Show Me the Money! Matt Gurley Shares Lynnbrook's Approach to Payments, Profits, & Fraud Prevention

Alex Husner  
But not got the same background as Steve Karen when he came on the show, I didn't

Annie Holcombe  
even remember that. I was like, it looked familiar, yeah.

Matt Gurley  
First of a joint marketing team. They give us all these little J thanks. It's nice. Love

Alex Husner  
Welcome to Alex & Annie: The Real Women of Vacation Rentals. I'm Alex and I'm Annie, and we are joined today by Matt Gurley, who is the Director of Strategic Partnerships for Lynn Brook, Matt, it's so good to see you. It's

Matt Gurley  
good to see you guys, too. Thanks so much for having me on. Yeah,

Annie Holcombe  
Matt, I guess I was sitting there doing the math in my head. I feel like we've known each other for a long time, but not quite 10 years, but like we've worked together. We've known each other. We've been running around, but I think I would be interesting is because you've got a pretty you got a pretty robust background, why don't you share that with our listeners, how you came up in the industry and how you ended up at Lynbrook?

Matt Gurley  
Yeah. So I kind of feel like started with my feet to the fire, right? I think started at a startup as an employee. I think number 11 in 2014 with booking pal. And this is back when instant book was scary. This is back when integrated TAS didn't exist. And spent about eight years there really trying to kind of trailblaze integrating in these major TAs, your booking.com with your Airbnbs, and helping. I spent the first three of those, I think, helping convince people to actually trust instant bookings, and working through those turmoils, working with every PMS, working with every OTA, and, of course, working with you Annie for quite a while. And then about I guess it's almost been four years now, I joined Lynbrook. Lynbrook has been around the space for the longest time. It's funny that my first trade show. I think we were the booth right next to them, and they immediately treated me like family, brought me right in, helped show me the ropes. I was two weeks fresh into my first cell role ever, my first time in Portland, so I didn't I remember my lips were bright pink and massively swung because I'd never been in that type of weather before, because I didn't have much travel under my belt. And I remember, linbrook took me in, introduced me to all the other vendors, and I've been friends with them ever since. And can't be happier that I joined them and, you know, join the greater inhabit family. It's been good working with so many teams and so many different products that are now kind of together, that I've worked with separately for so many years

Alex Husner  
before. That's awesome. Well, you guys have kind of stood the test of time, I'd say, in the industry, and certainly you have too. It's interesting. We were chatting before we hit play here, and you don't think about, or, I would say, the majority of people when they're thinking about how they can optimize their bookings and their direct bookings, and their whole the flow of how somebody actually books reservation on the website. You're typically not really thinking too much about the payment processor. You're thinking about the website and some of the more visual things, but you guys have some cool new elements that you've introduced to just make it super easy. So maybe tell us a little bit about that. Yeah.

Matt Gurley  
So for linbrook, we had a pretty big change after, I guess, during COVID, after the inhabit acquisition. Essentially inhabit invested a lot of capital into us to become what you call a payment facilitator. Most processors manage the relationship, but the actual technology and the actual risk management underwriting are managed by third parties. And Lynbrook still has legacy business like that, that we operate. But when we got acquired by inhabit and had this influx of capital and focus largely driven by COVID, because there was a lot of regulations and risk management going on that wasn't really friendly to our industry, so we're trying to come in and save that. We became a facilitator. So what that means is we now manage the technology and the risk in house, so we're able to build full custom programs end to end. So Lynbrook, 15 years ago, when we started our role was, you know, trying to get processing set up and stable for you and keep it that way by working with multiple third parties. Now it's doing that, but also managing from check in to check out, managing that checkout process, managing the API that communicates everything in the middle. So we've been able to really help kind of hyper focus on the checkout experience for guests, and follow that all the way through to when the accountant on your team is closing out their books. So from being just like a back end payment process, we're now this piece that can really help add a lot of efficiency on the back end for your accounting staff and your reservation staff. And then add a barrier on the front end to help protect with fraud, and also try to make your check out experience as close to what consumers are used to on your Amazons and eBay and Walmarts as possible. I think a good way to look at it. And coming from my OTA background, I remember sitting in those offices and all those lessons like learned through working closely with Airbnb and booking.com and the early days of trying to connect in with the vacational space was really their control of the checkout experience. So we spent the past couple years and been able to help kind of put some that knowledge towards building a checkout experience on the vacation world ministry level that consumers are familiar with. So if you think about when you're buying something at Starbucks or you're buying something on Amazon, I don't think are you guys pulling out your credit cards? Are you guys doing Apple Pay or clicking PayPal? Yeah, yeah.

