Making the Most of Your Payment Processing | with BirchStreet

The Modern Hotelier #39: Making the Most of Your Payment Processing | with BirchStreet === David Millili: Welcome to the second season of The Modern. Hotelier, the fastest growing hospitality podcast. Both hosts were named Top 100 most Powerful People in Hospitality and voted fourth most popular podcast by the International Hospitality Institute. Each episode will get to know an industry expert and we'll discuss the latest trends in hospitality to help you. The Modern Hotelier. Welcome to The Modern Hotelier. We're coming to you here from the Hockey Hall of Fame in Toronto for Hightech 2023. I'm your host, John Fay: David Mulli. Steve Carran: I'm your co-host Steve Carran, and today we have on John. John, tell us a little bit about where you're John Fay: from, what your role is. That's great. Thanks, Steve. Hi, I'm John Faye and I'm the CEO of Perth Street and really pleased to be here on The Modern Hotelier podcast in his fantastic background at the Hockey Hall of Fame. So John, to kick Steve Carran: things off, John Fay: tell us how you got into hospitality. So my background is over 30 years in financial operating supply chain technology networks. And we'll talk a little bit about Bur Street, but you know, really fascinated by the hospitality and industry and certainly learning a lot. What's your first impression? Well, you know, it's a really dynamic industry. Yeah. And there's so much change happening in hospitality. We've got some great tailwinds. I think, as we all know, in terms of demographics and consumers choices for experiencing things. And Birt Street's a technology company and technology's gonna help us solve that. So I think it's a really dynamic industry and very unique in a way, a structure. It works with a terrific group of people in it. So tell David Millili: us more about Birch Street. Give us kind of the John Fay: elevator pitch. Yeah, sure. It's David. So Birch Street is the largest network in the hospitality industry. Focused on procure to pay. And so what does that mean? Well, it means that for every hotel you walk into, kind of everything that is in your room that you eat right cleaned, is ordered on Burr Street, right? So that, that's the purchasing part of Burr Street. And we cover nine of the top 10 hotel chains globally. And we do all that techno technologically. We have over 400,000 suppliers on our network. And the secret sauce of Bur Street is really connecting the hotel chains and the food service companies. To the, to their suppliers and doing a seamless, integrated, technological way. It's a really awesome product. Steve Carran: And one of the problems Birch Street is helping is kind of on the payment side. Can you talk about how you're helping, you know, your customers with payments? John Fay: Yeah, so payments is is the end of the procure to pay product. So lemme just go through the product lifestyle. Yeah. Really quick. And maybe put it in the context of what a customer thinks about someone who wor someone who works in a hotel in a purchasing department or a food and beverage manager. Or at the front desk or all users of B Street, they log in every day. And so the first thing Bir Street does, it allows our customers to order things. And I just talked about that. And then of course, the next, next most important thing that happens when you order something is that it actually comes. Yes. And B Street has a really top of the line receiving module where people in the operations area say, Hey, that case of champagne, it arrived, and I can deliver it to, to Steve's room. Yeah. If that's what it's supposed to do. And then we kind of go through that cycle into. The next thing is an invoice. So now you've got it. Nothing in life is free. You have to pay for it. And so the invoice is received and processed through Burr Street and we use our technology to do that with no touch. Wow. Right. So what took, you know, hundreds of people to do several years ago and a global company take, you know, takes dozens. And then, so the last part is now you've got the invoice and it's in the Bird Street system. And you can see you ordered it, it was received an invoice. Well, what's next? And that's payment. Right. And it's really critical for our brand customers that their suppliers get paid accurately and on time. Cuz if you don't pay a supplier, they turn you off. Nobody likes to be turned off Steve. Right. And so integrating the payment information into Bur Street makes our customer, makes Bur Street a one-stop shop from a technological perspective and operations to have everything from what was ordered all the way through to what was paid. Wow. And that, that drives efficiency for customers and for hotels. CC the whole life Steve Carran: cycle from beginning That's right. To payment. Yeah. All in one system. That's right. Very John Fay: easy. Yeah. And the really cool thing about Birch Street, you know, if you think about those applications of buying things and receiving things and paying for them, is they're all network based. Yep. And so a network is the exchange of information between two parties. And so whether you're ordering from a supplier, could be a seafood supplier in Toronto, we've got some, you know, great appetizers here at the event tonight. All the way through to, you know, thousands of items ordered from a big wholesaler. Sure. You know, all the, all those, that's a network. But so is payments and the payment side. We're then paying those suppliers, connecting to banks, so lots of third parties and those in