AFT Podcast recording - 2026/02/13 10:30 PST - Transcript

Attendees

Johnny Moreland, Konstantin Dubovitskiy

Transcript

Konstantin Dubovitskiy: And today as a guest speaker, we have Joy Morland, the chief revenue officer of Move Financial. And this is the first episode of the series of nine or actually 10 potentially episodes ing Move, but specifically covering the tech behind the move, talking about what does it mean to be connected directly to the Fed or the clearing house. How does that structure look How do the MTLS factor into all of this? what does it look like to be connected directly to Visa or Mastercard or AMX? so we're going to cover a lot of subjects in the future episodes. Today we're going to talk about moving in broad terms cover how we're different from Fiser FIS big core processors and what does it mean to be a or us a payment service provider versus a general gateway and…

Konstantin Dubovitskiy: how does that structure look like? So Johnny, let's kick it off easy. Tell us a little bit about yourself and well about move.

Johnny Moreland: Thanks, Constantine.

Johnny Moreland: Johnny Morlin. I've been doing this for a long time. 30-year payment vet. I've been with Moog since June of last year, so going on about eight months now. prior to that I headed up the US team for a German treasury services company called TIS and then prior to that I was with FIS for 16 years. and done a little bit of everything, managed data centers and products and both retail and commercial payables for FIS. So been around for a minute.

Konstantin Dubovitskiy: That's why we're kicking off with you.

Johnny Moreland: Here we go.

Konstantin Dubovitskiy: The heavyweights go first and then the engineers will kick in later. so let's start off with the definition of What is it doing?

Johnny Moreland: So I move as a network of networks processor. So we are directly connected into Visa, Mastercard, American Express for directly connected in the Fed for AC and now directly connected into the clearing house for RTP and then also for Visa and Mastercard powering their AFT and OCT transactions. Visa direct and Mastercard send but we offer a service that is a processor for those payment methods.

Konstantin Dubovitskiy: delightful. And people who are listening to this, I'm sure you see why I'm excited to get into the actual technical details of all this. So, let's talk about,…

Konstantin Dubovitskiy: move versus the others. specifically processor service provider versus gateway. We'll start there.

Johnny Moreland: …

Konstantin Dubovitskiy: Definition. Mhm.

Johnny Moreland: by definition they're all pretty different, So, a processor typically is a tech technical service provider that is powering somebody else to be the PSP or the payment service provider.

Johnny Moreland: So this is the old school examples of first data and world pay and FIS TESUS right so these are providers that are providing the direct network connectivity and then a PSP or payment service provider will sit on top of those processors and…

Konstantin Dubovitskiy: Beautiful.

Johnny Moreland: add opportunities of whether it's ERP integrations or a point of sale device integration or the online checkout experience, So, typically they're kind of in different categories because each of is providing a different service. But when you're talking about payments, legacy architecture kind of sits these on top of each other as nesting dolls, So, you have a PSP that might sit on top of a gateway that sits on top of a processor that then sets the connectivity to the network.

Johnny Moreland: So in that old school definition that's the difference between those things move differentiates ourselves because we are the PSP and…

Johnny Moreland: the processor in one. So we provide the merchant accounts the mid issuance but then we also provide the connectivity directly to the network using an abstraction API layer on top of it.

Konstantin Dubovitskiy: …

Konstantin Dubovitskiy: obstruction API layer,…

Konstantin Dubovitskiy: what is that? let's start there. A similar term.

Johnny Moreland: That is…

Johnny Moreland: what a company or merchant would interact with to acquire transactions or accept payments that then would be routed to the network.

Johnny Moreland: So, MO where move brings in the ISO messaging that's going to the network to actually process the transaction that's not directly exposed upstream to the merchant.

Konstantin Dubovitskiy: Mhm.

Johnny Moreland: They would interact with an API layer that Move has built that then gets translated into that network messaging that goes to the network.

00:05:00

Konstantin Dubovitskiy: 

Konstantin Dubovitskiy: In that case back to the previous question which is proer payment service provider and…

Johnny Moreland: Yeah, it could.

Konstantin Dubovitskiy: payment service provider could be a gateway correct or is it okay it cannot really be okay it could be a proer…

Johnny Moreland: That's right. Right.

Konstantin Dubovitskiy: but it's rare okay Mhm.

Johnny Moreland: So typically what happens is payment they're going to build out the abstraction layer and the translation to that that then would go onto the processor and then the processor takes that message down to the network. so that's typically the way that it sits.