Alex Husner  
My colleague Chris Savino, I think a

Matt Gurley  
lot of people on this page probably know him, because he's been here for 10 years with this too. He is this example that I like. He has two dogs and a ton of kids. I can't even count him. His office is in the basement, so if he's trying to book a trip, the time he has to walk upstairs, do you have a credit card and come back down? He's gonna get pulled in 12 different directions between those dogs and those kids, and probably he's booking something to begin with. So now he just has no wallet. He clicks to pay. I use Apple Pay and skin my face for just about everything. So we're really on a mission to try and get as many Property Management checkout experiences as possible to fit like Amazon or eBay checkout experience with that. I mean, we want to offer every payment method possible, not just credit card. We've offered e check for a long time. It's helped provide savings for property managers. But there's a bunch of risk with that too. If we can, we'd right now we've gone in, PayPal, Venmo and buy now, pay later. We're working on Apple Pay, and we're working on bank to bank payments, and the goal is to make it almost like a little wizard, where whenever we add a new payment option, we can just turn it on your site. And I gotta give a shout out my thanks to companies like IC and D and blue tent and biz core Finland websites barefoot. They've been working really hard with me the past couple of years, trying to get this checkout experience out to as many users. One thing that makes this hard is we don't control all the websites in the space, right? So I have to partner and work with these brands that to put the attention to it. But the overall vision is the fastest that those guests can book, the easiest they can book, in the secure they can book the better. And I think it solves a trust problem too.

Annie Holcombe  
Yeah, there's that that's always, I think that's always the biggest issue is, like, for, you know, for a consumer, they don't know your brand and but they need to know that they can trust the person that's going to collect the money. Should something go awry, I wanted to ask you, like. So connecting with all of these people in the space, does that mean that you guys have created a simplified API that everybody can attach to, or are you doing custom integrations with all of these providers? Yeah, so

Matt Gurley  
part of what we got when we joined inhabit they have a long a very, very sturdy, stable payment technology piece that they've used on the multifamily residential side for a long time, called optics. It's owned and operated by inhabit and we've been able to adopt that. And of course, through 2020, 2021, kind of use, really work with the existing and habit P mesh brands to build out that API, scale it out, get everything that you need into it to actually help property management, software, vacation, website companies, and then upsell, you know, vendor partners or process payments, and try to help get that API to a point that It serves the needs of all the different companies. So we built it out and streamlined on live res, on IC, on lmpm, all the different systems that are in the habit ecosystem. And since I joined about three years ago, we've expanded that out into six other pmss and two other website companies, as well as one other guest communications and upsell engine that aren't owned by habits. We've started to kind of build this out and give the tech to the ecosystem. But what I really want to get this product, I want it to be viewed by the industry as, like the stripe for vacational companies, a strong partner of ours that's helped us a lot is onerez. It's a non inhabit PMS, very, very big. But they expand everything from individual homeowners all the way to, you know, 200 300 400 500 companies that use the software so they have different niches and different needs. And for those you know, companies that might be coming off Airbnb for the first time. And a lot of them just go to stripe, because no processor is going to get on the phone, right? It's not big enough for hands on account manager, and that's how most companies like us are set up. So with enterprise onboarding engine, so these users can go and self onboard like they do stripe. Now that's available for anyone. We want this to be available for everybody. We spend a lot of time and money on the technology initially, technology and truly test and improvement. We want anybody in the space that needs to process a card to be able to use it, regardless of what brand owner

Alex Husner  
Gotcha. Yes, interesting you mentioned owner is I just got back from Costa Rica last week, and got to spend a lot of time with Paul. And that's actually the first time I'd met him. He's just awesome guy, him and his wife. But was curious on that, because I know on and maybe this was more of a stripe issue, but on some companies that are using owner res, you would have to leave the website to make the booking. Has that been changed with linbrook? That it can happen within the site? Yeah.