seamless integrations between parties. What makes a network great and valuable? You covered some of them, but what do you think David Millili: are some of the biggest problems that you solve? For hotels? Yeah. Outside of the payments, what else are you really John Fay: solving for them? Yeah, I think there's a couple things going on in the industry. So first, bur Street solves some of the problems ar around efficiency. Controls. So that case of champagne that went to Steve's room, right? It's gone. It didn't go home to somebody's house. Right? Yeah. There's a, there's an operational financial control when you're running thousands of properties globally. Yeah. That when something is bought in a small hotel in Australia, that you understand that they're buying it from an approved vendor that's a control that it's actually been received and then you pay for it. Right. So there's a really, a very strong control aspect to Birth Street as well as an efficiency in terms of number of people. But the really valuable stuff in Bir Street that we're beginning to explore with our customers first is information and data. And so, you know, we all talk a lot about chat, G p T and artificial intelligence. Yeah. We're just talking about intelligence. Right? Right. So how do we help our customers make informed decisions about what they're buying, you know, and whether that informed decision is criter criteria based upon whether or not it's e S G compliant. Or it's local, right? So all that information, we have a lot of that data in Bird Street and our, and when I listen to our customers, that's a big problem for them. Yeah. The second thing, bird Street, a big problem for our customers that we're helping solve is looking at that aggregated information and understanding what they're spending globally. And that drives discounts, rebates, lots of great things that makes sense for them, and that's how they make a profit. And then, you know, the kind of the last area is just ESG itself. And, you know, one of our largest brands in the world, customers has a goal of carbon neutral by 2050. So you think about carbon neutral by 2050. It's a massive goal. It touches everything from the way the buildings are built. Right, or the type of fuel use in your buses. Yeah. But for that customer, over 40% of that goal is in purchasing. It's what you're sourcing, whether it's E s G, cleaning products, food Right services. And so I think that's a big problem for the industry. And Birch Tree plays a really unique role in the industry as the neutral platform at the middle of it. So we hear about those opportunities from our customers across them, and we can help build a common solution that'll help 'em solve it. And that's what's really exciting about our network. Great. It's the data, the information, the access to those really strategic customers. Yeah. That's good. That's great. David Millili: One other question I wanna ask you. Your first high tech, what do you think? John Fay: Well, it's exciting. You know, I think it's great that the industry is back in person. Yeah. You know, we're in our second year back and there's nothing like person to person interaction both with customers and vendors and partners. And I think there's a huge amount of energy here this year. Yeah. Agreed. And, you know, the number of displays are just fantastic from technology providers like Bur Street to suppliers, to industry players. And it's just a great opportunity for the industry to get together in a single place. And it is in itself a network. Okay. Yeah. Steve Carran: So John, I gotta ask one thing. Have you done anything fun in Toronto? Well, I'm in a John Fay: hockey hall of fame. Yeah, that's pretty good. That's pretty good start. Yeah. Thank you. To gain and I did get a picture with the Stanley Cup Oh man. Which is fantastic. And I think the best part is actually meeting people. Yeah. And Toronto's an awesome city. Yeah. It's a, you know, beautiful city on the lake and it's nice and sunny outside here. So, yeah. You know, welcome everyone to attend this high tech and others. Well, David Millili: we wish you a successful high tech and many more after this, and we appreciate you being John Fay: here. Yeah, great. Thank you David, and thank you, Steve. Thank you, Steve Carran: John. Thank you. Appreciate it all. Now we have Chris from Birch Street joining us. Chris, why don't you introduce yourself? Kris Herrin: Oh, thanks so much. Thanks for having me. So, I'm Chris Herron. I'm the general manager of Payments at Birch Street. So I worry about our payments busi business and building out a new and innovative payment product. Awesome. So how'd you get into hospitality, Chris? Yeah. You know, so I've been in payments. You know, my background is a little unique. I took a nod route to get here. Let's just say, so I started in technology, so I'm a geek and a nerd. But I don't stare at my shoes, right? So I ended up in management. Okay? So that's how that worked. But one of the weird roles that I ended up in is I started with this company called Heartland Payment Systems. Okay. So this is my first time in payments and I started as their chief security officer. So I was in like cybersecurity. Yeah. Two weeks after I got there, they were hacked and the largest credit card breach ever. And what that did for me as I helped get through that was really learned to appreciate and enjoy. Solving problems for our customers. Right? Like this is a massive problem. This isn't little problems. This is big problems. Yeah. Like how do we solve these big problems that everybody's going