Mike Townsend: Thanks for tuning intoanother episode of Around The Coin. Today's guest John Lunn the founder CEO ofGr4vy .Gr4vy is headquartered in California. About 50 employees. They've raised27 and a half million dollars as a cloud payment orchestration platform. John.Previous to Gr4vy joined PayPal in 2006, he was employee number four in the UK,which is now well over 2000 employees.

Mike Townsend: He later helped buildout PayPal ventures, raising $350 million and watching thousands of pitch decksand founders all in payments. John is one of the most knowledgeable people whenit comes to the global payments market. We chatted about how the differentcountries and markets. What's going on behind the scenes and what Gr4vy's plansare for the future.

Mike Townsend: At the end, we touchedon a little sci-fi and macro and crypto. So hope you enjoy as much as I did.Here is John Lunn.

Mike Townsend: John. Thanks so muchfor hopping on, man. I'm really excited to chat with you. So maybe we'll justkick it off with a little bit of your background. One thing that stuck out tome, I was really excited to chat with you about is your experience at PayPal,both being the fourth employee in the UK office now over 2000 and then runningthe PayPal ventures.

Mike Townsend: I think you did thatfor about four or five years. Prior to starting Gr4vy. What was the, what werethe what was the escalation process like from four to 2000? And then how did,what, how did you get into PayPal ventures? Like why was that a compelling,strategic decision for the company?  

John Lunn: Yeah. So look, Istarted before before I joined PayPal, I was like, I joined a company calledsober source back in 1997, which she like the first internet payment companyI'd say.

John Lunn: So I was kind of rightat the. The, the edge of the sea there, trying to work out how the hell we aregonna all take payments online. And I think that experience from CyberSourceand then the, the startup I did off that past mark kind of rolled into PayPal.So I, I ended up a PayPal, as you know, they're basically trying to break intomarkets outside north America.

John Lunn: So they, they neededsomeone who got how the hell payments worked and the technology had it. Andthey, you know, the other three were commercial and I was the technical person.So. And of brought me in to make it real and you know, signed up the firstclass customer we ever had outside eBay and, and took it from then.

John Lunn: So it was I madetotally different when I joined as a, as I said, there was like a pretty smallus team and a tiny European international team. And then as we as we grew, bythe time we left, I think it was like 15,000 people. So it was a totallydifferent type of company. And it's. Some things are great in big companiesand, but definitely speed is not you see speed, exponentially changing, goingopposite as you grow just decisions, get harder.

John Lunn: And, and things just,just get different. And I think I quickly realized I preferred the smaller,more nimble operation.  

Mike Townsend: Did, did they quicklymove to international expansion? Like how, how big were they in the states whenthey, before they moved out to Europe?  

Mike Townsend: I  

John Lunn: dunno how many peoplethere were, but we were in like one building in a small office.

John Lunn: So it was, was prettysmall. Yeah, it was pretty it was pretty small in, in total. I think it waskind of a year or so after, after eBay bought the company. So it was still abetter transition going on kind of the, the, the paper math year. It kind ofalready was moving out or had moved out. So it was a very, it was a changingcompany and being part of a big organization like eBay was, was interesting.

John Lunn: I. You know whereweird decisions were made, like putting where we put the UK office was based onon where sort of CEOs lived kind of thing. . So it was just those smalldecisions at the beginning. Make a big difference to how a company and where acompany grows.  

Mike Townsend: Hmm. Is that the sameheadquarters it is now?

John Lunn: Yeah. Yeah. I stayedthat. Yeah. It's one of the biggest employees in the town now, so.  

Mike Townsend: Interesting.Interesting. And are they now the largest peer-to-peer payments provideracross. Europe, Asia, like where where's, what's their general footprint. Now Iknow people refer to them almost ubiquitously when they think of peer to peerpayments.

John Lunn: Yeah. I mean, I, Imean, I dunno the exact numbers have been a couple of years since they left,but I think in Europe for sure in the us, obviously along you have more to itget super big. I think Asia you've obviously got, got China that throwseverything one way in India. They throw things the other way, and those aretraditionally not strong markets for them. So.

Mike Townsend: And then when you ranthe venture department what was the conversation like debating whether or notto do this in the first place? I'm, I'm, I'm always kind of interested in likeyou see Google ventures. I dunno if they were the first, but I think of them asone of the most prominent where it's like bolting a venture arm in the side ofa, for profit business, where typically it's been, you know, I think of likeKliner Andreessen now Sequoia more old school.

Mike Townsend: Like these are justindependent funds. Independent investors raising money, but now it seems morecommon that when companies reach, I don't know, a hundred million adventurefunding, a couple thousand people, they tend to. Bolt on a venture arm. Isthis, is it typically looked at as like R and D for M and a activity?

Mike Townsend: Or is it looked at asa, a revenue line? Like what are the internal parts?  

John Lunn: It, it really depends.So we kind of went through an evolution with, with PayPal ventures, but eventhere's some companies that look at it, so an R and D type thing, othercompanies that look at sort of a, default's how they do innovation when theycan't innovate.

John Lunn: And, and othercompanies look at it as a way to actually generate revenue, et cetera. So Ithink different, different motivations. I know when we started PayPal venturesyou know, myself and Jeremy, we, we went and talked at every corporate VC wecould find in the bay. And and really, I tried to learn from them of what theydid, right.