Matt Gurley  
So I don't know specifically how unres is controlling their sites. We have three options that anybody can implement. It kind of comes up this kind of being up to the site on how they want to do it. Okay, I have no ideal option, but we can give people a pop up page. That's what a lot of sites do. Stripe offers a similar thing. So basically, go to check out, get pay, and it's a landing page that we're hosting, but it's white label. That's one way. And then there's my favorite. It's called a hosted field. So I know everybody on the call loves to talk about PCI compliance. It's the sexiest thing in the industry to talk about. But most expensive things. So anybody here listening thinking about, you know, their monthly fees that they're paying the web providers and monthly fees that they're paying their software providers, one big expense is security that those providers have to have for you, right? Yeah, that's compliant. So if you don't know that somebody on this call has ever been hit by a bot attack, and then if your website wasn't going wasn't being compliant, right? It's meant to stop box from being able to process hundreds of cards and a matter of a couple minutes to fight through attacking an engine. Or it's meant to make it so hackers can't hack your page and get credit card data from your guests. That's what PCI compliance in a nutshell, essentially, is a security from entering that credit card all the way to getting into the PMs to charge so that we offer a solution called hosted fields, which is my personal favorite. It lets the website provider keep its uniqueness, keeps it keep its own checkout experience. But where does hosting the credit card entry field or the PayPal button or the Venmo button or the check button. It's literally almost kind of like an iframe, but they have more flexibility over how it can look. A white label solution, essentially, kind of, yeah, so like the, let's say it's a website provider, and they have a really great checkout experience. I don't want to change it. A pop up solution, like you mentioned unresolved using, you're talking about Alex, that's taking them off the page, moving into another page, and that to pay through that a hosted solution, they're staying on the page. And when they click enter that credit card button, that credit card entry box, the website's not actually hosting them secretly me, so the website never actually touches the card and stays secure. And then the last option, which is good, but it pushes all that compliance back on the PMs and the web provider, is they host that box and they just send me the credit card over an API, so where the consumer to enter on that credit card, they're taking it, passing it to me, so they have to remain compliant from the time they capture the card to when they pass it to me, very technical, silly stuff, but those are the three ways that most credit card payment facilitation companies that have their own API, like us offer so the web provider can kind of design how they want. My recommendation is always hosted fields because less compliance, and it's really easy for me to turn on, you know, Apple Pay for a customer because I'm hosting that checkout piece. But we have the freedom of people, it's

Alex Husner  
good. Can I ask you a question that I've always had about this? Don't know that I've ever really dug into it too much, because it's not that's the payment side. Isn't exactly where I spend most of my time in the business. But what is the reason? Would you say, or do you tell customers, if they are using Stripe or, like, a shift for or an external provider? Like, what is the reason of using Lynbrook that is specific to vacation rentals? Like, what's the Core Advantage

Matt Gurley  
there? Yeah, so one big difference, I think there's ones that people know to care about, and ones and the biggest ones are the ones that you don't realize till it's too late. I'll put it that way. So the core benefits that I think somebody click on us for is one you can tell that we've been built and branded and designed from the ground up solely for the vacational space that's very, very big. So like, think about every. Single transaction report, an account is going to run every single number they have to match. We've built those reports thinking about how our accounting partners think. So. They're not going to be comparing three or four reports to figure out what property this actual number is affiliated with. So just from like, an operation standpoint, because we've been built from the ground up in that way, it's going to be easier for the reservation teams, the accounting teams, things like that, to navigate the system and use it. Another huge thing is actually customer service. Most of these payment companies these days, you can't call them. We've got an office wake for North Carolina where it has our support team and our underwriting team side by side. So whether it's a, you know, I need help with this specific charge, or, you know, this error, what is it? Or I have a hurricane coming next week, how do I prepare? They can call and get those answers. Even with stripe, you cannot call and get those answers. They're the biggest company in the world. You can't call and get that. So that's big, but I'd say behind the scenes like, what attracted me to stripe? I You guys know, I'm a tech nerd, and he's probably where Annie had to suffer working with me for a couple of years.

Annie Holcombe  
He's definitely a go to guy to explain something to you.