through? Yep. Like how do we think big, solve big? And I learned to really enjoy that. And that's how I got into payments. And then I've done B2B payments for a while. Yeah. And then now I'm new to hospitality. Nice. So I'm getting to learn about you guys getting to learn about you know, hotels and casinos and events and it, it's an interesting space for David Millili: sure. Very cool. Definitely. So tell us how Birch Street is handling payments. Give us insight. Kris Herrin: Yeah, no it's a great question. So Bird Street's been the leader in procurement and AP and solving these big problems on the procurement side for 25 years? Yeah, so the payments part for us is very new. And we got into it because we saw that our customers were struggling with payments. They were struggling cuz they had to, they had a relationship with the bank. But then they're having problems with fraud, right? Like so bad guys are trying to steal money from our, the customers. And you know, payments is such a pain, but it's so essential. I call it the last mile, like it's that last mile to get to the supplier. You gotta do it well. But no one wants to do it. Right. Right. Like it's the it's like when you're on the marathon and you want to pass out, like it's that last part that people really struggle to do. Yeah. So we got into that so we could solve those problems for our customers. And that includes like fraud and includes how to bring all the systems together. Lots of really cool problems and payments. David Millili: Well, on that note, how are you helping hotels? Casinos events protect themselves against fraud like that. Like your horrific experience, new job. How are you helping hotels and Kris Herrin: everyone with that. Exactly. So, you know, a lot of our customers that are on pay today, you know, we go to 'em and say, look, you need to make a payment to the supplier. Right. We are experts in payments. A and we're experts in procurement B and we're experts in hospitality. Right. That's all we do is hospitality. Yeah. So we say to 'em, look, I, you need to make payments. And those could be virtual cards. They could be ach, they could be checks. You wanna make those payments safely and securely, and you want all that data to come back in so that you're the operators that are running the properties. And the finance team Right. Can all see it in one place. Yeah. And the operators aren't calling finance going, what's going on? Right, right. So they want it all together. So we built a solution that said, we'll take care of the enrollment. We'll do all the fraud screening, we'll deliver the money to the supplier. We'll deliver the data to the supplier. Yeah. Because it's not just about the money. You gotta tell the supplier what they're getting paid for. Yeah. Like, think about it, right? If I, if you send a thousand dollars to the supplier and don't tell 'em why they're getting it. Yeah. It doesn't get applied to your bill. Right? Right. And your electricity gets turned off. Right. So we gotta solve that. But, you know, I ask customers all the time, why do you need to do that? Like, is it core to your business? Is it gonna differentiate you that you do payments better than anyone else? And the answer is no. No. It's, they need to get it done safely and securely with visibility. Right. So what Steve Carran: other problems besides fraud are you helping hotels with? Kris Herrin: Yeah, the fraud part's huge. So they, our customers don't have to do the enrollments. Managing the day to day of payments, all turnkey, managing those checks, getting it all back into one system is huge. So a lot of our customers today might have a banking partner. But you're gonna then have half of your business in Birch Street managing your day-to-day procurement, and then you've got your finance team and the banking stuff and two different systems. So how do we bring that together? How do we tie that together? Right. But the last part, the unique part about payments is a different business model. It is fundamentally different using different types of payments and different kinds of services. To suppliers, we create another revenue stream. The suppliers pay for this not right, the hotel. Sure. And we share that revenue back to the supply, to the hotel. So now think about this. We've got 18 customers, large customers on Bir Street Pay today. And for most of those customers, the rebate that we can generate from pay. Offsets most of what they pay for BRK Street. Sure. You can get BRK Street for free by using electronic payments. Right. And it's like, it's this mind blowing concept. We go to customers and we're like, let us do your payments for you, and you can get the software almost for free. Like it's. I've had people say, well, that's the easiest sales pitch ever. Right? Yeah. And the problem with the challenge is working with customers to help them understand how that works, right? Like it's, you know, helping them understand, yeah, this is real, this is, this happens. This is how payments work. We can help change your business model. David Millili: So you touched on it that you're helping suppliers with payments also. Yeah. But, so maybe take us through some of the problems that you're actually solving for them. You touched on it a little bit, but go a little deeper on that, please. Kris Herrin: Yeah. So you mentioned suppliers. That's a great question. So w we're building a network. We're solving hotel problems, hotel management problems, casino management problems. We're solving those. Payer problems where they just need to get payments out the door