In a world where innovation reigns supreme and dreams are transformed into reality, there exists Arcum. A testament to resilience, vision, and unwavering determination.

At the helm of this company stands Sebastian Builes, Co-Founder and CEO. In this episode, part of our Founders series, we delve deep into the heart of Arcum, a fintech startup that champions the cause of reducing merchant churn for payments companies.

Launched in 2018 along with Co-Founder Tad Zhang, fast forward to the present, and Arcum stands tall as the "darling" fintech startup in its vertical. Its journey, a continuum, culminated in being honored among Georgia's Top 40 Innovative Companies of 2024 by the Technology Association of Georgia.

Join us as we unravel the narrative of Sebastian Builes. Prepare to be inspired, enlightened, and empowered as we unveil the wisdom gleaned from his journey.

Cheers!

Desmond

Miscellaneous notes:

A book mentioned: The FountainHead by Ayn Rand

You're listening to Bridges to Excellence.

2

Inspired leadership in

payments and FinTech.

3

Networking is how do you

find your first clients?

4

How do you find your first investors?

5

How do you find your first partners,

and for that as a founder, you

6

need to be having conversations,

7

Going to different trade shows.

8

I always kind of jokingly say that, I was

going to trade shows when this was just an

9

idea, And my networking for me was talking

to people like you, Desmond, and saying,

10

Hey, Desmond, you're a First Data, right?

11

how big of a problem is attrition

in your line of business?

12

And whether you're an agent, whether

you're an ISO, whether you're full

13

blown processor, I was pretty shameless

to ensure that I would ask the right

14

questions to determine if this was

a product or company worth building,

15

Mhm.

16

That was Sebastian Builes,

co founder and CEO of Arcum.

17

Arcum has become a rising star amongst

Atlanta's based fintech startups.

18

In this episode, Sebastian delves

into what it takes in birthing and

19

nurturing an award winning startup.

20

Join us on The inside.

21

Welcome to Bridges to Excellence podcast,

inspired leadership in payments and

22

fintech, bringing you conversations

with payments, most fascinating

23

people on top of their game, leaders,

influencers, experts, and innovators.

24

Each weekly episode turns our

guests wisdom into practical advice.

25

Their personal journey starts now.

26

are meant to inspire and challenge

you to explore your possibilities.

27

Here is your host, Desmond Nicholson.

28

In this episode, part of our Founders

Series, our special guest is Sebastian

29

Builes, Co Founder and CEO at Arcum.

30

Arcum a fintech company,

at its core, helps payments

31

companies reduce merchant churn.

32

Sebastian, with an academic

background in economics and political

33

science, launched Arcum in 2018,

along with Co Founder Tad Zhang.

34

Since then has become the darling

FinTech startup in its vertical to the

35

extent where Arcum was recently honored

36

Companies by the Technology Association

of Georgia to learn more about the

37

leader behind this amazing company,

along with some actionable takeaways.

38

Then come along on this journey with us.

39

Enjoy the episode.

40

Mhm.

41

Sebastian.

42

Welcome to the Bridges

to Excellence podcast.

43

Thank you for having me Desmond.

44

it's great having you on the show.

45

and, excited to be able to share

a little bit about our journey

46

and how we got here all together.

47

Well done.

48

Now let's get into it.

49

Can you give us an introduction

overview of Arcum, your functional

50

role and who you serve as customers?

51

Then We'll circle back and

dive into the specifics of your

52

journey and the building of Arcum.

53

Absolutely.

54

So Arcum a payments platform that helps

essentially acquirers, identify who's

55

going to leave in their portfolio, who are

they going to leave, and providing steps.

56

Towards taking actions to ensure that

those merchants don't go anywhere.

57

So essentially at its core

is a merchant retention tool.

58

And we have added other functionalities

that allow, I think of it as a,

59

BI functionalities that allow our

clients to get a good sense of

60

how their portfolio is trending.

61

If I look in a very specific KPIs

throughout that book in terms of who do

62

we serve primarily merchant acquirers.

63

So merchant acquirers, anyone that

could be an ISO payments, payments

64

facilitator, ISVs that are embedding

payments into their core offering.

65

So essentially everyone within

that vertical, is kind of

66

a potential client of ours.

67

Good.

68

Now, let's get into your backstory.

69

Take us to your earlier life, where you

grew up, what your life was like growing

70

up, and where did you go to school?

71

Oh, man, you want to take this

back, give a little sense.

72

I was born in Miami, raised in

Miami, but I did live, by the time

73

I was one, I moved back to Columbia.

74

My mother and siblings, I spent

there the majority of my early

75

life before going back to Miami.

76

went through school out there and

then ended up at Florida State

77

University, where I did both

my undergrad and grad school.

78

And I think you mentioned earlier,

economics and then later on a

79

master's in applied economics.

