FreedomPay on The $44.4 Billion Payment Risk Facing Retail And Hospitality

[00:00:03] What does resilience actually look like when payments fail? Because as customers, we're impatient and every minute of downtime turns into lost revenue. If you've ever come across a failed payment or had trouble when trying to purchase something, I suspect like me, you quickly move on to somewhere else.

[00:00:24] Well, today here on the Tech Talks Daily podcast, I'm recording live from the heart of the Dynatrace Perform event here in Las Vegas. Yep, the noise, the lights and the conversations are all once again pointing to one big theme. Systems have to work, even when everything around them does not.

[00:00:47] So this is a show where operators, engineers and business leaders are all walking side by side enjoying fantastic conversations. But they're not talking about theory. They're talking about real systems, real outages and very real consequences. So today's conversation hopefully is a perfect example of just that. Because I'm joined by the software engineering team lead at FreedomPay.

[00:01:14] And they are a company many of you have interacted with without even realising it. From hotels and stadiums to retailers and hospitality venues, FreedomPay sits quietly underneath everyday commerce. Essentially making sure transactions keep moving when pressure is at its highest. So today we get into what payment resilience actually means.

[00:01:41] Why outages are becoming routine rather than rare. And how observability and AI are changing the way engineering teams respond when things go wrong. And yet we'll also talk about that uncomfortable gap between how long customers are actually willing to wait. And how long outages actually last. And why that gap is where trust and loyalty can quickly disappear.

[00:02:10] But now it's time to head on to the show floor at Dynatrace Perform. And hear directly from my guest who's waiting to talk about why resilience can no longer be treated as just a nice to have. So thank you for joining me here at Dynatrace Perform. Can you tell everyone listening a little about who you are and what you do? Yeah, Neil, thank you so much for having me by the way. I'm Victoria Rufo. I am a software engineering team lead at FreedomPay.

[00:02:40] Let me tell you a little bit about FreedomPay. We provide a payment orchestration platform that covers like all aspects of commerce in one platform. So merchants can just do everything in one place. And my team is responsible for FreedomPay's terminal management system, which we call DMP. And that allows merchants to effortlessly manage their estates, keep them up to date remotely by updating software and configurations right from a portal. They can even use on-device screen space for their own ads.

[00:03:09] So when you come in here to the Venetian where we're having this chat right now, you may have seen, you know, secured by FreedomPay when you checked in. That's us. That's incredibly cool. And I've got to ask, what is it that brings you to Dynatrace Perform? And what do you make of everything you've seen and heard so far? Yeah, so this is actually my third year at Dynatrace Perform. FreedomPay has been using Dynatrace to my system since 2022. I went to my first Perform in 2024. I was kind of an early adopter of Dynatrace at FreedomPay.

[00:03:38] We had like our SREs, our performance teams using Dynatrace. That was all happening. But I am a software engineer and we didn't necessarily have the buy-in from engineers early on. But I had had some background in observability in the past. In one of my early jobs, I had worked on making like custom heat maps for our servers before like we knew about tools like Dynatrace and all that. So I've always known like you want to know what your app is doing as a developer. So when I got access to Dynatrace, I was like, this is great.

[00:04:08] So I came to Perform three years ago and it's incredible. This is like no conference I've seen anywhere else. It is so energetic. Everybody is here to talk about how can they make their systems resilient, performant. It's a great time. So it's been fun so far. It just started. But I'm already excited to hear about how AI powered observability tools can help us. AI is everywhere. We cannot deny that it's here. It's in every single room. That's what Rick said.

[00:04:38] So we need to be thinking about how AI can help our systems. And outside of this conversation we're having today, you've got a few sessions as well, I believe. So what are you doing there? Sure. So I am going to be on innovation stage today with a handful of people from Dynatrace and then someone from Microsoft. We are going to be talking about cloud observability and AI, the hot topic, and how that all ties together so you can really monitor your entire cloud ecosystem. Incredibly cool.