John Lunn: What they did wrong,how they ended up. And we came out very strongly with a viewer. This was a wayto, to learn about what was going on. It, we, our motivations right at thebeginning were not really financial. Obviously the plan was not to lose money,but the plan was to, to, to use this as a way as really like meeting and, andfinancially participating in with startups that were gonna work with us.

John Lunn: Obviously, you've gota huge user base that, that PayPal has and the marketing teams, etcetera, etcetera. And that's very attractive to, to a startup. They get access to all ofthat you know, potential. And we wanted to participate in the upside of, youknow, as, as a company came to, came to work with PayPal, the upside for them,we wanted to participate in that as well.

John Lunn: And I think we, we hada very clear division between ventures and M and a, we didn't. to give theimpression that if we invested in you, it meant we were gonna buy you at somestage because not, not for the obvious reasons, actually for the opposite. Ifyou are a great company, we invest in you, but there's not a fit with PayPalstrategy that basically could indicate to the market that you're not very good.

John Lunn: And that wouldn't befair on the companies we invested in. So we always had a, a line between us,like an investment and an M and a were not the. PayPal did acquire a couple ofcompanies. Just cuz as, as, as they worked more, the venture investments workedmore and more with, with the PayPal, you know, product teams, they realizedthere was a fit and then acquisitions happened.

John Lunn: But many othercompanies, you know work with PayPal and then then went to be huge like INACcompanies like PLA et cetera. So there are, there are a lot of both sides andyou know, as we evolved, we've got very good at it. And I think by, by. At somestage, the, the returns that we were starting to, to, to generate were actuallyneeded to be mentioned to, to investors as PayPal being a public company.

John Lunn: So it changed a bit.And I think toward, towards the end of my, my my time there, when I decided to,to go off and do Gr4vy, I think motivations were, were, you know, getting alittle bit more financial than they had been at the beginning.

Mike Townsend: Is that part of thereason why you left? Were you feeling bored?

John Lunn: No, I. No. The reasonI left is I, I, I like, I like, I enjoy investing. I still do it now. You know,through couple of funds I LP and advise, but I didn't wanna do it. Full-time Ireally missed the start. I wanted to go back and do a startup and I always hada long-term plan. Like the reason, one of the reasons I joined or started theventures team was I wanted to learn what it felt like send the other side ofthe table, cuz I always knew I wanted to do this.

John Lunn: So I'd raised moneywith other companies. I wanted to raise money for this company, but I wanted todo it even better by learning how VC's operated. So I could, you know, do, do abetter job than I had in the past.  

Mike Townsend: Yeah. It's an unusualtrajectory for folks to start off early in their career in VC and then flippedto start up.

Mike Townsend: Founding. I have afriend who. You know, in hindsight says he did it strategically, who knows whythey just got the job and fell into VC, but he did work in VC for like sevenyears and then started a company that's going well now. And I do think you gaina few major advantages, especially when trying to raise money.

Mike Townsend: One is just theoversight to see what the market trends are to see. What's not only what theopportunities in the market practically are, but what investors. Tend to tendto be excited about, which are too related, but, but distinctly differentthings. And then there's also the actual art of raising money.

Mike Townsend: You know, the networkeffect that you have from knowing enough people, just how you craft emails, howyou build a deck, how you convey the enthusiasm when pitching. And it is like,it's like, you know, it's like being on the is being on the being on the otherside, when you're trying to do a deal, it's like kind of a secret.

John Lunn: It's a hack. Well,yeah, I mean, let's just, I saw thousands of pictures, right? Yeah. So while Iwas there, so I could see what was working, what wasn't working. I always say,you know, I sat on boards, a lot of different companies. So I could, I couldsee what worked from a board perspective and really like, you know pick,picking a VC or being picked with a VC.

John Lunn: It's a two way thing.Right. You're you're taking money from a firm or an in individual, at a firmthat you're gonna be closely associated with for the next five to eight years.So like, it's it's, you know, it's a bit like a marriage and like you're gonnabe seeing this person all the time. You're gonna be going through good timesand bad times together.

John Lunn: So actually pickingthe right DC for you is really important. And now it's saying it became veryclear. I wanted to make sure that people, we could work together with goingforward, whatever, however well, or badly it went. Yeah.  

Mike Townsend: Yeah. This is justyour, your general disposition is something I can tell that you've been throughthis enough times to have the attitude that it's like founder's choice becausemm-hmm, like, I tell me if you disagree, but I.

Mike Townsend: The first thing aninvestor thinks of when they get approached is who where's the prize. Like, canthis person go and raise money without me? Or do they need me because manyfounders you meet will think I need to raise money. I need to get money in the bankaccount. We running outta money, or even get the better side of this will be,we have an opportunity to grow.

Mike Townsend: We need money and wejust gotta talk to enough investors and convince one of 'em. Hopefully thatthey'll give us money. And then the, the experienced founders, like. I gotta goaround and decide who I want to take money from. And mm-hmm and it's, and it'smore, it's a more it's a higher level of self respect and self appreciation onthe founder's behalf, which is, it's not, it's not intuitive because you needmoney to operate.

Mike Townsend: And if you don't getit, you die. And these guys sitting in these, these big, big, you know, tablesat these fancy VC firms have the money. You gotta convince them, but it's like,it's not how it is. You know, they have to deploy that capital, you know, it'slike part of their job to deploy it.

