The Executive Interview Series provides readers with exclusive insights from movers and shakers in the payments industry. The Payments Industry is under continuous transformation, as such this series provides diverse perspectives on everything from strategy to payments technology and to the future of the industry.
In this interview, TSG’s Market Intelligence team member Alex Ferguson sat down with the Head of Carat and Global Digital Commerce at Fiserv, Nandan Sheth, to learn more about Carat and how they are helping enterprise merchants collaborate limitlessly with their payment partners across the globe.
Background: Nandan Sheth serves as the head of Carat and Global Digital Commerce at Fiserv. In this role, he works with Fiserv clients to deliver groundbreaking digital solutions via Carat, the firm’s omnichannel commerce ecosystem which enables next-generation commerce experiences for large national and multinational companies. Leveraging world-class expertise and continuous innovation, Carat technology supports many of the world’s most admired global brands and processes more than one billion omnichannel transactions each year. Prior to joining Fiserv, Nandan was a seasoned payments executive with a track record of launching and building innovative VC backed FinTech companies. Notably, Nandan co-founded successful payments companies, including Harbor Payments, acquired by American Express in 2006, and Acculynk, acquired by First Data in 2017.
Q. TSG’s Alex Ferguson
How did you get your start in the payments industry?
A: Nandan Sheth
After finishing my MBA in London, I started working with AT&T on two payments-specific projects, the first a network strategy to help MasterCard better serve global clients, and the second with a payments and billing team working to build efficiencies in its global infrastructure. Both projects showed me there was significant opportunity to execute on a better digital payment infrastructure.That sent me down an entrepreneurial path, and sparked my move to the U.S. I began working with a fintech incubator in Atlanta, a city which had become a hub of fintech innovation, and eventually co-founded my first startup, called eDebt, the first company to score risk on debt portfolios. Later I co-founded Harbor Payments (acquired by American Express), a B2B payments company which digitized AR and AP payments, and Acculynk (acquired by First Data) a company specializing in ecommerce, debit routing, and digital payouts.
Q. TSG’s Alex Ferguson
You’ve had a long career in payments, being involved in the industry in some way for over two decades. How have you used your past experiences to benefit you in your current role as the Global Head of Carat and Digital Commerce?
A: Nandan Sheth
The focus throughout my career has been launching net-new transformational products that support large enterprises, and delivering them to market so they are built to scale. That background, along with the ability to serve clients in a manner that is agile and responsive, similar to how startups operate, is fundamental to what we are bringing to market with Carat.Additionally, having a breadth of experience that touches so many arms of our global industry has been beneficial as we build partnerships with fintechs, issuers, and networks that will benefit our clients.
Q. TSG’s Alex Ferguson
Given your background with startups in the payments industry, what emerging opportunities do you see for young startups to bring added value and innovation to digital commerce?
A: Nandan Sheth
I think there is tremendous opportunity for highly-verticalized solutions serving industries like insurance, gaming, and healthcare that build value on top of the payments ecosystem. Beyond the vertical approach, fintechs that enable the use of data and analytics and artificial intelligence to drive optimization, and embedded financial services are two other emerging opportunities with room for growth and disruption.
Q. TSG’s Alex Ferguson
Looking back at all your experiences, what do you feel is your biggest contribution to the payments industry thus far?
A: Nandan Sheth
Bringing to market the first PIN-on-glass solution to enable PIN entry for online transactions is something I am incredibly proud of. With that foundational technology, Fiserv was the first acquirer enabling grocers to accept electronic benefit transfer (EBT) transactions online in 2020, functionality that was critical during the pandemic as more consumers shifted to online purchasing. That solution is leveraged today by grocers across the U.S. and is allowing more than 40 million EBT users each month to digitally purchase groceries.That ability to collaborate globally with issuers, networks, and merchants is also something I am proud of. This includes forging partnerships with companies like NPCI, Alipay, and China Union Pay through which a cross pollination of value is created for U.S. and international partners; it also includes our current work with the Carat Advisory Council, which brings influential industry players together to strategize on the future of omnichannel commerce.
Q. TSG’s Alex Ferguson
Some may be unfamiliar with Carat, as it was just publicly announced in November of last year. Tell us a bit more about Carat and how its approaching enterprise differently.
