the other about me. I’ve called you. I have a passport. I would like to be on this flight. Can you still find an efficient, easy way for me to navigate my way from wanting to be on that flight to being on that flight and the payment and everything going through? So it’s a big question that I’m glad you posed, and I will definitely be thinking about it long after this conversation. The final question I’ll ask you then what is next for CellPoint Digital. When looking towards the future, are there any other specific trends you’re trying to stay in front of? Are there any other markets outside of just airlines, or other parts of the travel industry? Maybe marketplaces? Anything where you’re expecting to go? I know you referenced the numbers in the airline world earlier. It’s plenty big enough of a market to to serve a company if you never wanted to go anywhere else and just be the best thing for airlines. But are there plans to take what you’ve built elsewhere, or what’s just the next 5 to 10 years roadmap look like for you?
Kristian Gjerding: Yeah, absolutely. So alliances are very dominant focus. We did traverse a little bit outside travel during the Covid crisis because obviously, nobody knew how long it was going to be. And it’s clear to CellPoint that our product and platform is purpose-built for travel and particularly airlines. And that’s where we got our background. That’s where we got our domain expertise. We got a lot of people from both airlines and the other airline providers and payment providers. So we got deep domain knowledge. So we’re going to stick to our guns. In regards to that. We will obviously expand inside the travel vertical. We just launched Radisson three weeks ago, the hotel chain with the first property. So that’s a natural next step for us is within the various aspects of travel. We think there’s going to be some collaborative opportunities that we want to exploit. We’re partnering with some really interesting companies in the travel space that are some of the very traditional old companies that have been around for a long time who are looking for ways to expand their business proposition. So that’s really attractive to us. Ten years out is a long way. I am a firm believer of the diminishing predictability in the world. I think that there are a lot of strange things happening in the planet. If you just take from 2019 onwards, I think we’ve not seen as many major crises or changes or things that really can scope or refocus us from a technology perspective. You just touched upon AI. That’s going to be a big shift.
Kristian Gjerding: So we tend to look five years out. It’s not that we don’t think about ten years, but we look five years out and we materialize things three years out. And so if you look at that scope of time within the travel vertical, deepening the capabilities within what we call the financial supply chain. So we’re covering the whole thing and we want to expand what we can do within that whole thing. We want to really build on back office automation, simplification for the travel in the airline, and also improving the customer experience. And I’ll just say one last thing on that. One of the things I hate the most is the complexity in authentication of you as a consumer, right? I mean, half the time my apps lock me out. I can’t remember all my passwords, and I don’t want to have a password app on my phone that somebody can then take my thumbprint on my facial ID, and then they can just unlock everything. So there’s a lot of complexity on the consumer engagement environment, which I think needs to be solved without compromising security. And I think that’s a very difficult problem to solve. So we’re very engaged in that as well, looking at how can we make it easier to conduct these payment transactions for a consumer without getting rejected or just giving up because systems lock you out, throw you off, apps break down. There’s just so many different small components that has to be taken managed. And that’s really what we want to go with. Payment orchestration.
Jacob Hollabaugh: Yeah it’s fascinating stuff. Well, Kristian, this has been a real pleasure.
Kristian Gjerding: Thank you for having me on. I really appreciate it. It was fun.
Jacob Hollabaugh: Yeah, absolutely. And hopefully, we’ll maybe get to talk again soon sometime down the line.
Kristian Gjerding: I hope so.
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