Konstantin Dubovitskiy: Mhm. Yeah.

Johnny Moreland: So just in terms if you think about it today like Stripe PayPal addin they're categorized as a payment service provider. they're built on top of another processor processing at least within the US, I know Addy and Stripe may do different things differently in and EMIA APAC regions, but particularly in the US,

Johnny Moreland: Stripe is running off of a first data from a processor perspective.

Konstantin Dubovitskiy: That's crazy.

Konstantin Dubovitskiy: So, just to clarify here, move is three in one. Even Stripe does not have the direct connectivity to Visa,…

Johnny Moreland: That's right.

Konstantin Dubovitskiy: Mastercard, Amex,…

Konstantin Dubovitskiy: Discover, right?

Johnny Moreland: Yep. Yeah.

Konstantin Dubovitskiy: Delightful. That's a good differentiator right there. In that case, let's move on to the legalities of it. Briefly touch onto that because it does get boring. we're not going to talk about it too much but can you briefly cover what is the implication of being the actual processor? it seems like we touch a lot of data which some people don't want to touch. So what happens with that? what are some things that we

Johnny Moreland: So, our main governance is really the network rules, and I say not just card network rules, but also we're processing on Nacha network. We're processing on the clearing house. we're subject to making sure that we follow and everybody that we process payments for follows the network rules that we're running those transactions over.

Johnny Moreland: So as an example, we have to verify that the account numbers that we're processing transactions through have been verified and are owned by the people that we're transacting for and on behalf of.

Johnny Moreland: Obviously Visa and Mastercard, they have operating regulations. We have to follow all of those rules. Making sure that we are processing under the right MCC codes that we're using the right types, all of the things that would go into actual processing transactions, but we're the ones that are held accountable for that. Then we also have PCI compliance, right? So, if we're going to Yeah,…

Konstantin Dubovitskiy: the standards. Yeah. No,…

Johnny Moreland: we have all the PCI DSS compliance standards that are there. we also have NPI for non-public information.

Johnny Moreland: I'm gonna assume that our audience is going to be familiar with the acronym soup that gets thrown out in payments.

Konstantin Dubovitskiy: no, they won't be. Some of them will be, but NPI personally I was not aware of what it is.

Johnny Moreland: So, non-public information, So, we're collecting a bunch of information to your point, Constantine, that's very sensitive. So we have to make sure that we're sock compliant that our systems are guarded and…

Johnny Moreland: and to protect that data and that's our obligation. that goes to the data protection laws. and then also because we're a processor we're operating under a sponsorship of a licensed bank. we have the regulations of that bank.

Konstantin Dubovitskiy: Mhm. Yep.

Johnny Moreland: So in our case, we have a multitude of banks that are sponsors for different networks that we have within our ecosystem. And each one of those has their own set of rules like our prohibited and…

Johnny Moreland: restricted list come from our sponsor banks. the way that we are setting up our ledger and pushing that ledger and reporting back into our sponsor banks for reconciliation purposes. All of those things are really the compliance and regulatory oversight of our sponsor bank.

Konstantin Dubovitskiy: makes a lot of sense. And in the future we'll touch briefly about connecting to the metal and going still through the bank there are a lot of questions around how that's structured not today just peing some interest in the future episodes that are coming up in the series. All right. let's talk about you mentioned we're responsible for example for making sure that the MCC codes are correct.

Konstantin Dubovitskiy: We get that from the merchants. Do we do it manually? Do we just randomly check a few merchants here and there? what happens there? Mhm.

Johnny Moreland: No, for us,…

Johnny Moreland: we've built it into our onboarding process. So, when we're going through and onboarding a merchant, and this is kind of where we get into the kind of the PSP space, So, as a payment service provider, we're offering that merchant onboarding experience. we're collecting industry data. what industry type Are they commercial? Are they online merchant marketplace, right? different categories that then map into our system for an MCC code.

00:10:00

Johnny Moreland: Then so there's a number of different maps that we have from Visa and…

Johnny Moreland: Mastercard and others that we map into the correct MCC code.

Konstantin Dubovitskiy: Mhm. But it's still on the merion to provide correct information,…

Konstantin Dubovitskiy: right? doesn't move through any checks of that double ver.

Johnny Moreland: It is yeah.

Konstantin Dubovitskiy: Okay. Mhm.

Johnny Moreland: Yeah. Yeah. So when that stuff comes into our system our onboarding experience then runs through a series of checks. we're utilizing socure and midesk and Lexus Nexus on those checks for validating the business information and we have our own kind of proprietary information that we're going up against and looking through that. But then ultimately, Matt and our compliance team is going through and just validating the businesses who they say they are.