A: Nandan Sheth
Carat is our connected omnichannel ecosystem that securely enables commerce for enterprises across any channel with any payment method, at global scale. Or, put more simply, Carat is the technology helping large companies create commerce globally without being limited by borders, currencies or old ways of thinking. And we are doing so by going beyond online or in-store payments to enable commerce at different points along the consumer journey.For example, imagine grocery shopping online on a Saturday morning. Through a voice command you fill your cart with goods, then schedule curbside pickup at your local neighborhood market. Before checkout the grocer makes tailored recommendations to you based on your purchase history: your favorite bottle of wine is on sale, and you may want to buy salsa to complement your bag of chips. With a simple click you add both to your cart and check out. Arriving for curbside pickup, you scan a QR code with your mobile app to pay, then a digital receipt is delivered to your mobile wallet alongside a digital gift card to use on your next purchase to increase customer loyalty.
The above is a simple example that resonates with how modern consumers expect to engage with a retailer, but requires complex commerce orchestration to execute in a seamless manner. With Carat, our goal is to securely and simply enable these commerce experiences across any channel, any payment type, and any device.
Q. TSG’s Alex Ferguson
How does Carat differ from how Fiserv/First Data worked with enterprise clients previously?
A: Nandan Sheth
The payments industry can be complex. And we understand that enterprises are trying to limit complexity by accessing solutions from a single provider.Carat enables enterprises to access pre-integrated solutions to enable these commerce experiences. Once connected to Carat, an enterprise wanting to enable Buy Now, Pay Later (BNPL), integrate with an Amazon Alexa-enabled device, or turn on a new payments capability can do so through a simple API. These out-of-the-box integrations include Fiserv solutions and third-party technology, all with the goal of expediting the speed in which a large enterprise can create commerce in a simpler manner than before.
Q. TSG’s Alex Ferguson
There’s been a lot of coverage over the past year on the unique hurdles SMBs have struggled with during the COVID-19 pandemic. What are some of the unique hurdles that enterprise merchants have been experiencing during the pandemic?
A: Nandan Sheth
As enterprise merchants bring new technology to market, it is a prerequisite that it is built to last. Creating this sustainable omnichannel commerce model involves three components:
- Connecting Digital to Physical – Customer experiences must be built to ensure that they are seamlessly connected across digital and physical channels. The modern consumer doesn’t just shop online or in-store, they view their relationship with each brand as a continuous journey across physical and digital interactions.
- Seamless Integration – Conceptualizing new, enriching experiences is the simple part of omnichannel, while connecting back-end systems across platforms, gateways and providers is the key to any successful payments experience.
- Optimizing Commerce – Mitigating costly fraud risks, managing processing expenses, routing transactions efficiently, and optimizing authorization rates are essential to building omnichannel commerce supported by sustainable economics.
Q. TSG’s Alex Ferguson
You authored a blog post in May 2020 discussing how the COVID-19 pandemic and social distancing would affect consumer financial behaviors long term. Now about a year and a half after the initial shutdowns, what are some of the lesser talked about new trends you’ve noticed in payments you feel will persist into the future?
A: Nandan Sheth
I’ll leave you with three trends our clients are increasingly discussing:
- Evolving payment types – Consumers are transacting in different ways, and it’s changing the mix of payment types occurring at businesses. According to our recent Carat Insights Report, contactless payments have grown 450% year-over-year from 2020 to 2021, debit now outpaces credit spend for online purchases in the United States, and consumers are becoming interested in exploring advanced payment methods like crypto, QR codes and BNPL. These trends will continue to evolve into the future, with continued acceleration to emerging payment types in the years ahead.
- The power of payments data – In a digital world, using data is invaluable. Our clients want to use payments data to better understand who their regular customers are; they want to understand how data can help them limit the amount of returns they receive; and they want to use data to better optimize their payment flows. As digital engagement continues to drive growth in omnichannel commerce, how businesses use data to their advantage will become a primary differentiator.
- Reimagining digital payouts – Clients in verticals like insurance, gaming, and healthcare are leaning into the digital future and looking to strengthen B2C payout structures. We see incredible momentum for digital payouts, with numerous clients looking for ways to use this capability to optimize costs, enhance customer experiences, and even strengthen brand awareness with younger generations.