I had the pleasure of speaking with Brion Bonkowski, the Founder & CEO of Tern Commerce, a company created to help brands launch global prepaid and stored value programs through its SPAN platform, which covers user experience (UX), compliance, identity verification, and cross-border remittance.
Brion is a business leader in the payments and technology space, and also serves as the Managing Director of ROI Payments, an NYC-based tech consultancy and holds a number of executive and board appointments in the technology, payments, and non-profit sectors.
More impressively, Brion has summited Mt. Kilimanjaro five times! In 2013, he was appointed Chairman of the Kilimanjaro Initiative USA, a non-profit organization. In 2017, Brion was invited to become a member of the Young Entrepreneurs Council, a global network of the world’s most successful entrepreneurs aged 40 and younger.
Josh Goodman: Brion thanks for joining us today. Why don’t we start off with you telling us a little bit about yourself and about Tern Commerce?
Brion Bonkowski: Sure, happy to. I have spent my entire career in the payments and technology space. Starting in 2010, my partners and I identified a need for a modern prepaid platform with cross-border capabilities. We spent the next five years meeting with regulators, assembling legal opinions, and interviewing potential partners and options. In 2015, we officially launched Tern Commerce and in December of that year, we acquired a company called US Unlocked to help jumpstart our vision.
JG: How would US Unlocked help you achieve your cross-border vision?
BB: US Unlocked had been successfully operating the only US issued virtual card program for global consumers since 2008. US Unlocked’s technology and team lined up very well with our plan to build a superior global prepaid platform. Immediately following the acquisition, Tern began the process of modernizing the US Unlocked IP to a modern framework with multi-tenant capabilities to accommodate a variety of different types of programs. Building on years of best practices from US Unlocked, the Tern team built a product to manage and operate global prepaid programs – our new commercial platform, SPAN.
JG: Why the focus on prepaid?
BB: The structure of prepaid gives us a lot of flexibility in launching programs with a number of different use cases. Prepaid programs have been around for a long time, they gained popularity with payroll cards until changing regulations made those programs significantly less attractive for people who run such programs (program managers). Today, prepaid cards are used for a variety of interesting use cases, especially among FinTech firm focused on decreasing friction in moving money. With this change from payroll card to FinTech instruments – products like virtual cards, one-time use cards, limited use cards, and cards that cross currencies and regions – the complexity of managing them increases. Processing technologies are having a difficult time keeping legacy systems up to the task of accommodating this new wave of innovative projects – that’s where we come in.
JG: Okay, what would be an example of something a legacy system couldn’t handle that SPAN can do?
BB: Legacy systems were designed to authorize a transaction against a balance, that’s about it. Programs today demand flexibility to authorize transactions against a number of different balance types, be that a different currency, a loyalty balance, or even a cryptocurrency like Bitcoin.
JG: Other than legacy systems that can’t accommodate current needs, are there larger trends you think will help SPAN?
BB: The traditional banking world as we know it is evolving; non-financial institutions are now taking on some of the, if not all, the functions that traditional banks offer. The big five technology providers – Alphabet, Amazon, Apple, Microsoft, and Facebook – are chipping away at the traditional functions of banks and FinTech companies are revolutionizing banking services, especially payments.
Another trend we noticed is telecom carriers getting into the financial services space. One good example of this is T-Mobile launching their own banking and prepaid program, as well as Orange launching their own banking service this year. So as far as our industry focus is concerned, one of the primary markets is telecom providers and enabling them to easily launch prepaid products and other financial services like remittance.
JG: And how will this create opportunities for Tern Commerce or other businesses like you?
BB: This market is a global opportunity and one with a changing landscape. There are more mobile phones in the world today than there are people, so programs need to accommodate this growing “mobile-first” mentality. There are many processors and technology providers focused on specific geographic markets, offering physical cards to be used in a specific country. SPAN is globally focused, tech and mobile forward, and we support a growing list of integrated third-party partners. These global partners include identity verification providers as well as partners we rely on to “load” or “top up” funds on to our cards. Our team has engineered our platform to support both physical and virtual cards and we are actively working on our own authorization engine for clients looking to launch stored-value closed-loop solutions. Visa and Mastercard are evolving too and looking for ways to grow their brands globally and cross-border, SPAN can be seen as a catalyst for this expansion.
JG: So, what exactly is your platform?
BB: SPAN is a SAAS solution for program managers and stored value facilities. At its core, it is a robust fraud and risk mitigation solution which has been fine-tuned for years, thanks to US Unlocked. As a cross-border global prepaid program operating in over 100 countries, US Unlocked became very good at combating bad players, risky transactions, and increasingly crafty fraudsters.
Tern still operates the US Unlocked consumer-facing card program which also served as the beta customer for the SPAN platform. To explain why US Unlocked’s original platform is so significant to SPAN, let’s start with a use case.
