May 19, 2014 Issue
The Most Powerful Name In Corporate News and Information
Online Payment Gateways for Merchants
BlueSnap is a
smarter payment gateway company that looks at eCommerce a little
differently. We are veteran developers, technologists, and business
professionals who are globally minded, customer focused, and constantly
driven to innovate. We believe every customer has the right to a seamless
online experience and the ability to purchase easily, quickly, and securely.
And because merchants spend countless hours bringing their products to
market, they deserve the technology, tools, and support to create an
exceptional buying experience.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – May 19, 2014
CEOCFO: Mr. Dangelmaier, would you tell us the basic concept at BlueSnap?
Mr. Dangelmaier: The concept of BlueSnap is to help merchants sell online by integrating to their shopping carts. We do that in three ways. One way is to build a customized solution with our best-of-breed API library.
The second option, allows you to use our APIs with client side encryption, which eases the scope of PCI compliance but with the flexibility of customization. And finally the third way, which makes us a bit unique is with our BuyNow checkout templates which allow you to simply embed the page on your site and provides a local checkout experience for 30 languages, 60 currencies and 110 payment types and it will work on any device.
CEOCFO: What were the challenges in putting the technology together to allow this to happen?
Mr. Dangelmaier: The company has been around for about ten years. It initiated in Israel and like many startups, it accumulated thousands of clients. What was happening was they found that merchants were having a great deal of trouble trying to code to all these different countries and payment types and languages to reach other markets. In Israel we utilized new technology to allow merchants to simply insert into their checkout page an ability for these templates to be displayed. You would not even know that you are making a payment outside of their website because it looks like it is part of the checkout experience for the merchant.
CEOCFO: Are there security concerns?
Mr. Dangelmaier: No, the merchant security concerns are actually greatly reduced since using these tools greatly reduces the scope of their PCI Compliance.
CEOCFO: How long has the offering been available?
Mr. Dangelmaier: Believe it or not, the first version of the offering has been around for three or four years. We have updated the offering and announced it to the world because our company was bought a couple years ago by a private equity company in Boston. Through many initiatives, it brought in some new management teams and we are investing in sales and marketing that to this scale has not really occurred before.
CEOCFO: Why is this the time for the push?
Mr. Dangelmaier: We think that ecommerce sales is still in the first inning of growth and there are many companies now that have sold within their country and are now looking to sell internationally, globally or cross-border. We recently announced that about a quarter of the merchants that sell online today do not sell globally. We think this is a great time to go to the market and talk to merchants about selling into more countries.
CEOCFO: Would most companies love to sell globally and are they equipped as far as shipping where it makes sense to sell globally?
Mr. Dangelmaier: I think you need to look at people who are selling digital goods, content and information separate from folks that are selling physical goods. If you are selling digital goods, I think you want to reach as many people as you can. For those people they would love to sell globally but it has been a lot more difficult and we simplify it. For the people selling physical goods there are a couple more problems to tackle such as the shipping fulfillment and in some cases taxes. We have integrated into the shipping companies as well as a tax company so that is all pre-integrated for the merchant and it makes it easier for them to be able to sell internationally.
CEOCFO: When you are speaking with a prospective customer do they understand the depth of what you offer?
Mr. Dangelmaier: It takes a minute for people to realize how simple it is to take our checkout templates and integrate them into their existing webpage. I think there is an aha moment and it is mainly from people who have actually tried to build these before. We have talked to many merchants who say they have spent eight months with ten developers and they can only go into twenty countries. They say they did not even know something like this existed and they wish they knew before. We have had many people who’s jaws have dropped and said that it seemed almost impossible because they had spent so much time trying to build out their global offering. We just started telling our story the last few months about these new templates, so it is a learning experience for the merchant.
CEOCFO: How are you reaching prospective customers?
Mr. Dangelmaier: We are doing press releases and we are advertising in places like Tech Crunch. We are doing campaigns to merchants that we see fit. We are going to conferences and attending over fifty conferences this year to display our product and show them how it works.
CEOCFO: What is the competitive landscape?
