2952: How BT Group's Incubation Hub Etc. is Revolutionizing Small Business Payments

[00:00:00] Have you ever found yourself wishing for a simpler way to handle business transactions on the go? Well today here on Tech Talks Daily I'm going to be joined by John Gutsch and he is the FinTech Product Director at Etc, which is the incubation arm of the BT Group.

[00:00:23] And they've taken significant stride in making commerce easier with their groundbreaking innovation called BT Tap2Pay. This solution allows small business owners to accept contactless payments directly through their iPhone, with no extra hardware required. So imagine the freedom and efficiency this could bring to your business operations.

[00:00:48] But obviously as a tech podcast host my thought process is ok this is great but how does it work and what real world problems are we solving for today's entrepreneurs and small to medium sized businesses?

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[00:02:19] Safe Edit Next Generation DRM. Once again that's kiteworks.com to get started today. But now on with today's show. So buckle up and hold on tight as I beam your ears all the way to the UK where you can join myself and Jon in conversation today.

[00:02:38] So a massive warm welcome to the show Jon. Can you tell everyone listening a little about who you are and what you do? Yeah absolutely so thanks for having me. So I'm Jon Gutsch, I'm the FinTech product director etc.

[00:02:52] So we are the startup and incubation arm of BT Group. So our kind of core focus is on our building and accelerating businesses in emerging categories that are adjacent to BT. So things like drones, EV charging, health tech and FinTech which is obviously what I look after.

[00:03:09] One of the reasons I was excited to get you on the podcast is I'm hearing more and more about approaches like this. A few weeks ago I was at Cisco Live, I was talking to the guys at Outshift by Cisco and

[00:03:20] again almost bringing together not just R&D but treating these smaller projects like mini startups. So I've got to ask what inspired the partnership between etc. at BT Group to develop this BT tap and pay app? I feel there's got to be some kind of story there right?

[00:03:37] Yeah absolutely so I think that the start of this partnership really followed us identifying a clear pain point for our small business base. So BT's got over a million business customers and we found in research that our business owners just want their business to work.

[00:03:54] And so also one thing that was really evident is that as a small business owner you're not just the owner, you're the CEO, the CFO, you're trying to run marketing, you're doing commercials and quite often they're also the workers with the feet on the ground.

[00:04:09] So when we talk to the owners that are trying to juggle all these things one thing came really clear and evident which is payments is a massive pain point. So whether they're trying to take payments whilst they're on the move or whether they're

[00:04:23] working from home it can be quite cumbersome. So we've built Tap2Pay to help remove some of that pain for our customers. And our kind of partnership with Adeon is really around number one partnering with a global market leader in the payment space is brilliant.

[00:04:41] We can leverage all of those expertise that the team there have. But I think probably secondly is around the collaborative approach to relationship and our teams are really together and operating as one.

[00:04:52] And so that way I guess we stay laser focused on our goal and that goal is to deliver a really great experience for our customers. And I love that opening line there, you started with the pain point first not the technology

[00:05:07] and at a time where many fall into the trap of tech first especially even AI first is a big buzzword at the moment they look for the problems that they can solve. It's incredibly refreshing to hear the approach that you're taking here.

[00:05:19] So again going back to that problem how does the BT Tap2Pay app stand out from other contactless payment solutions that are available in the market that listeners might be aware of? What makes you guys stand out? Yeah so for us it's all about the experience.

[00:05:33] We know that taking payments can be cumbersome and we want this part of the day for business owners to be effortless. And so utilising just their phone they can take a payment without the need of any extra

[00:05:46] hardware so it helps them lower their costs and any hassle that comes with having to plug in and charge different devices to work together. And ultimately it enables them to kind of streamline their business and grow at the same time.

[00:06:00] Love that and just to bring to life what you're talking about there are you able to expand and explain on how the BT Tap2Pay app also leverages the power of the EE network to benefit small businesses?

[00:06:12] It seems that you're going after quite a few big problems for these small businesses. Yeah absolutely and of course leveraging the kind of power of the EE network means that our small businesses can take payment from virtually anywhere and I think that's the

[00:06:26] real key here is we've all got to walk around with phones in our pocket. If you plug that into kind of the UK's best network in EE then it enables a really great experience for our customer base.

[00:06:38] The question I've got to ask when we're talking about things like this is security and privacy features. Is there anything you can share on those features of the BT Tap2Pay app that may be better ensure safe transactions for both businesses and customers?

[00:06:53] Because I would imagine when you talk with these small businesses you sit down and have the conversations with the key teams and security teams. I would imagine these are some of the first questions that come up right?

[00:07:02] Yeah absolutely and it's one of the first things that we had to make sure that we're getting right. So Tap2Pay on iPhone uses all of the built-in features of iPhone to keep the business information and customer data private and secure.

[00:07:18] So when a payment is processed no card numbers are stored and shared between systems or anything like that. So business can be rest assured that their business stays theirs. We also leverage other security protocols such as built-in fraud prevention and risk tools

[00:07:38] as well as things like biometric login for the app itself. So we're probably all used to using our thumbprint or our face ID to get in. So again leveraging all of those different kind of protocols that are out there it allows

[00:07:49] us to make sure we can stay safe and secure for businesses and their customers they're transacting with. And before you came on the podcast I was doing a little research on you and one of the things that stood out to me was BT's 1.4% transaction rate.