Konstantin Dubovitskiy: Makes sense. And obviously we're not going to talk about how exactly we do it because we won't. Let's talk about the comparison with bigger guys like FIS Jack Henry.

Konstantin Dubovitskiy: We'll start with FIS since you've been there. What's the main difference between Move and Fis? Mhm.

Johnny Moreland: There's not a lot to be honest with you.

Johnny Moreland: From a processor standpoint, FIS and Move would be u kind of considered synonymous in that right. So the biggest difference I think is on the tech side. So, FIS's systems they're 40-y old technology built on mainframes and AS400s and, that's their connectivity layer that goes out to the networks. those systems they have endto-day job runs that kind of pull them offline or they go into a store forward fast process whereas ours are real time up 100% of the time because we're built on the latest technology that really doesn't sleep.

Johnny Moreland: So those are the kind of the key differences, but from a processor definition perspective, we're very much the same. Yep. No,…

Konstantin Dubovitskiy: Okay, let's talk about the pros perspective specifically a specific example of AC trail.

Konstantin Dubovitskiy: They also have direct connectivity to the feds and the clearing house for each clearing. do they also run it through a bank of their own? Do they have a sponsor bank or do they have MTLS and they just bypass the banks altogether?

Johnny Moreland: they operate through a bank. So most of the time in FIS's instance, so there's two models there. there's a correspondent bank model

Johnny Moreland: where they may operate for some of the smaller banks and credit unions that don't have a kind of a direct Fed account.

Johnny Moreland: they'll operate through a correspondent banking relationship. and they do have sponsor banks. they've got some really big sponsor banks. and then in other cases, their tech is used by the bank for the bank to offer their services into that space.

Konstantin Dubovitskiy: and the bank is processing the files themselves.

Johnny Moreland: The bank that's right, the bank is processing the files themselves on behalf of the customers that they're leveraging.

Konstantin Dubovitskiy: delightful. So there is no physical way for someone to bypass the bank in any way,…

Konstantin Dubovitskiy: shape, or form. they don't have MTLC. They still have to go through the bank. we're US focused only.

Johnny Moreland: Yeah, if they have…

Johnny Moreland: if they have MTLS and they're registered money transmitter and they have the wherewithal to kind of get that directly connected in, they still have to be sponsored into the network from bank perspective in the US. It's different in anemia, but we're going to talk about

Konstantin Dubovitskiy: I think what about 97ish% of our listeners are based for a good reason.

Johnny Moreland: All right. Maybe

Konstantin Dubovitskiy: So, we'll talk US only. I had a different question in mind and I forgot bank nsor about that. Lagging on it. what? MTLS. it was MTLS. There was a recent conversation I had literally just yesterday with moves team about what is the actual benefit of MTLS because I don't see any honestly their mom is trying to get MTLS especially with the bigger organizations…

Konstantin Dubovitskiy: what's the actual point of having MTLS for example someone comes to move they say hey we have MTLS what can you do with them what can you do with a customer who has MTLS Mhm.

00:15:00

Johnny Moreland: Yeah, the only difference really from a and…

Johnny Moreland: and this is a question that we've debated. the benefit of MTLS or a limited federal c bank charter that op operates as a payments charter for us to be able to do different things. the only benefit that it does is it gives you company a little bit more freedom to decide which use cases that you want to support, but you still have to have the approval and support of the sponsor bank.

Johnny Moreland: But they're going to look at it and say, "Okay, with MTLS, you now have more governance upon you as a company." So MTLS are issued at a state level. So now you're basically opening up governance and audit rights to the states that you're operating those MTLS under. And it gives the banks a little bit more comfort that you're going to be doing the right things.

Johnny Moreland: In MOO's case, we're pretty flexible on what programs that we can offer and do through our sponsor banks. the only caveat to that would be with MTLS, it does open up access to being able to custodian funds for consumers.

Johnny Moreland: But with custodian funds with consumers doesn't just require the MTL component but it also requires again additional scrutiny for reggg e compliance and understanding of what all that brings to bear when you're talking about servicing a consumer directly.

Konstantin Dubovitskiy: Mhm. Yes.

Konstantin Dubovitskiy: And that's a whole different thing to look into. And if people are curious about reggie and…

Johnny Moreland: Yes. It's a big for sure.