Mr. Dangelmaier: At the surface, it looks like many people offer this. Many banks offer acquiring relationships. PayPal offers acquiring relationships and there are smaller banks that offer this. When you look at the details and you look at what they are offering, very few offer the scale of what we are offering with the flexibility to have it your way. We do things that most people do not have integrated such as subscription services and couponing. We offer AB testing where people can try two different templates in the same geography to see which one converts better. We offer things like tracking or digital downloads. We do quite a bit more than traditional payment gateways, which is why we call ourselves a smarter payment gateway.
CEOCFO: Does your message resonate?
Mr. Dangelmaier: The biggest problem is everybody seems to be writing about SDKs and APIs and build your own checkout. I feel like it is a one-sided discussion and people have not looked at the alternatives for how you can help merchants sell all over the world quickly. I feel like this story has not been told.
CEOCFO: Why would anyone want to build their own today?
Mr. Dangelmaier: Many people feel the need to control everything. My point is that you don’t need to do custom development and build out a checkout page entirely on your own, sure if you want to you can but, there is a way to also control the way our templates look and get to market faster with better functionality. For example, say we have been in Russia with two hundred merchants and we have been watching this for four years and think we have figured out the optimal way to create a checkout page in Russia to optimize your sales in Russia. I don’t see why people would not want to take advantage of that.
CEOCFO: What are the challenges of people not understanding the value of having BlueSnap work for them?
Mr. Dangelmaier: I think the biggest issue is people just have not heard of us. We are a new name with a product that has not been recognized. I think people who have been in this space for five or ten years feel like they have heard everything so they are cautious. Secondly, many companies have been started by technical people and I think technical people think they should build things. We find that the companies that seem to do very well are the ones that figure out where they should partner and build. It is more about integrating than it is about building.
CEOCFO: How did you come up with the name BlueSnap?
Mr. Dangelmaier: We have a slogan “Powered BUY BlueSnap.” We are trying to power your buy, built in the cloud, snapping into your ecommerce site. If you do that, we think our tagline is we will convert more of those shoppers to buyers than anybody else you are working with.
CEOCFO: What is your revenue model?
Mr. Dangelmaier: Our revenue model is the same as the current acquiring model that is around the world today which we take a percentage of the transaction; a small transaction fee.
CEOCFO: You are opening new offices for the global expansion. How have you decided where?
Mr. Dangelmaier: It has been for two reasons and one is where the market is. The market is very good in North America, the EU and London is a good spot for that and Australia. We have expanded our offices in Israel because of the demand that we have seen for our products so far.
CEOCFO: How might the company be different a year or two from now?
Mr. Dangelmaier: I hope it is much bigger. I hope that we have offices in more locations around the world. We are looking forward to announcing some large merchants that have decided to partner with us and not build out all this functionality.
CEOCFO: What attracted you personally to the company?
Mr. Dangelmaier: I have been doing payments for 25 years and I worked in a bank and a venture software company, a public software company and a private equity software company. I always said to myself that if I saw an opportunity where payments was going to be disruptive and we were going to see a massive change in the way people do business that I would look for an opportunity to try to engage in that kind of company. What I say when I was traveling the globe at my prior company was that the concept of paying with your phone was just what everyone wanted. I think the idea of swiping at some point will be something of the past. No different from ten years ago when we all started doing banking with internet banking and I felt that this was going to be a drastic change. I think now when you have about seven or eight percent of us buying things online that there is a good chance in the next ten years it will be fifty percent of us buying things online or on our phone. There is a chance to jump into the middle of an incredibly exciting and disruptive time and payment.
CEOCFO: Your press release on upgrading your ecommerce checkout packages indicates that it features iPad optimized page design. What is that?
Mr. Dangelmaier: That means that when you are shopping on your mobile device that the screen will optimize to fit in the device. You would be surprised how many sites are not optimized to deal with android, iPad and iPhone buying.
CEOCFO: Why pay attention to BlueSnap?
I think we are going to be the most disrupted and popular payment partner
for cross-border or international payments in the next five years.
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