US products are attractive to many in the rest of the world. US Unlocked addressed this market by offering a platform to onboard international customers, track their purchases and transactions against an approved merchant list, and to ensure there is no fraud or bad parties in the ecosystem. US Unlocked accommodates loading virtual accounts as well as the necessary identity verification of all the parties in the platform. In addition to a technology platform, US Unlocked had fine-tuned the process for managing an international card program that is prone to attracting risk and fraud.
When Tern took over US Unlocked and started to develop SPAN, we took all of the existing tools, processes, and controls and enhanced them.
With SPAN, we provide technology solutions for the prepaid industry on a global scale. Our platform is a good fit for new prepaid programs that wants to get up and running quickly with a consumer portal, native apps, back-office tools and CRM functions to help grow.
SPAN is also well suited to address the needs of programs with users across-borders with requirements around multi-currency, remittance, and cross-border shopping.
Lastly, we have a number of clients looking to use the SPAN platform for stored value programs both in the private and public sectors. All our clients have similar needs addressed by the core functions of SPAN: getting people identified and boarded; loading money into the platform; getting money out of the platform; and managing users and their transactions.
That is SPAN in a nutshell – basically an out-of-the-box program management solution with global capabilities.
JG: Out-of-the-box sounds good; what does SPAN actually supply?
BB: Our focus is to make our core functions accessible via API and mobile, to support a multi-tier program/account/brand infrastructure, and to support marketing distribution with agent and affiliate management tools.
On the consumer side, it’s card enrollment, card issuance, card management, and card loading. On the back-office platform side, included is a program management dashboard with fee and revenue calculation across multiple programs, agents, and discounts. Because of the integrated fraud and risk mitigation solution, program managers don’t need to worry about the KYC, AML, and regulatory environments – which is increasingly important as prepaid programs fall under increased regulatory scrutiny.
JG: Got you. Can you walk me through the experience of using your products today? What exactly am I going to get when I use SPAN?
BB: Sure. Let’s keep it very simple: you are looking to launch a prepaid program.
First, you will need to find a technology processor, a bank issuer, and a network to launch your program. This is mostly a process of negotiating and underwriting where you will need to demonstrate a technology platform for your staff to manage the card operation and a web-based portal for your consumers to manager cards.
That is where we come in by providing an end-to-end solution out of the box, which can be deployed in a matter of weeks.
We work with several processors, issuers and program managers and are happy to make appropriate introductions if needed. If you already have a processor and program manager and we are not integrated to them yet, we can very easily add them to our platform. If you were looking to launch an international program we would use our networks of international banks, and if looking for a cross-border solution, it may involve two banks in two different geographies. We can support all of these use cases today.
JG: That sounds great. But what are the challenges?
BB: Our biggest challenge is accommodating changing regulation as well as updated rules and pricing by the major networks on a global scale. Add to this an increasing threat of seasoned fraudsters trying to attack every element of the payment ecosystem. We definitely have our hands full.
JG: Yeah, that makes sense, given the global aspect that you’ve been discussing. We’ve all seen where fraud numbers are going. So what’s next for SPAN? Do you have any upcoming milestones or announcements?
BB: We are pleased to announce we have successfully completed our beta launch and are releasing the SPAN platform as a SAAS solution publicly in December 2017. This first release includes flexible multi-currency, multi-language functionality to quickly launch domestic, international, and cross-border card programs. For 2018, SPAN will be launching native apps for our clients to easily launch mobile programs as well as a flexible, real-time, closed-loop authorization engine.
After that, we will start to deploy a growing suite of banking services through our platform available online and through our mobile app. Just last week, RBS announced they are closing 25% of their branches, and this trend will continue as more people the world over turn to their mobile phones, rather than traditional branches, for banking. Our long-term vision is to provide a host mobile banking solutions deployed through our partner channels.
As of now, we are ready to onboard new customers, partners, and service providers.
JG: All right. So if someone wanted to be on your platform, what would they need to do to get started?
BB: I would recommend interested parties contact us for a demo and request access to our API docs. From there, one of our solution folks will review their go-to-market strategy and identify what elements SPAN can assist. If the customer already has an app or a portal or a consumer-facing platform, we would either work with them to integrate our APIs or put our heads together on how to provide the best consumer experience with SSO.
JG: Got you. And do you have any closing thoughts or anything that you want people to know about where your SPAN platform is today?
BB: I think we are just scratching the surface of the capabilities and market opportunity of SPAN. We consider ourselves super fortunate to have built off the code and knowledge base of an incredibly successful and unique cross-border prepaid program, US Unlocked. Our team is excited about the SPAN platform and are focused on becoming the most advanced prepaid card management and stored-value solution on the planet. We encourage people to stay tuned to see what is next or reach out to us for a demo or a chat.
JG: All right, Brion thanks a lot for joining us today and I look forward to seeing the formal rollout of the SPAN.
Brion: You bet.