[00:05:06] And tell me a bit more about what prompted Dynatrace, FreedomPay, and Retail Economics to collaborate on a recent report there. And what question were you trying to answer right from the outset? Sure. So global commerce has been experiencing what feels like more and more outages than ever that are bringing businesses to a screeching halt. And that could be really any number of things. You could have a cloud provider outage, an internet service provider outage. You could have a local power outage.

[00:05:35] And these just take out a business entirely. But there's growing payment vulnerability amongst merchants of all sizes. And FreedomPay, Dynatrace, and Retail Economics saw this as an opportunity to educate businesses and merchants. By having the right partners and technology in place, you can continue your business during a disruption, keeping revenue and customer loyalty. And when people hear that word payment outage, they often think of rare disasters.

[00:06:03] But in the UK, for example, the last 12 months, they've become more and more frequent. So how does your research reframe outages as an almost routine operating issue? I think they're not just a rare disaster like we used to think about. And we do outline this in our research, and I also mentioned just before, of all the different reasons that there could be an outage. The ISP outage, the cloud provider outage, power outage. You could even have your payment system is having problem connecting to the gateway.

[00:06:31] There could be a cyber attack on your payment provider, yourself, anyone. There's just so many things that could cause a disruption these days that it's not just some freak accident. And merchants at this moment can't really predict when these outages are going to happen. So they need to have resilient payment systems in place. They need to have backups. I think some of this is going to start changing with the advent of AI, that they're going to be able to anticipate and prevent issues.

[00:06:58] So I'm hoping that FreedomPay and Dynatrace can team up to do some of that and help our merchants be ready for outages instead of just reacting. And consumers are so quick to move on, aren't they? I know for a website, for example, if it doesn't load in five seconds, you're off. You're going somewhere else. If your payments decline more than once, you're going to be straight somewhere else, aren't you? Yeah, I think it's so funny too. I've been working at FreedomPay for about four years now and working in payments and being a software engineer. I should know not everything can be resolved quickly.

[00:07:28] Let's say I go to a store. I know that the person, the cashier, did not implement the payment system. I know the cashier probably isn't at fault for the payment outage, but I'm really busy. So I'm in and out. I think something that is impactful for people to think about is because you think seven minutes, that's not too bad. You can browse your phone for seven minutes. But if you have your lunch break, 30 minutes, right? You need to go out and grab a sandwich and a coffee.

[00:07:56] You show up and they say, sorry, can you wait seven minutes to pay? And you're like, I only have 23 minutes left in my lunch break now. And I probably have to walk back to the office and eat and then like probably go to the bathroom, like all these things. No, you don't want to wait seven minutes for that. And I think we're getting less and less patient. I think we all think we're patient, but honestly, we're not. And I think that's OK, though, because customers expect a frictionless payment experience. And that's like why Freedom Pay is here to deliver that.

[00:08:26] We want merchants to be successful in having, you know, selling their products and having the customers be happy. And going back to the study there, it puts 44.4 billion of U.S. retail and hospitality states at risk every single year. So anybody listening, maybe they're in the industry there. How should they interpret that figure in practical everyday terms? Honestly, I think that the 44.4 billion dollar figure isn't necessarily the most staggering part about all the research.

[00:08:55] So as we talked about that seven minutes. So on average, customers will wait up to seven minutes during an outage. Some people might wait up to 23, but really no one more than that. But your typical payment disruption can last up to two hours. So that's a huge gap between customer expectations and reality. And 65 percent of that revenue is lost in those first 23 minutes.

[00:09:18] Some scenarios where this may be really impactful on the merchant side, stadiums that rely on about 15 events per year. If they have an outage during one of those events, they're not just losing revenue targets that they need to meet, but they have to pay their staff. You know, they have 15 or so events to get the money to pay their staff. So if they have an outage, what are they like? Can I can't pay you? Sorry, I'll pay you next week. Like, that's really rough. Not just for the merchant, but for all of their employees.

[00:09:46] And yeah, the other bit that I mentioned about the lunch break. Yeah. We're all so busy these days. We can't really be wasting our valuable time waiting for something like this that I think really could be prevented. And you mentioned a few moments ago about how you're checking into Venetian and obviously the payments are there. In a former life, I was an IT guy and I remember supporting Aloha Tills. To this day, I still get a kick out of seeing those tills and thinking I used to work on those tills. Do you get that everywhere you go when you see your little payment thing still?