80

how and when did you get into payments?

81

What was the path?

82

The path.

83

so I got a job out of grad school

basically helping publication

84

companies reduce subscriber churn.

85

So my job out of grad school essentially

work with top publications like New

86

York Times, McClatchy Corporation, and

the job role was very straightforward,

87

Build these essentially churn models

or retention models to identify what

88

subscribers were likely to leave.

89

The publications that we're working

with, and does it for about a year?

90

And shortly after I ended up working

for EVO Payments and prior to

91

going to work for EVO, I knew very

little about the payments industry.

92

In fact, I always joke about this and

say, as I was doing my research on EVO, I

93

couldn't really figure out what they did.

94

it seemed a little bit of, a

multi level marketing scheme.

95

but I just couldn't put my finger on it.

96

but obviously after, interviewing and

meeting the leadership team, I got the

97

sense that this was, an industry that

really touched upon every facet of the

98

economy that I was very unaware of,

prior to walking into that, office.

99

It's now 2018, Arcum is launched.

100

How was the idea conceived leading

to adopting attrition mitigation

101

as a viable business model for

the payments fintech industry?

102

walk us through that light bulb moment.

103

Absolutely.

104

that's actually, one of my favorite

stories to tell because, I clearly

105

after grad school, one of my main

jobs was, essentially building these.

106

Predictive churn models

in the publication space.

107

And then when I go into payments, my job

was as part of the FP and a team was to

108

provide portfolio analytics insights.

109

That was one thing, right?

110

and during that job, one of my specific,

reporting, tasks that I had to do was,

111

compile a list of our top 500 merchants

that have left the EVO portfolio.

112

at the time there was very little.

113

there wasn't really much being done

as opposed to, just compiling this

114

list of 500 top merchants that left

across the different portfolios.

115

So, at one point I decided to,

pitch Jim Kelly and the idea that,

116

Hey, we can probably build some,

churn models to try to get ahead.

117

Of this attrition right by identifying

who's going to leave we can actually

118

intercycle or take action before that

account or merchant has decided to turn

119

So the idea wasn't I have to admit it

wasn't purely designed or created by

120

me I had been exposed to this concept

in my previous employer but it was

121

the ability to transactional data

that we had access to right and apply

122

it to a whole new concept or whole

new industry, which was payments.

123

and being the fact that I was one of the

four financial analysts and the team,

124

I had the ability to see some real time

data across the portfolio of call that

125

a million plus merchants, worldwide.

126

I was very blessed to

have a pretty decent lab.

127

to test this concept and really

see if the applications went beyond

128

publication and into the payments realm.

129

Great.

130

tell us about some of the major

hurdles you encountered in getting

131

Arcum off the ground and how you feel

it's strengthened Arcum as a company.

132

Wow.

133

The hurdles I can, we can spend

the whole day talking about that.

134

ground founder, first time founder.

135

It was every mistake you can

think of and every challenge,

136

pretty much had to be overcome.

137

Right?

138

So starting with the fact that, For

the most part, I never really started

139

a business, that was a big challenge.

140

the second piece or component of

it was, having this new idea of

141

leveraging data essentially would

require and acquire run ISO or payments

142

processor to send us over some data,

143

At the very beginning, what this was

just an idea of, we don't have a case

144

study, we don't have a proof of concept.

145

we don't really have a roster of

clients that we can go and showcase,

146

to have someone trust us with that

transactional or portfolio data, to

147

actually build one of these models.

148

so I would say the first obstacles

we encountered was really just having

149

access to a portfolio that we can

actually test this, concept outside

150

of my time at EVO Payments, although

I've been around or doing some type

151

of or started Arcum back in 2018.

152

It really wasn't until I would say late

21 that we're actually able to get a

153

data set to be able to test this out.

154

so from there it was, off to the races.

155

Okay.

156

So, why did you choose

Atlanta to set up business?

157

and I might add how would you assess

Atlanta's ecosystem for FinTech founders,

158

startups, pros and cons in terms of say,

environmental friendliness, talent pool,

159

educational institution, government,

state, economic development incentives.

160

Private funding resources.

161

Community support groups, in short,

why Atlanta and not elsewhere?

162

Is Atlanta truly a Mecca for FinTech

startups as it's touted to be?

163

Or is there more hype than substance?

164

I don't want to make any enemies given

that I chose to live in Atlanta, but

165

I'll tell you this, in a way kind of

Atlanta chose us same as payments.

166

kind of you always joke around the fact

that payment sort of chooses you in one

167

way or another and it was no different

for the way why we chose Atlanta, right?

168

for me, I came out of grad school,

started working here, then worked,

169

went to work for EVO payments.