Konstantin Dubovitskiy: how it actually works, check out the most recent episode. is literally about anti-moneyaundering policies and so on from the CEO of straddle. So check it out because I was personally not aware of what reggi really is and what are the implications. Long story short, it's kind of horrible. So if you can't avoid consumers, please do All right. It is very interesting that there is honestly not much of a benefit with MTLS outside of being able to run a consumer program and potentially making some interest on the deposits that your customers have. That is insane. in that case let's move on to last two questions. Number one is going to be what's your overall take on the financial industry?

Konstantin Dubovitskiy: That one's random out of the blue take on the financial industry in a sense of people who are listening to us are financial institutions they are predominantly actually fintex where half of them are what's your advice to them what when they're evaluating a payment processor gateway someone… who is going to be processing their payments Perfect.

Konstantin Dubovitskiy: 

Johnny Moreland: Yeah, I actually got this question earlier today from a customer that was asking about just my opinion on different things.

Johnny Moreland: But part of what I'm excited about is to see what I consider is kind of this next evolution of consumer and business engagement when it comes to money movement and banking services as a whole. I have been a 30-year career in providing technology to community banks to be able to service clients and hit the needs that they want to get to.

Johnny Moreland: I still believe there's a huge benefit for banks and credit unions and the relationships that they build with customers that go beyond just the money movement facets, but understanding what they can do to service them. But there is a collision of doing banking things where you do life, So I've been a part of the first internet banking sites that came up that moved banking from brick and…

Konstantin Dubovitskiy: Mhm.

Johnny Moreland: mortar into a technology of a computer but you could only do that at home and then we had enough advancement in the phone technology to be able to put it in a mobile space but you had screen size restrictions and things like that that pro proved to be challenging but now you've got I don't know Starbucks the amount of money that sits

Johnny Moreland: in the Starbucks app would make them a top 20 bank in the country. and all of the various kind of wallet applications that are out there, it's pretty obvious that consumers want to be able to do things like that where they do life, where they have loyalty, where they're spending their money. And I want to be part of the tech tech stack that's going to be able to bridge that gap for a bank to service customers. that I look at what we did with Jack Henry and their tap to local as a great example, right? A lot of these small businesses, they don't have any other options on doing card acquiring or accepting transactions.

00:20:00

Johnny Moreland: We've been able to partner with Jack Henry to get something out there through the bank that allows them to accept credit card transactions from their online banking app that has their bank branding on it. and I think that's something that we just haven't seen in the market. typically, that's where Stripe has won, right? Stripe went after that particular market.

Johnny Moreland: But it's disintermediating those small businesses away from their banks and now Stripe's offering cards. Stripe's offering it is it's become a Trojan horse. And I'm excited to be part of the solution that allows banks to be able to compete banks and credit unions to compete against those type of things because I think that's where the relationship really thrives.

Konstantin Dubovitskiy: Yes. Yeah.

Konstantin Dubovitskiy: That's true. And people listening to this, if you are curious about

Konstantin Dubovitskiy: few accounts how that whole system looks like. It is actually coming up in the series on episode number six and…

Konstantin Dubovitskiy: Two episodes dedicated to the subject because ledgering is just so much fun. But with that being said, let's move on to the very last question of today and it's a standard wrap-up question. If there is one thing in payment space that you can teach the entire world about, can you beam that dot into the brains of eight billion people, what would it be? And it has to be about payments.

Johnny Moreland: H compliance.

Johnny Moreland: So it can't be an afterthought, it has to be the forethought. I think that's again what separates us from the rest of the space. We look at our onboarding process.

Johnny Moreland: We look at kind of the merchant experience from the lens of compliance and…

Johnny Moreland: regulatory first, but then we build really beautiful things around that process to help on board. it can't be an afterthought.

Konstantin Dubovitskiy: That is true.

Konstantin Dubovitskiy: On boarding links are very cool. 100% agreed. And yeah, I mean if you've been in a space for more than I half a year, maybe a year, you already have seen FinTech failing because of compliance issues. so it certainly cannot be an afterthought. That's where we'll wrap up. As always, my call to action is check out the description of this episode. Johnny's LinkedIn in there. I'm going to link Move and I'm you related to compliance stuff.

Konstantin Dubovitskiy: I'm going to link the docs of move on how to onboard merchants compliantly and without a paying for merchants. And at that point, as always, have a great day and I'll see you in the next episodes.

Johnny Moreland: Thanks, Constantine.

Johnny Moreland: Have a good day.

Konstantin Dubovitskiy: All right, let me

Meeting ended after 00:23:08 👋

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