John Lunn: It's a very much. Andyou've gotta view it as a partnership cuz you know, once you've got the money,that's great. But then after that you, you know, picking a VC is actually gonnahelp you be your money is hugely important. Like there are, so it often sayit's like really lonely to be a CEO, cuz it is like who you supposed to talk toright about what's going on.

John Lunn: You can talk to thepeople you work with you, but you're still the boss, right? So you're still theperson who's gotta, you know, show the positivity and, and make thosedecisions. And. You know, I I've, you know, while I was going through theventure stuff, I spoke to loads of CEOs who just wanted someone to talk tomm-hmm really, they really wanted to, like, I have this idea, I have thisproblem.

John Lunn: And like, it's whysome of these summits or conferences where it's just like the, the founders andCEOs are so important because you know, there's so many therapy sessions,frankly, , it's like this happened is this normal. And you get that also from avery good VC and especially a VC. Who's done it before themselves.

John Lunn: So they've been partof a startup or they've been involved with a startup they've, you know, seenthese problems. They've seen what works, what doesn't work. Being able to havethat conversation is really, really valuable.

Mike Townsend: So how many differentconcepts did you iterate through when you were going through kind of the tailend of your experience at PayPal ventures?

Mike Townsend: Did you, what maybebetter way to ask this? What was the process for identifying the businessmodel? Were you writing things down in the board, iterating through customercalls or research, or did you just like lightning strikes and this.  

John Lunn: Yeah, look, I've beendoing payments, as I said before, since 1997. So like, it was for me, thiswhole company was born outta pure frustration.

John Lunn: I just started gettingannoyed with how slowly things were moving. And I, so it was a case of like,what is broken? Like how is this so hard? Why is it so hard for like a merchantor a retailer to go and add a payment type? Why is it taking eight months? Whyis. Some of these new cool bits of payment functionality never get deployed inthe, in the wild.

John Lunn: And, and it's justlike, Fintech's moving at this speed. And the people who need to adopt aremoving at FinTech are probably moving at half the speed and that's, doesn'tmake sense. So that was, that was work first in. I just said, look, okay, I'mgonna go and talk to some people about what's going on here.

John Lunn: How, why is thishappening the way it's happening? Where's the problem, frankly. And, and theproblem. The payments team. And that's what we saw very clearly. , it's not theindividuals. They're lovely. They're fantastic people. It's the fact that everyretailer merchant in the world has a payments team and they have it because youstart and you do an integration to Stripe or something similar.

John Lunn: And six months later,you go and add PayPal, and then you go and add a firm and then you gointernational and 99% of merchants are doing this by basically. Plugging moreand more stuff in and adding people to that team. And it just grows and growsand grows. And I talk to some really large, you know, retailers now, thesemassive teams of 300 engineers working on payments.

John Lunn: And I'm like the crazything here is they're all building the same thing. They're essentially allbuilding a big Rooter as it was kind of viewed then, but really now it's knownas payment orchestra. There roots payments where they need to root them based onthe criteria that their business needs. And, and so I saw this gap.

John Lunn: I'm like, let's justbuild that. Let's build that tool that does that thing. And then let's. it'sbecome a payment process and let's not do any of that. Let's build a tool.Let's give that tool to retailers and allow them to just move quicker. Cuz thatwill be good for pretty much the whole ecosystem, but also everybody needs it.

Mike Townsend: So when you definethis concept of the payments orchestration, what are the boundary conditions?Where are the endpoints? If I'm a team of 200 people, if a payments team of 200people at a company, what are the end points in which the orchestration is. Youlike, do you have the end bank account of the company which money's being depositedin and then is it just all the API end points of all the stripes  

Mike Townsend: brands?

Mike Townsend: The world?  

John Lunn: Yes. Think, think uslike an integration there. So payment orchestration is a, is a broad churchnowadays, right? So lots of people say they do payment orchestration. I thinkyou can sort of, you know, everybody did cloud before, right? Mm-hmm just, justbecome a term. But I think for. We view ourselves as an integration layer and alogic layer that sits above all of the payment companies that you want to workwith.

John Lunn: So we connect to ahundred plus unique payment types around the world and payment companies likethe brain trees and the stripes and the Aons, but also the cool stuff like, sowe, you know, we do some other crypto stuff. We do weird and wonderful walletsaround the world. We do open banking, realtime payment type stuff, et cetera.

John Lunn: So that's out the backand we, what we've done is we give the merchant a tool and that tool allowsthem to, and, and plugs into their checkout if they want to. And basicallyallows that merchant to go and add a new payment type, a product manager or afinance person can go into our no code middleware.

John Lunn: Add a new payment typeclick, go press deploy and it's live. And it updates the front end, the backend, the middleware, it standardized to reports course all the differentpayment types. And it really allows them to experiment them. And this is then,you know, you know, Crypto is a great example. Like I've spoken to hundreds ofmerchants who say, look, I'd love to see what happened if we, you know, allowedBitcoin on our website, but I can't afford eight months of engineering roadmapjust in case like no one uses it or the volume's tiny.

John Lunn: Like I can't afford todo that. With us, literally, they can go in, click a few buttons and be live infive minutes. If it gets adoption. Great. They decide this ain't working threeclicks and it's off again. So it's, it's that it just frees people up to experimentit, frees the ecosystem up to, to try new things and do different things.

John Lunn: And for me, that waslike one of the prime motivations to get this up is. Get things moving, let'sget things moving. And I think, you know, and then many, you know, lots ofpeople have talked about underserved over the years and getting, getting, youknow, people who aren't necessarily got credit, et cetera to be served in theirsort of financial ecosystem.

