This was the best question we’d gotten in a while, so definitely worth an article.
The inquirer notices that we beat up on certain companies in the space quite frequently and was both curious why we beat them up, and what changes they could make to elicit more positive coverage.
In a nut shell, we’re really simple people.
All you gotta do avoid getting reamed on this blog is…
Don’t be a turd.
Yep.
That’s it.
Sounds so basic, yet the companies we’ll talk about are – at least by our standards – behaving poorly.
Here’s a case-by-case teardown.
Global Payments
These guys made it on our radar after acquiring Heartland, who in turn acquired a number of POS assets. Global Payments is run by perhaps the penultimate payments bro in Jeff Sloan, whose sole purpose in life is to make the quarter regardless of who gets hurt.
The guy has built an entire machine around adding bogus fees to their hapless customers.
Even worse, he buy software companies, erodes the R&D spend, and then rapes their customers with his payments.
Rapes.
That’s a strong word, so we don’t use it lightly.
Jeff has Global on a treadmill of software acquisitions, attaching payments, running the assets into the ground, and doing it all over again.
This won’t last forever.
Software companies, who are accreting all the new payments volume, are becoming payfacs, and in a few years the software companies will write directly to the card networks and avoid the legacy disasters that are today’s processors.
So Jeff will fold Global into FIS or Fiserv.
Eventually.
He has no other option long term: he’s sitting on a sinking ship.
What would Global need to do to make it off our naughty list?
First, they’d need to fire everyone in the c-suite.
Everyone.
Then they’d have to bring in people who have actually built shit before.
It’s easy to M&A.
It’s hard to build and create new products/industries.
Two very different types of people.
Then they’d have to start investing in R&D, and open up their ecosystems to third party partner.
Then – and we know this is a HUGE ask – they’d have to STOP ADDING BULLSHIT FEES on their customers.
NCR
We don’t know how anyone can save NCR. Aside from having the industry’s worst product, worst strategy, and worst culture, they actually expect everyone to treat them as if none of this is true!
It boggles the mind.
NCR is rotten to the core.
NCR would need to fire pretty much everyone, invest in R&D, and open up.
Then there would need to be a major apology tour to their customers and partners, atoning for past wrongs.
And there are a lot of them.
The tour would last so long that the new leadership would grow tired of apologizing and they’d leave the company. (And ironically an NCR with no leadership would be better than today’s NCR).
NCR is beyond salvage.
Truly.
We are at a loss of words for what they can do here.
Shift4
This one has us a bit crestfallen because they appeared to be doing the right things up until they went public, but then the clothes came off the emperor.
Shift4 has shown itself to be a Global Payments mini.
And it pains us to write that.
Run by founders, seemingly investing in R&D, and saying the right things to their partners.
But it’s fallen flat.
The reseller channel is less than excited about Shift4 now that they have a few years of Shift4 ownership under their belts.
Shift4 invests a paltry $10M in R&D.
Dude.
Toast is investing $160M in R&D.
How do you honesty expect to compete?
Maybe Shift4 has given up and realizes it will catch the farmer’s market merchants that Square is outgrowing, but there’s no way Shift4 is going to produce anything competitive with how they’re currently organized.
We think Shift4 needs new management that aren’t related to the CEO.
People who don’t come from payments and instead have software backgrounds.
Shift4 has also become fairly closed as it relates to integration partners and general corp dev strategy.
Crazy observation: if you’re only putting in a meager $10M in R&D, you need ALL THE PARTNERSHIPS you can get to stay relevant.
We suspect, like Global, Shift4 gets gobbled by a larger player for the payments volume.
Shift4 has some great people, and is at least willing to engage, but they’re settling into the payments bro playbook of underinvestment and fake fees.
Toast
Toast has a lot of things going for it.
Strong R&D.
Good execution.
Pillaging their customers.
Whoops!
There are only two changes Toast would need to make.
First, they should tell every single customer and potential customer how much their “free POS” is actually going to cost them so its an eyes wide open transaction.
Okay, so if you want this hardware discounted, we’re going to increase your payments, and our loan to do so comes with an effective APR of 70%, which by your state’s definition is usury. If you’re okay with this, then sign here.
Proposed Toast sales script
Second, they need to not screw their partners. We’ve heard some real horror stories, and it’s because Toast has zero moral compass.
Zero.
How else do you explain a company that triples their payments margin on their customers WHO ARE LITERALLY DYING (both from a business perspective and literally, dying) during a global pandemic?
This behavior comes from the founders and CEO, who set the tone.
Toast is greedy, wants to own the world, and has zero qualms about killing your mom.
None.
Would probably even sleep better after pulling the knife out of her back.
So, like Global and NCR, they’d likely need to fire the founders, which will never happen.
Instead the founders will walk themselves out after totally vesting.
Because honestly, who wants to deal with SMBs for their whole lives?
It’s a punishing experience.
And maybe that’s how all of the aforementioned violators justify their behavior.
But just because you don’t like your customers doesn’t mean you should screw everyone you touch.
And we’ll be here to shine a light on the behavior as long as it happens.