Matt Gurley  
But the way it works on the back end, we manage risk and underwriting in house, and I don't think people realize how big that is. So when you use most processors, either something big like shift four or stripe that are working in multiple industries, they don't know the nuances and the specific risks of this space. Or when you're using, you know, even old limbrook Our old users, right? We have multiple sort of pieces to the puzzle right on our older product, where there's third party underwriters involved, right? They may or may not understand what to do when a hurricane happens and you're kind of begging and pleading for them to help a client. So I think about, you know, hurricanes taking out vacation rentals, fires taking out vacation rentals, things like that. Those are real risks that happen. We also see fraud, we also see employee theft, we also see a lot, a lot of things like that. But with an in house underwriting team, you almost have another blanket of security, because we're probably the only company that can say we'll never and really, it's very, very hard to get in a scenario with us where you won't be able to pay your homeowners, whereas with something like a stripe or a shift for their risk management policy does not care about your cash flow. They don't understand your cash flow. They think you're a hotel. They don't know that 80% of that margin actually belongs to a homeowner, and they need it by this date are going to lose that client. So when it comes to managing the hard times, we are in the weeds with you, and we can help manage it and mitigate that risk in a way that's vacation friendly. I think that's huge, but I don't think people see it till it's too late. It's one of those scenarios which is unfortunate, but that's what I try to explain to a lot of the software partners that don't integrate with us yet, is during the bad times, we're the ones that help kind of keep it stable. I try to picture, what is it? I don't know if you guys are Marvel nerds like me, but I try to picture that scene of spider man holding like with a spiderweb, you know, a school bus and then Wednesday from falling at the same time. They're trying to keep it all that's kind of what Limerick, I feel like. Limerick is we try to keep Google from that guest looking till that homeowner gets paid, even if there's a hurricane happening or a fire going through, or an employee stealing money, we catch those things all the time and help monitor

Annie Holcombe  
the signal. Interesting thing I you bring that up like I was thinking about how specific our industry is with some stuff that happens. And so, like, you know, like a hurricane it is. It happens to a market. So it devastates a market and acted, in fact, 10 people that are using the 1000 people are using it, but they're not necessarily all operating in the same intention and the same the same way, and different pricing and all the things that go into it. So I actually was picturing in my mind last year in North Carolina, and that's such a great example of something that nobody ever could have imagined that hurricane everywhere and fires happen everywhere, but that that the that impact was so great and so far out of left field that nobody would have thought to plan for that. But having a partner that plans for all the scenarios is super important, and I think that that's something that I would not have thought of, but I'm glad that you said that, because I think it's something to really, really, you know, drive home to people that it's like when you're partnering with people in this industry, make sure you're working with people that understand your business and not necessarily always going with either the cheapest offer. For or the one that's the most the shiny penny that just became available. It's like, really about that's what I love about this industry as a whole, is like, we're so relationship driven that you can ask other people, and I will say that without question, I've run into the scenario where people have asked me about different payment providers, and every time I talk to somebody about Lynbrook, like they just rave about the service, they rave about the support. And I think it's really, really key that you're honing in on being in the business and understanding that, because I think you're right. I don't think people understand that until it's happened to them and they wish they'd known so if anybody's listening and like they that's one thing I think they should take away from it is like partnering with Lynbrook means you're partnering with a friend that is in the business with you. And that's really important.