John Lunn: But it just struck meduring COVID while I was like, dreaming this up, that, you know, I'm at home orstuck in my apartment, ordering stuff online. What would my life be like if Ihadn't got a credit card or I hadn't got a way to buy, like, I would've suckedeven more than it suck. Right. Like I would've had to go out.

John Lunn: I would've had to gostores. I would've had to, you know, deal with the day to day stuff that Icertainly didn't feel safe doing. And, and. , I was lucky enough to have goodcredit rating and all that kind of stuff. And there's a lot of people thatdon't so freeing it up, allowing this animation, allowing people to find indifferent ways is good.

John Lunn: Not only for theecosystem is actually probably good for, for people generally. Yeah.Interesting.  

Mike Townsend: And is it, does ittechnically work where you, the end, you like Gr4vy will be the integrator ofsay Stripe Braintree, all the payment gateways and then the. Customer or themerchant doesn't actually do touch any of those.

Mike Townsend: They just touch youguys. And then you'll like route out payments. All the different.

John Lunn: Yeah. So thetechnically it's exactly how it works. We don't touch the money, so they stillneed a contract with, with their gateways. The money ultimately flows into, intothe gateway and then into the merchant's owned bank account.

John Lunn: So we don't want toget involved in the actual movement of money. Many reasons for that, by havingset up a number of startups before KYC compliance, all of that is a very human,resourceful part of a business and, and not much fun. So by not touching themoney and, and having the merchants negotiate their own contract it's we canmove quicker and we can sign any retailer anywhere in the world.

John Lunn: But, but secondly,like a large enterprise retailer, generally, who we work with. Is gonna get amuch better rate than I am from many PSP or bank they get. So would it betechnically, it's like a widget they're installing into their WordPress webflow,  

Mike Townsend: whatever websiteframework they're using and then your integrating with the payment gateway thatthey choose? Is that it's a little bit more complex than that.

John Lunn: And we're actually yesto say it, but we're actually a cloud company. So we we're not just a, a widgetthat plugs in and a SA we actually spin. Infrastructure for each of ourretailers in a single tenancy mode. So for example, retailer a wants to, tospin up to, to, to use Gr4vy, we'll spin up an instance of Gr4vy for them intheir local environment, in their local wherever they're hosting will spin upGr4vy for them, that single tendency, they're not sharing that with any othermerchant, the data sticks within, you know, their ecosystem.

John Lunn: You know, there's no,no data sharing. Be very specific on how we built this. It can be as redundantor as not redundant as they want it to be. They can load balance, they can doall of that with Gr4vy. So we look a little bit more like a sort of an AWS or aGoogle cloud than we do a payment company in that way.

John Lunn: And that once that'sspun up, the merchant has access to the widgets that they can install on the,on their website. But also it's able to link into their backend systems,whatever they're using for reporting or into the CRM or whatever they want todo there. So it's really is, is designed for the The so mid-size to largeenterprise, who's got more complex systems.

Mike Townsend: Yeah. Yeah. Thosethings you mentioned are certainly not like scaling up cloud instances, CDNlayers. I'd imagine that's really gonna be kind of an optimization layer thatyou're not gonna face unless you're. is it revenue over a hundred million? Likehow do you think of, yeah, about  

John Lunn: 50, 50 million inabove.

John Lunn: I would say that that'skind of why we're kicking. Like my view is if you are, you know, selling cheesein Wisconsin, to people in America, like strips. Great. C's great. Right? Youdon't really need orchestration. I think when you get bigger that's when youstart thinking about redundancy, multiple PSPS, but actually more importantly,it's when you start thinking about international and things just instantly getmore complicated with international, like.

John Lunn: I could probably thinkof a 30 or 40 conversations I had with a large us retailers say, oh, we'regonna launch in Germany. And I'm like, okay, what payment types you saying? Howcredit cards I. You do know that like 5% of Germans own credit cards, right?wow. And it's like a tiny proportion. And so a lot of times a retailer willsay, oh, we're gonna launch international.

John Lunn: And just assumeeverybody pays the same way they don't. They frankly don't like try and get acredit card in France. Your credit limit is tiny cuz that's how French creditcards works. So people pay in different ways in different markets.  

Mike Townsend: Do the marketvariance, is it by region by country? Kind of do, do you see  

John Lunn: like it's pretty muchdown to country?

John Lunn: Like you would'vethought Europe would all be the same. It's not, it really isn't like the UKlooks a lot more like us, except now they have open banking. And then and thenas soon as you get to France, Germany, et cetera, it's very, very different.How people like to pay and what they pay with.

Mike Townsend: What are the factors?Play into, with the different methods that people like to pay with. Like, isit, does it ultimately flow upstream to regulation in some way or culturesomehow? Like why would Germany have such low credit card uses? That'ssurprising.

John Lunn: After after the warsGermany had a very strong aversion to credit cuz of the, the downturn thathappened.

John Lunn: Mm-hmm so, and it'sstill semi cultural in Germany that you, you don't borrow money. So, so it's Ithink a lot of it came from there. A lot of it comes from technology. I mean,they just had better banking systems, right. That, that allow real timemovements. So now people have been paying with their bank account.

John Lunn: And generally eversince I've started in this. And they would prefer do that and use a creditcard. Like they would prefer just do a direct bank transfer and pay for anitem. And it's the same in, in a number of different European countries. Andit's the, and a number of countries that started a bit later, they justdeveloped a local wallet that everybody just uses.