170

And, when I was thinking about

launching what Arcum is today,

171

For the most part, I was very encouraged

by the fact that some of the largest

172

payments companies were here in Atlanta,

Obviously I came out of EVO, but if

173

you look across the street, Global

Payments was there, go down the road

174

and 400 and you'll find yourself a

First Data of building, which is now

175

the Deluxe building, Ella bond party

payment systems, NCR down in midtown,

176

So all.

177

The major players, whether you're

talking about big full blown

178

processor or a, independent sales

organization or an ISO, right?

179

They could all be found here.

180

So when it came time to deciding

whether we stayed here to build, my

181

Co Founder was based out of here.

182

I was based out of here.

183

so it really wasn't like we looked

around for any other options,

184

Given that people would often tout

as Atlanta being transaction alley.

185

And we decided, well, we're going to

be building a Payments or a product

186

that serves payments companies.

187

we're better off doing it here, in

terms of how friendly it is, obviously,

188

you mentioned some of the good things

about atlanta talent pool, right?

189

We have a team of 11 today Everyone is

based out of Atlanta We have Georgia Tech.

190

We have Emory.

191

We have G.

192

S.

193

U.

194

We have, U.

195

G.

196

A.

197

So a heavy concentration of universities

literally around their office, In terms

198

of ecosystems that we can partake.

199

we're building our office today

is in the Atlanta Tech Village.

200

Very famous for some.

201

Huge unicorns to have come out of here

including Sales Loft and Calendly, So

202

we're amongst good company, in terms

of some cons and i've openly always

203

thought about this, Although we do

have all the ingredients necessary to

204

build a great business here in Altanta,

205

One of those key components especially

when considering building a huge

206

enterprise is capital or access to

capital, so I would say maybe access

207

to capital here is not as mature as

other places like New York California

208

and so forth, But I think that you do

have pockets or individuals that do come

209

from the industry and have a tendency to

write checks around here so we can maybe

210

circumvent some of those early challenges,

211

But from a community perspective, I do

host a monthly founders meetup out here I

212

try to get together 50 to 60 founders once

a month at the very least to drink, have

213

some food, And really discuss closely in

terms of some of our challenges that we

214

may be facing, to learn from one another.

215

So, you're supported?

216

yes.

217

we are, obviously, we're also an,

I forgot to mention, ATDC company.

218

So ATDC is one of the oldest

accelerators in the country,

219

which is part of the Georgia Tech,

Institute down here in Midtown.

220

So, from the standpoint that we

see it, we couldn't think of any

221

better place to be building our

business than here in Atlanta.

222

Well done.

223

what is the mission of Arcum,

and why is Arcum an asset to

224

the payments fintech space?

225

Great question, Desmond, you have plenty

of experience working with the likes of

226

First Data out there in the world, right?

227

And one of the challenges, that you

experience, whether you're a big blown,

228

big processor like First Data or Evo

Payments, for that matter, all the way

229

to, uh, Joe Schmoe's ISO from around the

corner, is as that portfolio continues

230

to grow, There is a big challenge in

terms of how do you engage with that

231

customer base in a way feels like you're

providing a white glove service approach,

232

Which is currently not being done,

Everybody knows who their top 100 top 500

233

merchants are But when it comes to that,

who's the rest or that 80 to 90 percent

234

of the portfolio, it's very challenging

to have some visibility into there, so our

235

solution, it's in essence is an engagement

tool, to leverage data, leverage AI.

236

Pinpoint those accounts that may

be unhappy or dissatisfied with the

237

current offering from their providers

and point that out to our end users

238

or clients, So they can engage those

customers or merchants to ensure that

239

they're having a good experience.

240

And if they're having a bad experience,

they can actually intervene to

241

ensure that those bad experiences

can be alleviated through new

242

products, new services, and so forth.

243

Okay.

244

when you have a very competitive

market, people figure out

245

innovative ways to differentiate.

246

What in your product suite offer

that kind of value differentiation

247

that benefits your customer?

248

I would say industry knowledge, right?

249

So although we do compete with other

customer success tools out there, uh,

250

TrendZero, Plain hat just to name a few,

251

We are the only ones who focus in the

financial services space specifically

252

payments, so payments is very complex,

right in terms of hierarchies you have

253

bank sponsored payments processor You have

a super ISO sub ISO agent merchant, and

254

the intricacies within those hierarchies,

can make it extremely difficult, to

255

build viable models that actually help

predict and identify accounts that may be

256

likely to churn, so it is that industry

focus and expertise that we rely on.

257

to build a differentiated product,

Our software is just a way to deliver

258

those insights, And everything within

our software is custom tailored, to

259

meet the demands of a payments user

or a payments company for that matter.

260

Okay.

261

Let's talk about one of your customers.

262

You could select any customers

you you want in your portfolio

263

on the Arcum platform.

264

And let's focus on use case scenario

and talk about the before and after.