quickly and efficiently. And we're solving those and making all that show up inside of Bird Street. Visibility tied to the po, the invoice, everything else. But to make it work, you gotta have the other side. You gotta have the supplier, you gotta have the supplier network. So now we have to solve problems for the suppliers. And those problems are, if you think about the suppliers, they're getting paid all day every day. They have an accounts receivable problem. Yeah. Like how do you make their payments easier? Right. Seamless. And what we've learned is, and working with suppliers is it is not one solution fits all. It is a supplier might have. So if you think about our customers, You take a large supplier, national supplier, their relationship with my customers is all unique. That's a unique relationship. They may have some high volume hotels that are paying them and hotel management companies, and so they have a unique national, they have a national account, they have their own paper, they have their own agreement on how they're gonna get paid. It's all spelled out. Yep. Then you've got a property that pays them twice a year. Right. So the supplier doesn't want to go through this setup for this one property that only pays 'em twice a year. Yeah, sure. Yeah. So how do you facilitate that payment? Which you just want quick, easy done without a bunch of setup. Yeah. Versus how do you do the, when they're getting paid a thousand times a month from a large management company. So we work with the suppliers to how do they want their money? How do they want their data? And how can I help them see what's going on with the payment, what's going on with the invoice? Sure. Like, so they can go in. So when they're trying to figure out, cuz there's some account receivable person, there's some clerk on the supplier side that's doing their job every day trying to get payments in, trying to apply them to like, and they're working through issues. They're working through problems. We wanna help them make their job easier. And the more I can make their job easier and the more I can make our payer and our hotels and job easier. Right. That's the network we're building. Okay. David Millili: Awesome. So I'm assuming this is your first high tech? Yes. Kris Herrin: Second. Second high. Yeah. Yeah. I've been on virtual for a year now. David Millili: Yep. Great. So what, how do you feel, how do you like Toronto? How do you like the event so far? Kris Herrin: You, you can't beat where we're at. You can't beat the Stanley Cup behind us. Yeah. My wife and I are huge Stars fans. Okay. Dallas Stars. Very cool. You know, a proper you know, real hockey team. And she's very upset and jealous that she's not here. So We'll Photoshop, David Millili: picture something like that. Kris Herrin: So Love it. Yeah. High Tech's been great. It's a great place for us to see our customers, our prospects. Partners and have a space where we can meet with everyone. Yep. We can chat with brilliant folks like you guys, you know. Thank you. And it's just a great environment, great vibe. Okay, great. What's your Steve Carran: favorite thing you've done in Toronto so far besides the hockey Hall of fame? I don't Kris Herrin: know that, so I got it. I got in at midnight last night, so right now it's Hockey Hall of Fame. There you're the winner right now. David Millili: All right, good. So tell us how folks who are listening can either. Connect with you. Find Burt Street. We've already got the website. Yeah. People want to connect with you and reach out and find more. How can they do that? Yeah, Kris Herrin: so bree systems.com. Okay. So it's bree systems.com. Okay. So you can Google Birt Street. Birt Street Pay. Okay. It'll come up. You know what? So especially on the pay side, we'll work with our customers and we do this really cool thing where we sit down with them and do compare them. We do an industry analysis. Right. So we'll take them and their properties, we'll compare them cuz again, all I do is hospitality. Yep. So I have a thousand properties under contract. All I do is manage hospitality. So I'll take their properties, compare them to others, and I'll say, look, based on this I can tell you exactly how much is gonna go electronic. Yeah. Virtual card, ACH, h e ft. Check, here's how your payments are gonna go. Here's the kinda rebate we're gonna generate for you. Yep. And here's how others have done this integration. Yep. And here's how we've solved these problems for others. So we give them a report, it builds the business case. Got it. Like it's what you give the C F O and say, okay, done. Like here's what we need. Yeah. So we'll do that. We'll build that report for free. Love for folks to come ask and we'll help 'em solve those problems. Great. David Millili: Well, thank you so much. That does it for the first episode of The Modern Hotelier from the Hockey Hall of Fame. Amazing. Maybe not the last John Fay: Yeah. But I, thanks. Do this every year. We, David Millili: we really enjoyed having you and enjoyed the rest of high tech and enjoy the rest of your evening. Kris Herrin: Absolutely. Thanks so much, guys. Appreciate your time. Thanks. John Fay: Cool. Thank you. Steve Carran: You made it to the end of The Modern Hotelier. Thanks for listening. The Modern Hotelier is produced by Make More Media. Make sure to like and subscribe if you're watching on YouTube or follow wherever you get your podcast. If you know of a guest or sponsor that would be a good fit. Feel free to email us at hello at The Modern Hotelier dot com. Thanks and have a great day.