Matt Gurley  
We really care. And I think that's one of the big reasons I joined, right? Is even from that first day at that conference, you know, almost 11 years ago now, they took me in, right? I knew got to this race. They had no no problems about pulling me in and starting to introduce me to be introduce me to people and spending some time with me. And I think that's the way from the ownership down to the support team. Everybody has a mentality every day. We have a daily call at 9am it's like, okay, who needs help, right? And we go through it. We try to help out where we can, and help guide people through things and but we're talking about you with the hurricanes that hit North Carolina last year. Luckily, North Carolina is a trust state, right? So even though they're not on the coast, they were still financially protected. And a big part of what we do is try to coach property managers into understanding what their risk is and understanding why it's important, even if their state doesn't restrict or require them to follow I had that conversation multiple times a day, I think. But for the listeners, I think a good way to understand the vacation real space as a risk target, and a good way to realize why there's only usually two or three vendors at these trenches and credit cards, whereas any other industry, any other industry, there's 20 people are scared, from a credit card perspective, to actually operate in this space. It is one of the highest risk markets period when it comes to credit card management risk, to be thinking about it, me, as a credit card provider, our risk as a, as a, as you know, as an entity that's helping facilitate these transactions, from that gas card, you know, the homeowners bank account usually, let's think, let's think about ordering Starbucks. I must want coffee because I'm interested twice now the let's think about ordering a Starbucks. The risk that the processor for Starbucks takes is the time that they go and they tap their phone and they're the pay until that person hands their coffee. So what $4 in five minutes max, is the risk for that processor, whereas for me, my risk is this, you know, $40,000 booking in South Beach Miami that it's only paid a year in advance, so I have to manage and make sure that that $40,000 is covered somewhere from booking right now to checking in next January. So the risk falls on the property manager, and if a property manager can't cover it, it falls on the credit card provider. So that's why there's so few credit card companies in the space to begin with, because it's a lot of money, and it's a long period of time from, in our terms, product delivery. The way you read any credit card agreement, it talks about managing funds securely from time of like product promise to product delivery. And in our states, a high number, and it's a long time until our products delivered, right? So no matter what your your room agreement says, no matter what your state requires, no matter what town you're in, whether you're real estate broker or somebody doing this as a side hustle, like Visa, MasterCard, Amex, discover, they don't care. All they care about is, did this user get it get to check in or not? They don't care about anything else. So we work. They don't care that a hurricane hit, they don't care that a fire is going through. They just know they need to get their card holder their money back, and all those scenarios. So a large part of what we coach is, then you don't have to follow trust accounting to the T I know that's hard, but at least do the basic cash flow requirements of trust accounting, which is making sure you have cash on hand for any advanced deposit. And advanced deposit is money taken prior to prior to check in. So if you have, you know, let's say it's a decent sized company, and you have half a million dollars in transactions that haven't checked in yet. You should have half a million dollars accessible somewhere, in case something happens, so your business doesn't that's the biggest thing we coach quest accounting. In nutshell, there's a lot of states that require it. They're basically requiring. That with a lot of complex accounting stuff on the back end, we just work with our users to at least do the cash flow management. We have a couple options. We connect to their bank and we monitor it for them. And you know, this has been helpful in many cases. We've caught employees stealing money. We've caught we've notified people that, you know, hey, this money might be elsewhere. What's going on, and the cash employee moving it things like that. So we monitor bank balances, we monitor against deposits, and as long as those things are equal, you only need to hear from us. We just, you know, we're here if you need us, but we're not bugging you or calling you and we see something's off. We call it, you know, hey, something looks off. Can you look into it? A lot of times it's it's identifying something malicious, and we're helping people catch that, which is good on the other end. For companies that you may be brand new to this, maybe they're coming off Airbnb, they've grown their portfolio to 30 units, and they want to get a direct booking website, but they've never touched a card before. We're the only company in the space that sits up. Basically, we automate the cash flow for them. We set up a bank account form, we put the money there, we automatically move it to their operating and check in. And we do that all by communication with the PMs and communication with their bank. And we just help keep them compliant. That's what it keeps people pretty much risk free from the business. And I think anybody listening that is kind of growing with a point to sell like that's one of the biggest things these acquiring companies look for, is, how are your books? And we just make sure they stay clean. So we keep your screen, we keep you attractive for an exit. Just good.

Alex Husner  
Yeah, no. I mean, I think anytime you can anticipate the needs of your customers, whether it's us on the property management side for guests or owners or you guys on the tech side. It's definitely forms just a good relationship there. But I'm curious, when did Lynbrook become part of inhabit

Matt Gurley  
we got acquired, and might be off by a little bit, but I believe it was 2019, okay, we were able to elevate payment facilitator, status robber and API and the risk in house in 2020,

Alex Husner  
gotcha. And what changes have you? Have you seen or like, what, what kind of has been the benefit in your eyes of Lynbrook now being part of such a larger company for your customers?

Matt Gurley  
Yeah, great question. I think a large part of it for us specifically was the ability to become a facilitator and help us bring in these risk management programs, and help us bring in the new technology advancements we've been able to build. So before, you know, an average credit card processor, we could process cards, you can process recheck, and that's kind of it. And then we're at a whim of negotiating with other underwriters and other risk managers to keep cash flow going, things like that. So with this, we're able to build this secure program. But on the other end, now that we have this Stable Tech in place, let's let us go build cool things we can now, like we were talking about mobile wallets earlier, but we built out quite a few other things, just listening to our customers, especially on the enterprise level, what they're looking for, you get a lot more insight because inhabit owns other products from these companies than you would if you're just a payment processor. You know, like when I'm talking to a property management now, and I knew we do some of these meetings with a larger clients, where three or four brands in one conversation would try to address it as a team on how we can solve these problems. A good one is a couple years ago, managing just bank balance reconciliation at the end of the month for accountants has always been a very time consuming thing for property management companies. This feature is now available on multiple PMS. As we built up, we started with streamline, because, you know, sister company easy to do. A big complaint was how long it's taken to balance books. I mean, I think about a company in Orlando, I won't say their name, but they had three accountants working full time that are on 400 properties, and almost all all day was just manually looking at bank balance spreadsheets, manually looking at deposits and going in and confirming that they got paid. They were paying three salaries at that scale. Lynbrook, we have that data. I sent it to the bank. I know what we sent. I know what the transaction number was, I know what the property I know what the reservation number was, etc. So we went, this is now four or five years ago, but we went, we built out an API or streamlined to absorb and just automate that report. So when we connect to that account, we immediately saved them almost under $20,000 in operational costs, because they don't need to pay the salaries to do that anymore, because they're not automatically getting their books for them. So it's little things like that that you find that you probably wouldn't see if we didn't have something as special as inhabit is because I wouldn't be able to see through that. You know, barriers from us not gonna let me go in their accounting system and play around with their competitor if they're not, if they're not an additional brand on the portfolio. But we've been able to build that API now we've been able to give that API out. So now we have a little journey. We have Cyrus barefoot, we have a lot of different systems where they're able to kind of pull in and offer the same thing. So it's helped or started within the you have an ecosystem, because we're there to test it together. We're all kind of bring that tech to the industry as a whole and build it out. Stripe has had a similar API for a while, but it doesn't have the same data, it's not as consistent. They're not tracking reservation IDs or things like that. So we're able to give more relevant data, because we know what it's for, right? Another thing I'd say is homeowner payouts. I think that's always been a large problem. I think we might have lost Anna. Sorry.