265

Absolutely.

266

So we're seeing, upwards

of 1 percent increase.

267

In revenue in six months and

just to give you an idea of

268

what that represents, right?

269

Because you can sometimes get lost in

the figures How do we get to 1 percent

270

increase or a revenue lift in six

months and a lot of that is really?

271

recapturing or retaining some of that

lost revenue that would be attributed to

272

attrition, So a specific use case will be,

for example, one of our users logs in and

273

sees that one of the largest merchants say

processing north of $100, 000, it's about

274

to be, or has been identified at risk

of churning for product reasons, right?

275

Just say product reasons, and there

we're meaning specifically the terminal

276

or point of sale, At which point once

our client or end user knows that

277

merchant is likely to churn for terminal

or product reasons They'll reach out

278

to that account right in this case.

279

Maybe desmond's pizza shop and say

hey desmond This is Sebastian with

280

Arcum Payments calling to check

in on you, see how you're doing.

281

My user already knows that you're going

to be leaving in the next 12 months,

282

that you're experiencing product issues,

But we're coming into this conversation

283

along the lines of, this is a courtesy

outreach to see how you're doing.

284

At which point the merchant would

usually say, yes, I'm actually

285

experiencing issues, specifically

with my terminal having difficulties.

286

Maybe charging or maybe having

difficulties with, firing it up

287

in the morning as I get there.

288

So instead of arriving at 7:30 as the

time I should be, I'm actually getting

289

there at six 30 to ensure that the

POS works properly before actually

290

opening the doors to the store.

291

And that's just one facet,

as is product related.

292

Sometimes most often we see

a lot of funding issues.

293

that emerged that perhaps the merchant

is growing really fast and at the

294

beginning when risk and underwriting

decided to set their risk parameters,

295

they put an average ticket hold in

there that anything beyond would get

296

funds withheld from the merchants,

297

Perhaps the merchant sent over three

months of banking statements, but risk

298

and underwriting can be a little detached

sometimes from the customer success team,

299

So we see often that we flag an account

likely to leave maybe same reasons maybe

300

product reasons for example and as our end

user calls that merchant they learn that

301

they've been having funds being withheld

for them for several months at a time

302

So although that merchant acted, sent over

their statements to the ISO or acquire,

303

end user will call that merchant, realize

that those funds are still being withheld,

304

go ahead and release those funds, And

also update risk and underwriting to

305

ensure that no funds will be withheld

for that merchant again, simply because

306

that account is growing relatively fast,

307

So those are just a couple of facets

in terms of one of the couple of use

308

cases that we have seen internally.

309

where our product has done really well

to help or stem some attrition, that

310

would be, a result of not solving some

of these issues in a proactive manner.

311

Wow.

312

I didn't know you go that deep.

313

We go pretty deep.

314

We go pretty deep.

315

And again, a lot of the insights

that we're able to derive right.

316

they all stem from the access

to the information that we can

317

see, which is transactional data.

318

I always talk about how much we can learn

about a business or a merchant based on

319

that historical transactional information.

320

Right.

321

And, we can even pinpoint, other

assets or other facets like service,

322

pricing issues, That may be stemming,

in, it's all stems from that.

323

Processing data that we

obtained from our clients.

324

Okay.

325

if you can share, and I don't know

if you can, how many rounds of

326

funding has Arcum received to date?

327

we only done one round of funding, say

friends and family round, a little bit

328

less than a quarter million dollars

at this point, alter angels, payments

329

angels, local Atlanta angels, non

institutional investors at the moment.

330

Okay, good.

331

Thanks.

332

what was a low point in your

entrepreneurial journey?

333

What was that like?

334

in retrospect, what would

you have done differently?

335

Oh God, there's, this journey

is filled with low points.

336

I'd say, I would say the lowest points

are usually when the personal and the

337

business sort of mix, give me an idea.

338

I lost my mom last summer.

339

and that was one of the hardest, most

difficult moments or periods of my life,

340

At which point I had to really

decide, Do we keep this going or do

341

I just throw in the towel and focus

on something that requires maybe a

342

little bit less of my blood and sweat,

decide to opt for the latter, and

343

really double down in the business.

344

At that point, we had probably

about four other team members.

345

And during that time, all we did was,

heads down, focused on the principles

346

and really went into scaling the

team to ensure that we had all the

347

core members, needed to scale the

348

is what we did took the team from.

349

roughly four, team members to

about 11 where we are today.

350

and a lot of that stem from that

very low period of time where,

351

had a lot of soul searching.

352

Why am I doing this?

353

should I be doing something else?

354

The opportunity cost of obviously

starting a business is extremely high

355

and there's absolutely no guarantees

that you will make it to the other end.

356

but for me, it was more of call it

a promise to my mom or to myself

357

that I have to see this through.

