Forming partnerships can be beneficial for FinTech entrepreneurs and startups, according to Brian Deck, CEO at Toronto-based Smooth Commerce.
At the latest FinTechTO, Deck discussed the importance of forming partnerships in FinTech. He also shared how he has best-leveraged partnerships at Smooth Commerce, a mobile payment and marketing platform for retailers.
Deck kicked off his presentation by explaining what Smooth Commerce does. He said the company makes mobile apps that allow retailers’ customers to pay, collect loyalty rewards, and redeem discounts in a single platform.
“When you do establish a partnership, it’s critical that you invest in it.”
Deck added that Smooth Commerce has been able to deliver its payments and loyalty solutions by forming partnerships with larger financial institutions and companies like PayPal, Telus, Moneris, and TD Canada Trust.
“We’re using, in some cases, partnerships, and in some cases our own intellectual property,” said Deck. “But when we look at partnerships, we’re not just looking at partnerships from the perspective of technology integration. We’re looking at partnerships for that and more. So things like helping us sell more products [through] sales channel partnerships, companies that are helping get our brand out there in a marketing partnership, or partners that are helping with product innovations.”
When it comes to the initial stages of partnering with other companies, Deck said the first question founders should ask themselves is “Why should we partner?”
To help answer that question, Deck pointed out four reasons Smooth Commerce considers partnerships: revenue, reputation, extension, and innovation.
“The first and arguably most important [reason] is to help us with revenue. So if we can actually find companies that are motivated and empowered to do a better job with their clientele by selling our product, that’s good for us,” said Deck. “We’re also looking at companies that can help us with getting our brand, credibility, and marketplace, so helping us with our revenue. Companies that can help us with extending our products with their products in ways that we couldn’t do without them and also companies that are innovators…who like to build and who collaborate on technology.”
“The challenge there is how do you avoid getting left behind? How do you avoid getting squashed, or even worse, how do you avoid getting taken advantage of?”
During the presentation, Deck also gave examples of Smooth Commerce’s existing partnerships with companies like Moneris, which helps the company with sales and marketing; and PayPal, which markets Smooth Commerce as an app that PayPal’s customers can use to pay. Another partnership Smooth Commerce formed in January was with Visa’s Register with Visa program, which allows SmoothPay users to streamline the process of signing up for mobile apps using their Visa checkout profile and contact information.
“The [partnerships]…I brought to your attention have a combined market cap of over $300 billion and we are an early stage company. So the challenge there is how do you avoid getting left behind? How do you avoid getting squashed, or even worse, how do you avoid getting taken advantage of?” said Deck.
For FinTech companies that want to build partnerships in the future, Deck stressed the importance of establishing your credibility upfront and consistently telling existing and future partners about the successes your company has had. He also noted the importance of truly committing and investing in the partnerships your company forms.
“When you do establish a partnership, it’s critical that you invest in it because it’s important to you, if you’re the smaller company than for the bigger company. So really investing and committing and showing that you’re on top of things is critical,” said Deck.
Watch the full presentation below:
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