Eric Remer is the founder and CEO of PaySimple, a leading provider of small business merchant accounts, mobile and electronic payments, and ACH processing services. He also founded Conclave Group, a direct marketing services company, and cofounded I-Behavior, a leading behavioral targeting and database marketing organization. He began his career in the investment banking field, with Kidder, Peabody & Company.
In this video segment, Remer describes the platforms and ecosystems in use for money transfer, how they're evolving with each generation, and what he sees ahead for current giants such as MasterCard (NYSE: MA ) , Intuit (NASDAQ: INTU ) , and eBay (NASDAQ: EBAY ) .
A full transcript follows the video.
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Tom Gardner: Last question. What do you see happening in the world of payments? I remember reading an article recently where the assertion was people don't change their payment habits after the age of 35.
Eric Remer: Interesting.
Gardner: I may be making that age up, but it's somewhere in that range. What is the revolution that's happening right now and why is PaySimple playing right into it?
Remer: I think you nailed it. I think it's the next generation. What are they going to be doing? I think PayPal is a great platform and a great company. Someone said to me once, "I agree, in our space, but my 17-year-old never heard of PayPal."
If the next-generational companies will be able to create the platforms to allow money to be transferred, ecosystems -- peer-to-peer as well as peer-to-merchant -- in the most frictionless way, there is an opportunity to change that you and I don't pull our credit cards out. Which, by the way, there's not that much friction in that. It's not that bad. But the next generation who hasn't done that yet ...
Gardner: There's a lot of...
Remer: Oh, huge opportunity to change. But it will take time. You asked about MasterCard. It will take time to potentially replace the ecosystems that exist and how are those leading organizations -- the MasterCards, the Visas (NYSE: V ) , the American Express (NYSE: AXP ) , the PayPals -- going to come down to the next generation and give them the reason why they should utilize that same payment system.
Gardner: We're going to play a little game to close. I'm going to give you five public companies in your space. You rank them in terms of what you think their prospects are for investors over the long term. I'm putting you on the spot. You don't have to play my silly game if you don't want to, but here we are: American Express, MasterCard, Visa, Intuit, eBay.
Remer: That's a great one. eBay 1, Intuit 2, American Express 3, Visa/MasterCard kind of tie 4, 5.
Gardner: And why?
Remer: I think PayPal, the greatest thing they have is a connection between consumers and merchants, and they've been able to create that large ecosystem that allows people to move money in the most frictionless way within their ecosystem. I think the partnership with Discover and some of the things they're doing to bring that online, offline are brilliant.
I think Intuit -- different scale. They're not going to maybe have the same type of large ecosystems that the PayPal or even the Visa/MasterCards would have. They've nailed the small business, and there's been people coming after them left and right, but I think their value proposition and their commitment to continue to provide that is second to none and I think they'll maintain their space in an ever-growing marketplace.
Gardner: And you think Visa and MasterCard are fighting defensive battles?
Remer: I think they are, and I think American Express could have a more difficult time with them or an easier time. They have a closed ecosystem in terms of their payments, which gives them an advantage and a disadvantage. It's easier to cut American Express out of the ecosystem than Visa/MasterCard, but they have huge brand loyalty which I don't think Visa/MasterCard have. I don't care if I pull out a Visa or a MasterCard, but I always use my American Express card.
Gardner: Awesome. That's a little bit about PaySimple and the world of payments and the new technologies and new innovations. So, Eric, thanks very much. Right on.
Remer: It was really great. Thank you for having me.