358

And I started some years ago with

the hope of changing this, industry.

359

And just because, we got to call it a

significant curve ball thrown my way.

360

Uh, are we not letting this

necessarily stop us from our mission?

361

And our mission is still the same,

How do we help these payments and

362

acquirers really connect deeply with

their merchants, To provide a better

363

experience, and a better service.

364

as it comes to something as, intimate

as processing someone else's payments.

365

Well, Sebastian, sorry

for the loss of your mom.

366

It happens, and as an entrepreneur, you

really have to see these tough moments as.

367

sort of building blocks, I mean, when it

boils down to why we do the things that

368

we do, There is a thousand other paths

that could be easier, are easier, And we

369

choose the hard route for whatever reason,

and I think it's using moments like that

370

as, either fuel to add to the fire and

continue going when the going gets hard.

371

Good.

372

To switch gears somewhat, what are

your thoughts on mentorship and what

373

role mentoring played in your career?

374

Does any one person come to mind?

375

I have a whole slew of rosters of people

that I respect and admire that, have given

376

me their two cents and obviously put us

in a position to be where we are today.

377

I'll start with my, very initial one.

378

I don't, I'm not even sure that

he's aware, but no old CEO of EVO

379

Payments, Jim Kelly, he, at the

very beginning, I pitched this idea.

380

I was a financial analyst, And all I said

was, hey, I think that we can get ahead

381

of this churn problem by identifying

accounts likely to leave 12 months

382

or months before they actually leave.

383

And he very simply said, listen,

my 40 years in the industry, I've

384

never heard of anything like this.

385

but if you can go ahead and actually build

this, I would say, go ahead and do it.

386

Get out of here start knocking on

doors because you're in Atlanta and

387

every single shop in here that process

Transactions for any given merchant

388

is also experiencing the same problem,

389

So from the very beginning I always

had the you know blessed enough to have

390

a whole loo of rosters of individuals

that I can talk to and really get ideas

391

across to really see if, what is the

path forward, and many times we've been

392

lucky to even include some of those

early advisors or mentors into our team.

393

I'll give you an example.

394

Kevin Lewis, he's our new

CPO or chief product officer.

395

Initially started advising us and

really, reviewing our MVP when it did

396

very little or was very, Started in the

early stages where I like to call it a

397

glorified Excel sheet online, As a product

progressed and evolved, obviously we

398

interact with more and more mentors and

Kevin being one of them ended up coming

399

in as our one of our team members, So

always been lucky enough to have, older

400

or individuals that have been there,

have been in the space for a lot longer,

401

Really helping us, not only understand

sort of where the puck is going,

402

But really, using that information

to derive new products and services

403

that we could cater or use for,

to bring value to our customers.

404

Good.

405

starting out as an entrepreneur can

be a lonely and numbing existence.

406

You need positive and like minded

community of people around you.

407

And Sebastian, I know you're a

strong advocate of networking.

408

How important a role networking

played in your personal development

409

and in the growth of Arcum?

410

I'd say it's everything, I mean networking

is how do you find your first clients?

411

How do you find your first investors?

412

How do you find your first partners,

and for that as a founder, you

413

need to be having conversations,

414

Going to different trade shows.

415

I always kind of jokingly say that, I was

going to trade shows when this was just an

416

idea, And my networking for me was talking

to people like you, Desmond, and saying,

417

Hey, Desmond, you're a First Data, right?

418

how big of a problem is attrition

in your line of business?

419

And whether you're an agent, whether

you're an ISO, whether you're full

420

blown processor, I was pretty shameless

to ensure that I would ask the right

421

questions to determine if this was a

product or company worth building, so

422

before we wrote a single line of code,

I was tout that I must have spoken

423

to thousands of individuals through

these, trade shows to really pinpoint

424

not only a, how much of a problem is

attrition in your day to day business,

425

But also what would the

ideal solution look like?

426

in order to actually solve this problem,

Because you can imagine, attrition has

427

been around the industry for, God, since

the first merchant was on board, right?

428

Absolutely.

429

And it really hasn't changed.

430

Although we've seen solutions that

tout that, hey, we can help you reduce

431

attrition or increase retention, there

really hasn't been anything that has

432

been productized and allows to, The

acquire is to essentially get ahead of

433

those accounts that, if nothing is done,

we'll end up churning down in the future.

434

so I say that we have, I'm not

going to say crack the code,

435

Because I would say it's

a very complex problem.

436

but we have surely done our part in

helping our clients, mitigate some of

437

the losses that would stem from attrition

as a result of being able to get ahead

438

of the problem before it's too late.

439

Now, and, still on the topic

of networking, what advice or

440

encouragement would you give to

new FinTech startup founders?

441

Get out there, be vulnerable, be

authentic, be yourself, I think

442

that people can see through whenever

you're sort of pop this facade, right?