[00:10:16] It's great. I take little pictures. I'm always like doing a stealthy picture because I imagine that as the person checked at a hotel desk or at a merchant, they don't really want people taking a picture of their payment terminal, but I'm just like leaning forward in my phone. And sometimes if they notice, I'm like, hi, I work for FreedomPay. Please don't think I'm weird. I'm just really excited. It's actually cool. FreedomPay is the first company I've worked on, worked at rather, that has a product out in the wild that I can use.

[00:10:44] I've worked primarily on more private companies. FreedomPay is private, but we have a public product. So it is very cool to go out in the world and say, hey, this is me. Whether I'm telling the person at the hotel or my friend who I'm out with for lunch and I'm going, look, look, this is me. FreedomPay. So it's very cool. It is cool. I'm glad I'm not alone for taking weird pics like that too. But in your findings there, you show businesses average more than five major payment disruptions annually, which is so many there.

[00:11:14] And why are the incidents becoming so frequent? I mean, we're talking five now. That figure will probably increase. Why are they becoming so frequent? So as I mentioned earlier, the payment disruptions are not as rare as they used to be for a number of different factors that are really out of the control of the merchant. But there's also some other factors. They found that fewer than 30 percent of Americans carry cash with them. So you go to the store. They're like, you pay with cash. You're just kind of like, I can't even pay a coffee.

[00:11:43] I think I have $20 on me right now, but that's kind of the threshold where people ask. They're like, do you have $20 or do you have more than $20? And a lot of people say no. So what happens then for all of these merchants that only have a cash backup? I believe there's 15 percent of merchants that, you know, their backup is only cash. They don't have another payment backup. If consumers don't have cash, they just got to go somewhere else. Sometimes the merchants ask customers to go outside to an ATM.

[00:12:12] Are you going to do that? Like, not really. I sometimes don't even want to go to the ATM in the back of like the nail salon. It's going to charge me a fee. Is my bank going to reimburse that? I don't know. You know, so at this point, I'm like, OK, not only am I not having a frictionless payment experience, they want me to wait. I got to go to the ATM where it's going to charge me. And I'm probably late for something else I need to do.

[00:12:37] So I feel that, you know, for merchants that don't have this backup, they're kind of just throwing the money away. And some merchants do have the backup, which is great. They have other systems. But that coverage is so uneven. Not all businesses are equally protected. About 56 percent of these that have the backups, they have offline card processing. That's great. That's something FreedomPay offers. 51 percent have mobile based offerings like mobile payments.

[00:13:04] And 44 percent, I found this really interesting, 44 percent of businesses even invest in a secondary Internet connection. Isn't that wild? Yeah, because like it makes sense, right? If you have an Internet outage, often you're kind of out. You can't do anything. They even have a second provider. That is crazy to me. And they do all of this because they're not just losing revenue during these outages, but they're also losing customer trust and loyalty. And that's just huge for their brand visibility.

[00:13:35] Another stat that stands out is 63 percent of outages occur during peak trading hours. What does that timing tell us about how modern payment systems are stressed? In particular, if you look over the holiday season, Black Friday, if a company makes most of their money during that period and they have an outage, it's critical to them. Right. I do think, though, it's not so much about how the systems are being stressed. But I think the businesses are not necessarily investing in up-to-date or best-in-class technology.

[00:14:04] There do exist payment systems with reliable backups, like FreedomPay has an offline mode for just this reason. But some businesses don't want to upgrade their systems and they really need to consider upgrading. FreedomPay did a study with Stripe last year that found that outdated payment technology is a direct cause of lost sales, reduced customer loyalty and significant competitive disadvantage.

[00:14:30] 58 percent of retailers directly attribute lost sales and abandoned carts to their current payment technology. And 59 percent of business leaders believe that that outdated technology puts them at a distinct disadvantage. They are even naming customer dissatisfaction as the single biggest risk to failing to modernize their payment systems. So a single bad checkout experience can lose a customer forever.