John Lunn: So it just, it'spartly cultural, it's partly evolution. And. , you know, in France there's,there's regulation around how much money you can borrow on a credit card, etcetera. So it's, it's different things in different countries, but when youlook at it, Europe's pretty complex go to Asia and it, it goes through thewindow, right?

John Lunn: Like the hundreds ofwallets, hundreds of banking, payment systems. And it just, it's verycomplicated for a retailer, wants to sell. A product into a, a market they'renot in, they really need to, to be accepting local payment types. Otherwisethat you're restricting who can buy from it.

Mike Townsend: Do you think this isa, a pendulum swing?

Mike Townsend: In other words, do youthink we're, we've moved to this hyper complex multivariate payment methodglobally. Where right now I was looking at some numbers the, the other day onthe number of people per week that are coming online. It's like in themillions. So still there's just an absolutely explosive growth, especially withstar.

Mike Townsend: And people workingfrom home cryptos, obviously like default remote first global first, is thisgonna swing to a point where people across the world kind of say, well, itwould be advantageous for us to move to one, maybe two payment methods and.there's kind of liquidities much stronger. Like there tends to be a globalreserve currency for a reason we're not using mm-hmm a thousand differentcurrencies.

Mike Townsend: International tradetends to happen on U S D crypto seems to present an opportunity where you couldconsolidate payment methods yet it has yet to really take off. Do, do you seethat as happening? Like I can't see it as sustainable when. All of Asia usesthousands of different or hundreds of different payment methods yet we're allin the same internet working for the same companies.

John Lunn: I think things will, Ithink things will consolidate a little bit, but I don't think that much. Andactually, if you look at it, it's increasingly just getting more complicated.So. You know, has better ways to pay appeal, different ways to pay appeal. Youlook at the rise of by now pay later, right? It was nonexistent outside kind ofAustralia and probably some parts of LATAM and suddenly every night there'shundred hundreds of companies doing by now pay later in different ways anddifferent things.

John Lunn: So I think technologyhas just allowed people to experiment a bit more with how they want to dothings. I don't think that's gonna change. I mean, you go to India. You don't,you don't carry card around with you. You carry your cell phone and you scan QAcodes. That's how people pay in India. You go to you go to Scandinavia and youdon't take any cash out.

John Lunn: You're never gonnaneed it. No one even expects cash. Like it's got it's it's things are, have gotto a point where it's just different and different markets and paying locallyand paying internationally might be two different things. And you've gotta remember.we're kind of privileged cuz we get to travel, right?

John Lunn: Lots of people don'tso why would you need a international payment type if you not gonna ever useit? So I think you will still, I mean the card companies are not goinganywhere. Right. And they're gonna innovate and grow and change and do all thestuff they need to do. But you, I mean, at the moment, look, people love tobash the, you know, the credit card companies.

John Lunn: It's like an oldsystem that still works super well, like 99.9, nine, 9% of the time. And youknow, if you. A card in your wallet, you've gotta get chance of paying whereveryou are. But do, when I go and shop online, if there is a Google pay or aPayPal, I will always use that. It's just quicker, simpler and, and, and easierfor me.

Mike Townsend: Do you think are you,it sounds like you're pretty bullish on the continual dominance of visaMasterCard is that...

John Lunn: I dunno, it'sdominance. I mean, you can already see it's drinking, right. Especially arounddebit. I. I don't think it's going anywhere. I just think there will bealternatives. So, yeah.

Mike Townsend: Do you seealternatives being decentralized as the primary competitive threat?  

John Lunn: Not primary. I thinkprobably the primary competitive threat at a moment is, is real time paymentsand open banking. I think like the ability to move money instantly for yourbank account to someone you're buying stuff from is.

John Lunn: pretty disruptive. Imean, it's been happening in some places in Europe for a while. I've seen likein UK, it's starting to get really good adoption. Because they've, franklythey've cracked the, the user experience a lot better than it was. It was justextremely painful before. And now it's down to literally fingerprint on yourphone and off you go, you know, that, that kind of checkout is great and it'spretty secure and it's a lot cheaper.

John Lunn: So you're starting tosee retailers realize. Gonna work well for them can and if they do it right, oris the biggest conversation I have with a lot of our retailers, like, yes,you're going to save money on perhaps a credit card processing fee, but don'tjust keep it all. Cuz you also have to take part in trying to persuade peopleto, to do this.

John Lunn: Like what's in, what'sin it for the consumer. And so you start to introduce things for the consumer,like, you know, pay with this payment method and. Give you, you know, gift cardor give you loyalty points or something like that, then you can start to influenceconsumer behavior. And I think that will, that will be very disruptive of itto, to credit cards generally.  

Mike Townsend: Have you researchedmuch or have any opinions on the trajectory of the credit bureaus?

Mike Townsend: The structure in the UnitedStates being kind of an oligopoly of three companies managed all thecentralized super important data. And they were hacked, not that long ago, youknow, hundreds of millions, I think social security numbers leads on the darkweb. I don't know much about how it operates in other countries, but itcertainly seems unsustainable, you know, to continue to do it the way itcurrently exists.

Mike Townsend: Maybe it's not aproblem in other places if they don't have a desire for credit, but it seemslike one of the most broken parts and, and under discussed parts andpayment.  

John Lunn: It's really broken andit's broken. Look, I, I immigrated into the us. Right. And I, I came from theUK where, you know, I was doing okay.