443

Or call it a mask.

444

and sometimes to build deep

relationships with people, you gotta

445

be vulnerable, And I would say that's

probably one of my key takeaways,

446

whenever I go to any one of these.

447

trade shows or networking

events is just be myself.

448

And people can see through that, And that

sometimes may bring some people that don't

449

like you, others that would love you,

And you have to be yourself in order to

450

find that tribe and group of people, That

see the world, whether it's through your

451

lenses or very similar lenses, right?

452

That you can actually Go ahead and

build long lasting relationships with

453

so get out there over the years, CEOs

and business leaders have shared their

454

thoughts on the phrase work life balance.

455

What does that mean to you and how

would you phrase it differently?

456

work life balance, entrepreneur.

457

Yeah.

458

I don't know if there's any, if there's

a separation between work and life,

459

um, but I'll say this, I do have a

very strict regimen in the mornings,

460

Mornings are for me wake up about five a.

461

m.

462

to go into the gym, workout, hit the steam

room, meditate, stretch, do my thing,

463

and for that whole morning, call it 5 a.

464

m.

465

to 8 a.

466

m.

467

It's my time, I could have emails

coming in, phone calls coming in, But

468

it's very rare that something is going

to happen in the business that needs

469

my attention right then and there, So

for me, work life is really, ensuring

470

that the mornings I set myself up to

success, no matter how hard might be.

471

And give you a prime wintertime, I

picked up c for me it was getting

472

30 40 degree cold there for three

minutes a the hard stuff at the beg

473

To no matter what the day brought

later on, Be able to overcome that.

474

Now that we manage a team of, call

it 11 folks, it's very important

475

that you are at your best, even

when you're having a terrible day.

476

follow that with, I also have a fiance

that I have to spend some time with,

477

And I ensure that when I get home.

478

that first hour when I get back

from the office, call it, 6 to 7 p.

479

m.

480

It's spending with her and being

present, And once seven o'clock

481

comes around, it's get back to the

business, So it's never really stops.

482

sort of circumventing or the thought

of the business never leaves your mind,

483

But it's really the ability to

compartmentalize during these moments

484

that you know are important, for the

long term, success of your business.

485

The business as well as your own sanity,

That's Discipline extraordinaire.

486

My hat's off to you.

487

Thank you.

488

let's address the elephant in the room.

489

AI machine learning.

490

AI is the hottest areas

of innovation right now.

491

Lay out for us from your perspective,

the realm of possibilities.

492

Where do you see opportunities,

problems to solve within your vertical

493

and perhaps beyond by leveraging AI?

494

All right.

495

Um, obviously payments and A.

496

I have been touting a dance

for the last call it 10 years,

497

Specifically what the on the fraud

side, If you think about it, most

498

fraud companies out there have built M.

499

L.

500

Models right to combat fraudulent

transactions as they're coming

501

in, and that has been sort of

the main use case we have seen

502

within payments, and the use of A.

503

I.

504

I think once we came in, there was a,

obviously we opened the door to another

505

use case, and that is customer engagement.

506

and merchant and how to mitigate merchant

attrition in a space where attrition

507

rates can go north of 25, 30 percent many

times, As we look forward to the future

508

of what is possible, it's a lot of it.

509

It's on the engagement side that we're

looking at, Where imagine a customer

510

success manager, retention manager.

511

Or for that matter, an account executive,

Can go in there, see their portfolio.

512

Who are their fastest growing accounts?

513

Who has doubled volume year over

year, Or who has been crushing in the

514

last three months and been able with

just one click, send out an email

515

congratulating that merchant, letting

them know that, Hey, we're here for

516

you in this exciting times of growth,

517

Something that it took an individual

before time to see who that account, who

518

their fastest growing merchants might

be, what message do they have to send

519

out to that account, and what is the tone

to be able to engage with that merchant,

520

It can all be done simultaneously

in a very short amount of time,

521

So I'd say from, we're in an industry

where, we're dealing with merchants

522

and many times thousands of merchants.

523

It becomes very difficult.

524

Difficult, To provide that white glove

approach to everyone in the portfolio.

525

So what tends to happen is what

happens in most industries,

526

We focused on the top 10 percent of

accounts that are making us the bulk

527

of the revenue, And everyone else gets

this base level of engagement that

528

it's very subpar to what it should

be, so I think as we look forward into

529

the future, this ability to really

engage with merchants, in our industry

530

specifically, it's going to increase or

be 10 times easier than it currently is,

531

Which I would say set that

standard for service, that it's

532

currently not there, right?

533

If you talk to merchants, what

is one of the biggest challenges

534

that they have to deal with?