[00:14:56] If it's really bad, you don't want to come back to the shop, even though it might not be their fault. It might be the the Internet might be the power. But you've associated this bad checkout experience with this particular shop. You might not come back. So merchants really need resilient payment systems to ensure that this isn't happening, that they're keeping customers. And your research shows, as you said earlier, that customers abandon purchases after seven minutes while outages last far longer than that.

[00:15:24] So where are organizations typically blind during those minutes? What are they doing? Why are they so blind to what's happening? Sure. I don't think they're necessarily blind, actually. I think that they are reacting during this time and trying to figure out what's going on and find a solution. Think about the time that it takes to detect an issue, diagnose what's going on and get a path to resolution for anything. You know, this could be tech. This could be anything. You have to sit down. You got to think what's going on. What do I want to do about it?

[00:15:52] And you might not have the people you need to identify what's going on. And depending on a merchant's available backup options, they may only be able to attempt one or two bouts of troubleshooting before they start to panic, customers start to panic. There's unrest. So they're forced to do something. They either go cash only or just shut down completely. But that's unsustainable. And they're not just losing the revenue here, but the customer loyalty.

[00:16:18] So I think I mentioned this earlier, not having these backups is just like throwing away the revenue and the customers. I will add a link to the research. Anyone listening can check that out. But if listeners remember one thing about this research, about our conversation, what does it tell them about the gap between technical failures and business impact? That's something that will hit them right where it hurts. So what would you tell them there? What would you want them to remember? I think if anyone could take anything away from this, it's that payment outages don't need to be so catastrophic.

[00:16:47] I think they are totally preventable and we can work with them. And there are three things that I want to recommend to businesses. One, upgrade your existing payment technology to the newest, the latest and greatest. Keep that up to date. There's huge security implications in there, too, if you're not upgrading. So that's something they should be thinking about. I think they should be using payment systems that have reliable forms of backup, like those offered by FreedomPay. And I think you need to be using a proactive AI-powered monitoring tool like Dynatrace.

[00:17:17] And payment outages can escalate so quickly, as we've talked about with the seven minutes and then losing 65% of your revenue in those first 23 minutes. That's very quick. So these gaps between consumer expectations and reality are really unacceptable when there are steps businesses can take to anticipate and prevent complete outages. A quick thank you to the sponsor that supports every podcast across the Tech Talks network and every episode.

[00:17:46] And this month, I'm partnering with Alcor. And if you've ever tried to hire engineers in another country, you probably know just how painful it can be. They're going to be different laws, patchy support, and partners who don't truly understand engineering roles. So Alcor approaches this from a different tech point of view. They specialize in Eastern Europe and Latin America, and they're able to combine EOR capabilities with recruiting.

[00:18:12] So you get one partner handling everything, and they help you choose the best location for your stack, find developers with the right depth of experience, and run proper assessments so they can onboard people quickly. And they also give you a model that respects both transparency and margin. Most of your spend goes directly to your engineers, and the fee will decrease as the team expands.

[00:18:36] And you can even transition everyone in-house at that time when you're ready without having to worry about a penalty. And that structure is why a mix of early-stage and unicorn-stage companies use them as they scale. So if you want to take a look, visit alcor.com slash podcast, or tap on the link in the show notes. But now, on with today's show. And we're here at Dynatrace Perform. We're recording this on day one. You've seen the keynotes this morning. You've got a few sessions today.

[00:19:06] You've probably had a few conversations. Just being surrounded by like-minded people. What are the things that, it's probably too early to ask this, but what are you going to be thinking about on the plane ride home? Yeah, we do still have a full day and then tomorrow ahead of us. So I'm sure there are many things I will find them excited about. But I'm already starting to get excited about everything AI. I mentioned this at the beginning of the talk. AI is everywhere. It's in every single room.

[00:19:30] I think anyone who is trying to ignore the advent of AI, they're not going to go very far. In order for businesses and companies to stay ahead, to stay competitive, we all need to be thinking about how AI works. And that's not necessarily like writing our code. Because FreedomPay, working with customer data, we're not using AI to write our code. We are not using AI to touch customer credit card information. We are very secure because that's very important.