John Lunn: And I got out here andI, I went to open a bank account and then like, I was hard work. And then onceI'd found someone who'd open a bank account, I tried to get a credit card. Andmy wife spent the next six months laughing at me because the credit card theygave me was the same one she got when she was 16, she's a us citizen.

John Lunn: And she's like, I hada, I had to give them like $2,000 to get a thousand dollars credit limit. AndI'm like, how does that make sense? But, but it, and I'm like, why can't youjust talk to like the people in the UK? Like I'm, I'm in my forties, like I'vegot money like this. This doesn't make any sense. And they just, they don'ttalk to each other, like the us credit agencies, don't talk to the UK creditagencies.

John Lunn: You don't talk to theIndian credit agencies. So the whole model is very insular and doesn't reallytake into account the global mobility of people these days since the first sideof it. And then the second size of it, I think it's just used for way too muchstuff. Yeah. Like I think that, I mean, a good example from the insuranceworld.

John Lunn: Right? So if you livein. A poorer area. You're gonna have a higher insurance premium, right? Purelybased for car insurance, purely based on your credit rating. But it's been welldocumented that people who have less money look after their cars, much betterthan people who have more money. So it makes no sense cuz everybody's like, oh,credit rating.

John Lunn: We'll just use that.We use credit rating to work out how much your insurance is gonna be. We usecredit rating to work out all of this stuff and it's just overused. And I thinkit's overused and it's used badly and it doesn't take into. Like how peoplelive their lives now, where they live their lives and it definitely leads anoverhaul and I think there's some opportunities in that sense.  

Mike Townsend: Do you think thereason why it's overused is that to me, two things stand out. One would be thatregulatory reasons, prevent companies from gathering data that they would beable to use to make more intelligent decisions on pricing. So you have amassive like pricing like misfire, you know, it's just like off from where itshould be.

Mike Townsend: And then the otherthing would be the. ability for people to contribute to that, to add more datalike data pipelines, aren't either aren't built out or, you know, I tend tothink wherever there's opportunity. There's probably people working on it. Ifnot, there's going to be tomorrow. Otherwise there's some regulatory or somefundamental structural reason why it doesn't exist.

John Lunn: There's lot. There'slots of people working on that. I mean, there are many people I. For a period.You know, before, before everything that happened there were people looking atsocial data as a, a possibility to use in trying to work people out. Obviouslythat didn't go so well, but but there, there are other, I mean, there'scompanies like, you know, plaid and, and others in that space who are, youknow, using banking data to actually start to identify things.

John Lunn: There, there are othercompanies looking at algorithms on you know, how funny you. Who's paying you,where are your jobs? All that kind of stuff. So I think there's more real timedata available and, and being able to. To build that. I mean, the, theadvantage of the cred agents who've got is everybody's reporting to them.

John Lunn: They're getting all ofthis data in and they have, you know, a large quantity of data, however, goodor bad you think it is. It's a lot of data. And when you have a lot of data,you can make better choices. So I think it's already starting to happen. You'restarting to see some pretty cool startups looking at their space and.

John Lunn: There is other dataout there that we can use and maybe make better decisions around what we'redoing and how we're doing it.  

Mike Townsend: Do you see othercountries set up their credit system structurally different than, than the uswhere. Are they all about the same?

John Lunn: Most, most have donethe same thing. Most have really done this sort scoring mechanism.

John Lunn: And I don't haveeveryone, every country I've worked on and thinks has pretty much thesame.  

Mike Townsend: And they're all,they're not the same, like Equifax as they are. They are. Huh. Interesting.Wow.  

John Lunn: Many.  

Mike Townsend: Yeah, many of themman, it seems like that that whole system seems so off balance, you know, likeit's, it, it is screaming for a better way to do it.

Mike Townsend: I. Does it have to becentralized?  

John Lunn: Like, I mean, well,that's the thing, that's some of the, some of the coolest startup are startingto say, like, maybe it's about self self-reporting. Yeah. Maybe it's about likeyou, maybe you should own your own data. Right? Mm-hmm so you should be the onewho gives access to my employment records, I should be the one, like saying,you know, say to my employer, you can give records to this, this company orimport it, and then maybe it should sit on the blockchain.

John Lunn: So if it sits on theblockchain, maybe it sits in there where I as an individual own the keys. So ifsomeone wants to rate me for an investment, I will give them like, Temporarykey to access the data on my blockchain. For a period of time for this singlepurpose, you know, put in a smart contract, all the rest of it.

John Lunn: So you can go and seeit. But ultimately my data sits in, in the blockchain and is secured andupdated and managed by me as an individual. And I think a lot of people feelfrom a per a privacy perspective, that might be the way forward. So far not, nottaken off. Yeah, but you. Logically makes sense.

Mike Townsend: In 10 years from now,what do you think the, the largest liquidity global reserve currency will?

John Lunn: Ah, I don't, I don'treally know. I think these things, some interesting stable coins coming outfrom government and I think we'll probably be one of those. Yeah. I don't knowthe us one or someone. Else's one, they got a bit of catch up to play, butyou're starting to see the digital Euro.

John Lunn: Obviously China'smaking big moves of their currencies, their stable coin. So I think, yeah, Ithink we will end up with a stable. Probably sovereign stable coin for a  

Mike Townsend: stable coin. So yeah,sovereign stable coin. How, how much of your attention now is spent on crypto?You mentioned you talked to some merchants who are interested in, in adoptingit.