535

Whether they're talking to a First

Data or an ISO, it's that level of

536

service that sometimes get lost because

as the portfolio grows over time,

537

It's very difficult to dedicate that

extra one on one or white glove.

538

Approach, to servicing clients, So I

hope that, um, ourselves have a hand, a

539

landing hand when it comes to improving

this baseline level of service that

540

we see across the industry, because

that really does determine whether an

541

account is going to be satisfied with

their service provider or not, Now, what

542

do you see as the greatest challenge

facing payment fintech space right now?

543

Hmm, there's a whole slew of things

that I can comment here, but I'd say

544

competition from outsiders Specifically

individuals that are approaching

545

the problem where they call it not a

payments lens, but rather a tech lens,

546

So if you look at Square, this

was started by Dorsey who?

547

for the most part had very little

to none payments experience,

548

Identified a problem, decided to

build a solution and essentially,

549

created or enabled a whole lot of

merchants that weren't participating

550

or weren't accepting credit cards,

551

To be able to accept payments relatively

easy, They changed the way risk and

552

underwriting was done for that set of

accounts, And I'd say that Toast has

553

just done the same for the restaurant

space, So I think the biggest challenge

554

for the payments industry is if you

think about it, it's been ran or has

555

been operated, by large legacy players,

556

For the most part.

557

and a lot of the independent sales

organizations that operate with it have

558

this sort of sales DNA, embedded as part

of their organizations, So I would say

559

one of the challenges will be how do you

marry, some of tech, some Of this sales

560

DNA and payments knowledge with more

technology, to build a better Offering

561

that serves the merchants better at the

end of the day, what I like to think about

562

sometimes is imagine all the merchants

that could benefit From proactive

563

engagement from their acquirers, right?

564

If you're growing really fast and

you need access to working capital,

565

And a lot of this is why you have to

go outside of your way to prevail,

566

to prepare some balance sheet income

statements, to go talk to your bank,

567

This is something that A function that

your payments processor can see your

568

transactional history and determine how

much you're growing and see that, Hey,

569

Desmond, you're growing by double digits.

570

Here's some work in capital.

571

Verity really cheap, and it's just

one click to upset without having

572

to go through your regular financial

institution, which is always been, the

573

way something like this would go about.

574

so I'd say.

575

Proactive engagement can mean a lot

of things, and here specifically, it's

576

solving merchant issues before it's

too late and getting ahead of that,

577

by leveraging technology, Got you.

578

What are some of Arcum's growth

579

this is the year that we're looking

to get into market and really start

580

expanding our footprint in the industry.

581

I would say for the last couple of

years, there was a lot of R and D.

582

first R and D about how do

we build these churn models?

583

Second piece was how do we

build a software solution?

584

where our clients can leverage some

of these predictive analytics models,

585

24, it's really all about expansion

and getting more and more into

586

different facets of the industry.

587

So right now we mainly work with isos.

588

we want 24.

589

It's all about expanding that to,

ensure that we're working with, ISP

590

providers, payments facilitator.

591

And other individuals that play

within the ecosystem, but it may not

592

necessarily be ISOs for that matter.

593

what are you most excited

about Arcum's future?

594

Desmond, we just got, like I said, we

brought in some rock stars in the last

595

couple of months as part of our team,

for the vast majority amount of time,

596

we've been operating my myself, my co

founder, a couple of engineers, this was

597

the time, a couple of months, the first

time that we really have focused a lot

598

of team, in really just learning and

seeing all the different, heuristics or

599

perspectives that these individuals are

bringing, and how their insights or their

600

perspectives almost changed the vision.

601

Of what we believe Arcum should be

and a lot of that stems from, some

602

individuals come from payments.

603

Others don't come from payments, And

it is in that diversity of thought

604

that really has me excited about the

possibilities of what we can do together,

605

We started as a retention or An

attrition mitigation solution right

606

quickly expanded to more of a bi

solution within the payment space.

607

And now we're all about, how do we

leverage our analytics to solve other

608

problems within the vertical, And also for

bringing additional value to our clients.

609

looking back at the last 12 months,

610

as I mentioned, 23 was probably

the hardest, but both from a

611

personal business, et cetera.

612

I mentioned earlier that I had lost my

mother during the summer and my co founder

613

lost his grandmother shortly before.

614

so from a personal perspective,

it was probably one of the

615

toughest years for the two of us.

616

and really.

617

If I was to sum up what that year

entailed was in one word, that would

618

be resilience, Tough moments will

come, And you have to decide what

619

do you do with those tough moments?

620

Do you go curl up in a ball and

say why me or use whatever call it?

621

pain or suffering and use that to fuel

you to new heights, And it requires

622

an element of great in resilience in

order to actually be able to do that.