[00:08:05] If I go back to my former IT life I remember having a lot of conversations with various companies and that 1.4% feels incredibly competitive. So I've got to ask how does that compare to other payment processing options that small businesses might be working with? Yeah absolutely.

[00:08:21] So it's a very competitive price which obviously is attractive to our customer base. I think for us our process that we run through allows businesses to take payment, have access to their funds within 48 hours.

[00:08:38] That means a lower risk of kind of unpaid invoicing or work that's been completed and that 1.4% transaction fee is really attractive to them. And I'm curious, you're probably locked down as to how much you can share but ideally how

[00:08:53] do you see this BT tap to pay app evolving in the future to meet the needs of small businesses as technology advances? We're already seeing the speed of AI and how quickly that's changing things but do you

[00:09:03] say this is much more of a journey than a destination and how do you see it evolving? Yeah absolutely. I mean look we're 10 weeks into launch and you're constantly learning in the whole product process.

[00:09:15] I'm sure your listeners will agree, anyone who's worked in product it's always a massive learning curve. So look we'll be bringing some more features into tap to pay over the coming months. We are always focused on the customer problem and that's something that we always want to

[00:09:31] come back to. So for us we talk about running customer research and customer labs and that's not just a kind of saying every day my team are out there speaking to customers.

[00:09:41] And so you learn a lot from doing that, you learn a lot about the mistakes you've made and how to put them right. And so for us it's all about building out that roadmap of the future to have a real kind of robust product for our customer base.

[00:09:55] And as you said it is early days, 10 weeks post launch but I would imagine, well as you just said that your team are speaking with your customers on a daily basis and although it is early, have you had any feedback that you've received from small businesses?

[00:10:11] Any trends in what the customers are saying who are already using this pay app? Anything you can share around that? Yeah sure, I mean it's been really interesting and I think it's a purposely built simple product that's making a big difference for our business customers.

[00:10:28] So we've got a lot of industries that our merchants operate in. So we've got kind of hairdressers and plumbers to fast food pop-ups and sports clubs using this product. And actually an example that is relatively recent is one of our customers is actually

[00:10:43] a driving instructor in the UK. And so we all know we've moved away from using cash in a day to day basis and actually more and more people are carrying less wallets so we stopped using card.

[00:10:55] And so his customers can make contactless payments through their phone or their watch or wherever it needs to be. And actually this driving instructor told us that this product for him is a game changer. As his words, none of the kids ever carry cash.

[00:11:12] So while they're out there in the car and they've just completed a driving lesson and he needs to take payment, they can do it there and then straight from the phone. So we've had some great positive feedback in these kind of early weeks and as I said

[00:11:23] earlier on, we're learning a lot and we're picking up some new features along the way. And when we started our conversation, say we were talking about etc as the incubation arm of BT Group.

[00:11:36] So can you expand on how it supports innovation and development of new technologies like BT Tap to Pay and maybe other areas as well that you probably can't talk about today within the organisation? Again, I've seen more and more of this kind of approach. It feels incredibly refreshing.

[00:11:54] Is there anything you can share around this and how it helps support innovation and development of new technologies? Yeah, sure. I mean, it's definitely a fun and busy place to work. So we kind of, for the things that we work on, we're accelerating businesses in these

[00:12:08] emerging categories that are adjacent to kind of core BT. And so some of those things are fast ideas that we can work through and kind of fail fast and learn from. Those are almost like creating startups from within.

[00:12:24] So as an example, we recently announced that we are running pilots across the UK to convert all of the cabinets that BT currently own. So these are the green cabinets that are pretty much found at the end of every street that carry the copper broadband to people's houses.

[00:12:42] As we roll out fibre broadband across the country, those green cabinets are becoming more and more redundant. And actually what we're looking to do, and we're currently running a pilot on, is converting all of those cabinets to electric vehicle charging points.

[00:12:57] So we are solving a problem for people that have electric vehicles. I am one of those people that you can imagine struggle to get charging points all around the country. But we're also solving a real infrastructure problem for the government in the UK.

[00:13:11] So I guess that's an example of kind of one, perhaps recycling or upcycling, if you'd like to see from a previous technology that's no longer required into something that's far more sustainable and ready for the future.

[00:13:25] And I just love that concept of almost having startups from within an organisation. Is there real excitement and buzz around it in the company? Because again, it feels so refreshing. Yeah, it absolutely is.

[00:13:37] I think that having done this before in previous places and kind of taking that model and apply it again, I think it always creates the buzz and excitement. I think that the key thing for us is to stay focused with all kind of incubation and innovation

[00:13:53] areas of businesses. It's really easy to be distracted with the abundance of ideas that come through. And with a business like BT, obviously, I'm sure you can imagine the size and scale. There are hundreds and hundreds of ideas.