Mike Townsend: Is it still on thefringe practically speaking from a business perspective or is it like startingto become,  

John Lunn: we like, we, like, Imean, we've integrated into a few different providers to, to provide, you know,the merchant can switch it on, so, and try it and really, and the moment. Yousee it? I mean, look, I view Bitcoin like gold.

John Lunn: I don't think that'sanything revolutionary. I don't spend my Bitcoin. I sit on it and pray. It'sgonna go back up again. That's do with it, but I don't, I don't have anyinterest in using Bitcoin to buy anything. Generally for me, it's a, it's asavings investment and okay. A lot of people view it like that.

John Lunn: Is there anothercurrency that, or maybe it sound like lightning, that, that, that would bemore. Readily used day to day. I think the friction's just a bit high at themoment of loading up your wallet and even friction's even higher in takingmoney out of your wallet. So I think at the moment it doesn't really make sensewith the way that the, the cryptocurrencies are set up to be a day to daybuying.

John Lunn: I wouldn't buy my milkwith cryptocurrency right now. Right. But I think it's close and I think itwill get to a point where it's closer and it's, it's about user. It's also abit too complicated for the average date. Like my grandmother, she wouldn't useit. So it just, there need, there needs, there's still a bit of a gap to get itinto it.

John Lunn: Generally. This iseasy for everybody to use as easy to use as cash, or as, as easy to use asmaybe a debit card, then I think it starts to get a bit more.  

Mike Townsend: Yeah. Yeah. I rememberwhen my grandmother would not use the internet, she would just only go inperson to the banks, which I think is the only reason the banks even exist inperson anymore.

Mike Townsend: What area, whatverticals are you seeing the most growth from within the merchant segments?Like what, what is from behind the scenes what's, what's working? What arepeople, what are the general trends you're seeing.

John Lunn: For, for what area?

Mike Townsend: For, for growth inmerchants? Like, is there certain categories or industries or.

Mike Townsend: I think of likeeCommerce, for instance, massively grew during their early part of thepandemic. But I think even now Shopify CEO has publicly admitted a mistake inhiring too many people and then having to lay 'em off because the retractionback to in-person transactions was higher than they expected.

Mike Townsend: So I'd almost say,yeah, that's kind of an interesting trend. I there seem. Yeah.

John Lunn: It's always, it'salways done that though. So it's always like, if you look at eCommerce, it'salways gone through bumps. Like everybody likes to do the up and right. Slideon eCommerce, but it's always done like up and up and down stuff.

John Lunn: And I think, look ateverybody was stuck at home. People are now going back to the stores in somecase, but I think a lot, what COVID has done is a whole generation that was.Adverse to it. So you talked about your grandmother earlier, sort of anothergeneration that hadn't tried, internet shopping, didn't see any reason to useit.

John Lunn: And during COVID hadto and realized it wasn't that bad. So I, you know, I, I have sort of olderrelatives who now they shop online. They never shopped online before COVID andthey're, they're fine with it. They're actually quite happy with it. So I thinkthe generally. the, the people who are shopping in line has gone up.

John Lunn: I think there'smixtures of people not spending as much money now. Perhaps some people are liketo go back. It's more. People were buying stuff at home because they hadnowhere else to spend their money during COVID. And now you restaurants areback, open cinemas are back, open gigs are happening again, like you, some ofyour capital that you were just buying stuff at your house at the time.

John Lunn: You're now puttingback to things you did before. So I, I. I think overall it's still grown andit's still grown. It'll still keep on growing. I think you see Europe and northAmerica contracting a little bit on eCommerce, but you look at Latin and Asia.It's still growing very, very quickly. So I, I am still bullish.

John Lunn: Like that's wherewe're going. We're still keep on going that way. We all keep on going that way.And. you just walk down like a, you know, your local high street or shoppingarea. Now you'll still still see loads of, of stores with the windows closedup, et cetera. And I don't think they're coming back. I think, I think these,they're not going to be places you shop.

John Lunn: They're gonna be muchmore entertainment, less.  

Mike Townsend: Yeah. Any particularparts of the world or countries that you feel are. On the rise or maybeunderappreciated from an economic development perspective. Obviously China isa, is a major one that people talk about undisputed growth there, but are therecertain parts of you know, it seems like Asia Africa, south America, the areasthat we're trying to figure out or largely see how they enter the world, seeneconomic.

John Lunn: Yeah, I mean, I likethe two that always get ignored a career South Korea. Like everybody alwaysignores South Korea. It's a huge market. And. I dunno if you can. I've beenthere. Yeah. My wife's Korean. Yeah. You connect, you connect to the internet.You're like, holy crap. That's what the Internet's was to feel like it's likeincredibly fast, very efficient.

John Lunn: Like it's superconnected and it's a great market. We always gets ignored. And then and thenlike Africa is one of those, like most people don't realize there's 80 millionpeople in Nigeria. It is a huge, huge country, a very well educated, gooduniversities, very technical. You know, great engineers with technical skillsand it's a huge, huge market where it again gets totally ignored.

John Lunn: And and I think you'llstart to see some of. I mean already look at FinTech in Nigeria is on fire.Yeah. Usually. And the break of it there, I think. And then, and black. Yeah,of course.  

Mike Townsend: I, I, the only reasonI know this is my last business had, we would work with people in Nigeria.Nigeria's 210 million people or 200, I think by the end of your yeah.