623

And I'd say that, from, from myself

to my co founder, that's where we

624

really dug deep and figured, why

are we doing what we're doing,

625

When there is a million other things

that we could be doing with our time, why

626

focused all this time and energy, building

this, and the answer always came Forward

627

to it has to be done, If we're not doing

it, someone else will do it, hopefully,

628

But this is an industry that for the most

part you have to understand that merchants

629

always categorize payments processing as

one of those necessary evils that that

630

they need in order to run a business,

631

If we can change the paradigm on

Payments processors being a necessary

632

evil to hey, I got some great payments

partnerships, I think that we have

633

would have done a good job in changing

how the perception of our industry

634

seen in the lenses of the end user in

this case being or the end client being

635

that the merchant or business, right?

636

Well done.

637

We'll be right back.

638

The lightning round bridges to

excellence inspired leadership

639

in payments and fintech.

640

Okay, Sebastian.

641

Quick questions, quick responses.

642

The Lightning Round.

643

What one word would you use to describe

your career path, journey, so far?

644

Resilience.

645

I would say that would be the main keyword

that highlights both my career as well

646

as personal journey as I build Arcum.

647

What is the one thing you

attribute to your career success

648

to the level it is today?

649

Ah, the people I've surrounded

myself with, whether it's mentors,

650

friends, or advisors, been really

lucky, to find myself with a tribe of

651

individuals that not only believe in

me, but also believe in the mission

652

and what we're building here at Arcum.

653

What one book would you recommend

to our listeners, and why?

654

Ayn Rand The Fountainhead,

probably what I consider my Bible.

655

I've probably read that book, two to three

times as, times gets up And it's really

656

the story about, people go against the

current, When you're building a business

657

or you're an entrepreneur, in many ways,

you find yourself outside the city wall,

658

And outside the city wall, things

are hard and there is no rules,

659

there's no laws, And you have

to find a way to figure it out.

660

And I think Ayn Rand does a really

great job in the Found Head to give

661

you an idea of what can that look like.

662

You stick to your guns,

Good success for you means.

663

Success for me means being able to

create an impact and whether it's in

664

my industry, my life, the life of those

around me, we all come here for a purpose.

665

We don't know what that purpose is and

it is up to us to find that purpose.

666

And to me is make sure that, I

can bring value to not only are my

667

clients, but Customers, partners and

so forth, but really bring something

668

to life that wasn't previously there.

669

that makes the lives of others 20 and

30 times easier than what it is today.

670

What's the best advice you ever received?

671

Don't give up.

672

Stay with it.

673

Yeah.

674

Yeah.

675

It's.

676

It's hard, and as people always

these cliches get thrown out

677

there, Rome wasn't built in a day.

678

And sometimes the founder, it's very

difficult to see if, white breaks reached

679

a 2 billion valuation in just, 18 months.

680

You're like, crap, how, if I'm not getting

or building at that speed, am I failing?

681

And sometimes you have to learn

that everyone's journey is different

682

and be patient with your own

journey and stick to your guns and.

683

What has you fired up right now?

684

What has me fired up?

685

I'd say the opportunity for the future,

this is, I think that for the most

686

part we were pitching AI solutions

in a time where nobody really cared

687

about AI, All of a sudden, even my own

grandmother is asking me about AI, So

688

once it has reached that level, I'd

say that the market has picked up.

689

Or come, come at the intersection of where

our industry is in the market, to be able

690

to offer and have also be, individuals

to be receptive about our message,

691

And I think that's what has me the

most exciting that out of all the years

692

that we've been building Arcum, right?

693

This is the first year that we feel

some market pull and really a lot

694

of interest to get to know a little

bit more about us and our solution.

695

And I think it's specifically

just because of that wave of

696

AI coming into every industry.

697

Everyone is trying to figure

out what is the use case, within

698

their particular business,

699

Mhm.

700

Sebastian, it's been great

having you on the show.

701

Is there anything you want to

add or we didn't mention that's

702

important for you to talk about?

703

no, just I'm very, Very open,

always looking to connect with other

704

individuals, whether it's building

in payments or adjacent industries.

705

so definitely feel free

to connect at any point.

706

LinkedIn, mostly active on, but

other than that, always looking for

707

a good payments conversation to have.

708

Okay, so that's Sebastian.

709

B-U-I-L-E-S.

710

Les Buis.

711

at Arcum dot ai again,

Sebastian, thank you.

712

Thank you, Desmond.

713

It's been a pleasure.

714

It, and to our listeners as

always, thank you for your time.

715

And never forget, the more you expect

from yourself, the more you excel.

716

You've been listening to Bridges

to Excellence podcast, inspired

717

leadership and payments and fintech.

718

Be sure to join us next time for more

conversations with another of your

719

colleagues in payments and fintech.

720

Insightful conversations in their

journey to excellence for transcripts

721

and other materials covered on the show.

722

Visit us at DesmondNicholson.

723

com.