[00:14:05] And I think one thing that advice to give or one thing that we always want to kind of stick to is making sure that we are laser focused on our goal. We set a strategy and we see it right through.

[00:14:16] But absolutely, a lot of excitement around the business, which is always a good thing. And I also think everyone listening, regardless of their industry, will be feeling this real pressure to be in a state of continuous learning. I think it's something that we all feel right now.

[00:14:31] And as someone who is helping lead the way with these emerging technologies and bringing new solutions to market, I've got to ask, where or how do you self-educate? Anything you can share on that? Any tips? Yeah. I think that's right.

[00:14:44] A lot of people in these positions feel a lot of pressure and things can be really stressful. I think it's always key that you take some time back for yourself, doing what you love or having an interest in a hobby.

[00:14:57] I like to play golf and a lot of time you get a lot of thinking time on the course. So it's good for that. But also, I think people learn in different ways. Perhaps the traditional methods of learning around doing online training courses and things

[00:15:11] like that are dying a death a little bit. For me, I think the best way to learn is learning from others. So there are tons of meetups around the product space, design conferences, where you're listening

[00:15:24] to stories of how others have gone through their challenges and how they overcome some of those issues. And I think that even though you might not be able to relate to the specific topic that they're talking about, you can always relate to the process because there'll be something

[00:15:38] that you're going through or a challenge that you might learn from. So for me, it's always about listening to others. That could be through podcasts, that could be, as I said, going to meetups or conferences or even the odd TikTok video sometimes can be helpful.

[00:15:52] And it's so interesting you say that. You mentioned a few things there when you're playing golf, when you're listening to others. I would say also that in the shower, it's all these moments when we're not endlessly scrolling down our smartphones. That's when the magic happens.

[00:16:07] As a man of a certain age, I used to be daydreaming, staring out a window or sitting in your favourite chair, just staring in the spare. We're almost killing daydreaming to a certain degree because there's always something to scroll and something to watch, isn't there? Yeah, absolutely.

[00:16:20] I think, look, listen, procrastination is not always a bad thing. Sometimes you get that moment to stop and clear your head and switch subjects. And all of a sudden, you'll find yourself back at your desk and hammering away at the

[00:16:33] laptop and actually you've thought of a great idea or you've cleared some of the noise out of the way. So always good to spend time on yourself and really focus on the mind. And for anyone listening that just wants to find out more, maybe they're a small business

[00:16:48] owner and they want to find out how they can accept contactless payments via their iPhone and a BT tap-to-bat with no additional hardware or just find out more information, maybe see a video of it in action or anything like that.

[00:17:01] Is there a starting point where you'd like to send everyone listening? Yeah, absolutely. So your listeners get anyone can find BT tap-to-pay just by searching it online. You'll be able to see it across the BT and EE websites.

[00:17:14] And also kind of to keep up speed with what we're working on and what future things are coming and everything else, etc. We're quite busy and active on LinkedIn. So be sure to kind of follow myself on LinkedIn or of course our MD Tom Guy for further updates.

[00:17:30] And about right in saying I've said iPhone now, are there any plans to bring it to Android in the future and what markets are you serving at the moment around the world? Yeah, absolutely.

[00:17:39] So we're solely based in the UK for now, but Android will be available in the coming months. So look out for updates. Fantastic. Well, I'll add links to everything. I'll try and include a video or something as well just to bring it to life and help

[00:17:53] business owners to try and find out more information about how it might work in their world regardless of what industry they're in. Well, John and Anthony, just thank you for shining a light on this and bringing the entire topic to life. Fantastic work. Thanks again.

[00:18:05] Thank you for having me. Been brilliant. I think we had a fascinating conversation with John today about the transformative potential of BT Tap2Pay and how this innovative app not only simplifies transactions but also almost empowers businesses to operate anywhere securely and efficiently all by leveraging

[00:18:25] the trusted technology of the iPhone and the robust EE network. The big standout point, as I said in the interview there, is that competitive transaction rate and quick fund availability. I think it's clear that a solution like this could be a game changer for many listening.

[00:18:41] But what are your thoughts on the future of contactless payments, digital transaction solutions? How do you see technologies like this changing the landscape for small business operations? Please email me techblogwriteroutlook.com. Don't forget to follow me on LinkedIn, X, Instagram, just at Neil C. Hughes if you want

[00:19:01] to start a conversation with me or ask a question. I'm the easiest guy in the world to find. And something I do not do enough is thank you kind people that not only listen to the

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[00:19:26] But first of all, Mick NYC, if you're a regular listener to the show, which I assume you are, you left a five star rating review and you said one of the best tech podcasts around. Thanks Mick. This really is one of the best.

[00:19:39] Neil Hughes is unmatched as an interviewer and always fully informed. Incredibly kind words. I'm not sure if I deserve them, but Mick, huge thank you. And I've also got a review from Travel Luke. So I'm assuming that's a Luke. Could be wrong, but we'll go with Travel Luke.

[00:19:58] He said Neil rocks. Well so do you Luke for writing that review. But you said great insights. Neil asks insightful layered questions to a unique group of leaders. Thank you for sharing and the high production quality. All I would say to you, Luke, is no.

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