Mike Townsend: Which is to put itperspective. The United States is what, three 30. So they. Pretty close to twothirds, the size of the us, which is insane. And I think it's just a matter oforganization getting basic infrastructure to a point where average person cancontribute to society or gain access to the internet in a peaceful way wherethey can learn and earn it's.

Mike Townsend: Yeah, it's a pretty, Ijust can't think it feels like a time in history where if you take the numberof people coming online, the technological services to work together online, ARVR, AI, crypto psychedelics, sprinkle it all together. And it's like, it justfeels like a really special time. Obviously I'm biased.

Mike Townsend: Right? We're allbiased. Cause we're all just alive now. And haven't been before, but I don'tknow. I just repeatedly get this sense that it's just, just. I mean wild tiedto life.  

John Lunn: I remember you justlook at the growth of it and it's funny, like you missed the growth oftechnology. Like I was talking to my grandmother before she died and she'slike, this is incredible.

John Lunn: Like, you know, shewas a physicist, but she was brought up in a, in a house in the UK. With eightbrothers and sisters with no electricity in an outdoor toilet. And you thinklike where, where we, where she was before she died, she was like on theinternet, she was doing all this stuff and, and is still doing that.

John Lunn: Like it's just growingand growing and changing, changing. It's funny payments were one of the thingsthat never changed, right. Payments like pretty much until the credit cardhadn't changed for hundreds of. And then the credit card was about it. And thensuddenly in the last 20 years, it is gone and exponential, like just how peoplepay for stuff.

John Lunn: Went through the roofand playing catch up, I think really with the rest of technology. Yeah.  

Mike Townsend: Do you think that wassome overlook or some, it would seem that early on in the internet days, likePayPal obviously is the big story, but was, were payments overlooked for somefundamental reason or do you think...?  

John Lunn: I dunno, I'm, I'mpretty old.

John Lunn: I remember like havinga, you know, my internet through a, you know, had to lift the dialer off thephone and plug it into the modem. And you, like, you paid through your, youknow, your telephone bill. Yeah. You that's how you paid items. So you neverbought anything expensive because it was like, you're gonna get a telephonebill at none.

John Lunn: So, yeah, absolutely.Like when I, when I started in 1997, , you know, people were trying to sellstuff online and they had no real way to do it. It was horrible. And we kind ofhacked the credit card system and made it work for the internet and all therest of it. And that's where it started. Right. We. You knew this the only wayit was gonna be successful, people could pay for stuff.

John Lunn: That was the only waythe internet was. It was great as a source of information and all the, thedream around that. But if this was gonna be standard and everybody was gonnahave the internet at home, you needed to be able to accept money. And we sawthat,  

Mike Townsend: Alright. If youweren't working in payments and you had all the money that you could ever want,what would you, what would you spend your time doing?

John Lunn: Yeah, so I, funnyenough, I am a, I have a degree in Marine biology and I have a love of the seaand everything to do with that. So I'd probably go and do something like backback, like it really depresses me how much plastic we're pumping into the oceanand the state of the reefs and all the rest of it.

John Lunn: So, you know, what, ifI had as much money as I needed, I'd go in at work on that nonprofit, try andtry. Help help the seed get a bit better. Nice.

Mike Townsend: Hey, you're a youngguy. Hope Gr4vy pays off and you go do that. any, any particular people, books,podcasts, YouTube channels that stand out as places you've been inspired orhave learned from over the years?

John Lunn: I read a hell of a lotof sci-fi that drives my wife, Matt.

John Lunn: Like, why can't youjust read something else? What do you read? What do you like? But I. Oh, Ithere's a whole group of sort of Manchester based UK science fiction writers,people like Neil Stevenson and, you know, ENM banks, et cetera, that, that kindof started that. So there's kind of space operas. I would call them.

John Lunn: So I think the expand,but I, I just, I read those books and nonstop and I'm always looking for newones. I kind of, I've always been very heavily influenced by sci-fi and theideas and that, and I think that's why I ended up in technology, frankly,because. I was trying to work towards a world where, you know, we had flyingcars and all that kind of stuff, but that really came from, from reading.

John Lunn: Sci-fi I watch itnonstop when my wife's not sitting next to me and wants to watch somethingelse. I'll be watching. Sci-fi I'll be reading sci-fi it's probably anaddiction now. what'd you think of? What'd you think of doing I oh yeah. It'sclassic one of my favorite books. So yeah, I've read it probably eight or ninetimes.

John Lunn: Yeah. Whole series. Iactually liked the original movie. So there you go's eight or nine times.  

Mike Townsend: God, it's a, it's afat book. I people who haven't seen it person. Yeah. It's like, I don'tknow  

John Lunn: How many pages. Andit's the, it's the first of many as well, so

Mike Townsend: That's awesome. that'sfun, man. John, thanks so much, man.

Mike Townsend: This is a really funtime chatting with you. Get to know you heard about your progress at Gr4vy.Where are you personally on the internet? Are you actively tweeting or writinganywhere?  

John Lunn: I don't write as muchas I used to. I'm kind of busy with this startup thing. But yeah, no, you canfind me on LinkedIn.

John Lunn: You, you probably findme mainly LinkedIn is, is what I, I tend to stick to. I do tweet every sooften. I just don't have as much time to do that, but come and find me. I liketo talk to people about things. Sweet John line. Appreciate it, buddy. Allright. Great. Thanks for your time.

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