[00:19:57] Where we are using AI is tools like Dynatrace Intelligence to help us remediate issues, to help point out this might be the root cause of your issue. Here are some patterns that you might not have seen so fast. So I think companies need to be doing things like that to keep a competitive edge and know that their tools are running properly. Yeah. And I think that one of the reasons that many are still skeptical is the ROI question. But I think that was handled beautifully in the keynotes today by United Airlines.

[00:20:27] Yes. It's only since October. There's real measurable results we're talking about here. We're seeing beyond the hype. And it's not just AI or agentic AI. There's a massive difference being made, isn't there, by this technique? Yeah. What really stood out to me for United is they said after they've been using all of the AI observability and all, they're now number one in departure time, like departing on time. That's wild. Yeah. If anybody asked me what plane who had been number one departing time, I'm like, I don't know, because my plane was late here. We've been dealing with the weather, right?

[00:20:57] This was a very interesting week for weather. And so, you know, for United to have top, you know, departing times, that's great. And I think also what was said on Mainstage is that where teams are trying these, the mix of the agentic AI and the deterministic AI, they're seeing like a 12 times increase in productivity or something. I think that was the stat that they put up there. That's ridiculous. 12 times? Yeah.

[00:21:25] So I'm so excited to see what can FreedomPay do with all this? There's so much that anyone can do with their payment systems. And I think, you know, agent and commerce is coming. We're not there yet, but people are starting to talk about it. So I need to keep an eye field on it. You've left us with a teaser there. It sounds like we're going to have to get you back on later in the year. But before I let you go, for anyone listening, wanting to find out more about your insights here, the work that you're doing, how they can contact you or your team. I'll put a link to the research. Anywhere else you'd like to point, everyone?

[00:21:55] Sure. You can also find more research that we've done, corporate.freedompay.com. We have a section for white papers. You'll find our research on the payment resilience in an uncertain world reports. We've got some other reports in there. We also have a very active LinkedIn. People can follow us there. And if you want to ask specific FreedomPay questions or reach out about something, our marketing team is more than happy to chat. Awesome. Well, I'll add the links to everything you mentioned there. I know you're on stage again shortly.

[00:22:24] So just thank you so much for your time. So I really appreciate you. Thank you so much. I really appreciate you having me. It's been a blast. So when payment systems sit right at the center of customer trust, revenue flow and brand reputation, how prepared are most businesses for that next disruption and inevitable disruption? One of the many things that stood out to me in my conversation with my guest today is just

[00:22:50] how normal outages have become almost a part of daily life and how abnormal expectations still are. Yeah, customers will wait minutes. Yeah, customers will wait minutes. But systems, they can fail for hours. And that mismatch can quietly drain revenue and loyalty long before teams even have time to respond. So this is not just a technology issue alone. It's a business reality.

[00:23:18] And we've heard how resilience is no longer about just reacting faster. It's actually about designing systems that bend instead of break. Offline modes, secondary connections and proactive observability. These are just three things mentioned today that can all play a role. But an even bigger shift is needed here. Mindset. Treating payment failures as inevitable operating conditions rather than just rare disasters.

[00:23:45] Looking at things differently can change how teams invest, plan and also measure their success. So being here at Dynatrace Perform surrounded by engineers and leaders all wrestling with the same questions. It reinforces one thing for me. AI powered observability is moving from hype to habit. And when teams can spot patterns early, isolate root causes faster and act with confidence.

[00:24:13] I think the impact shows up directly in customer experience and business outcomes. So I'll include links to the research we discussed and more information from FreedomPay in the show notes. So why not dig into some of that data yourself? And if this episode made you rethink how resilient your own payment and commerce systems really are, I'd love to hear your perspective.

[00:24:38] So don't wait until your next outage tests your patience on your customers' loyalty. Tell me, what is the one step that you could take today to make sure your system's all ready when it matters most? As always, pop over to techtalksnetwork.com. You'll find a myriad of ways that you can contact me there. But that's it for today. Time for me to get back on that show floor. But thank you for listening as always. And I'll speak with you again tomorrow. Bye for now.