Alex Husner  
I Alex,

Matt Gurley  
I think about your condo world days like, I don't know how you guys paid homeowners back then, but it was a lot of homeowners, so I'm sure it took a lot of time. And what we've done there is built out a secure, plaid, integrated ACH checkout system or a property manager doesn't even need to know what their homeowners banking information. It's like onboarding a homeowner used to be okay. I need to send you these micro deposits to confirm your bank is accurate, so I can gather send me avoided check, or let me just enter your accounting routing number on the spreadsheet somewhere each month right now, it's we send an email. The homeowners self connected plaid, the same way that we use Venmo today, the same way people connect to QuickBooks. It's the same application, and the property manager doesn't have to hold any of that risky data. The homeowner can self manage how they get paid, and it just goes to a click of a button. So from somebody that same account paying 400 different owners. You're now doing a two button click. We've been able to work with the PMs internally to build that out and then also, then roll that product out everywhere else too. So it's just kind of, it's, you see, with us being able to collaborate across brands and habit, we've been able to find these things and your brains tech from one part to another and build something actually, you know,

Alex Husner  
yeah. Second

Annie Holcombe  
question related to like, well, I guess multi market, one thing that we had looked at at next packs is we have, like, a PMS light that we offer outside the US. And one of the things that we struggled with was in Latin America, and specifically in Brazil, like payment processing in Brazil, and for whatever reason, Brazil, just the way their the way their banking system works, it's like, really, really convoluted and crazy. So was curious for you. I don't know. I mean, is Lynbrook outside the US? I'm assuming you're probably in Canada. But what does that look like in terms of international footprint for you guys? And how do you navigate that? Because you know you're dealing with multi currency is always a challenge. But then there's all these layers of rules. And Alex and I've seen this from the podcast with we work with companies that are in Europe, and when we're talking about, like, paying versus getting paid, or whatever, like for various things, you have to go through multi layers, because there's that check and balance that these international banking banks like to do to make sure that there's no money laundering or whatever, you know, whatever it be. And I think in South America, it was like the is it the cartels running money was always in my mind, but that's probably just more of like TV lore. But what does that look like for you guys in terms of international and growth and how you work with it. TV

Matt Gurley  
lore always comes from some a little bit of truth, right? But right now, we are obviously fully available in the US, and then we've got a couple beta pilots going in Canada, and we're hoping to have that fully released at some point in the next year. So it's pretty when you get to this facilitator level where you're kind of doing everything under the payment processing umbrella, you have a lot more responsibility. So it's harder to break into those markets. I can't party for something to bridge off a gap. So right now, it's us, and we've started in Canada. I think, you know, not in the near future, but the sites on the kind of downstream, eventual when we get to it, and we have time, we're looking at the UK next. But for Latin America in general, the hard part for any payment processor is that just the banking rules aren't very regulated. So it's very, really risky to get involved in so we just kind of staff, you know, there's no structure, there's no format. But what we do for our partners that have properties in those areas, we can work with them, doesn't matter what currency they use, doesn't matter where the property is located, but if they have a physical location, or not a try, not any location, like a PO Box. Lot of people do do this. They need to have a license, a business license, and a bank in the United States. So we work with people all up and down south of Latin America, and most of them are, you know, like have a business license. And have a bank account in the US. It doesn't solve for everybody, but that's where a lot of the companies do it. Love it, and how a lot of the companies do it is they get an LLC up here, get a bank up here, and then we're able to do it.

Alex Husner  
Interesting. What about the like, buy now, pay later, like the affirm type models? Does Lynbrook offer anything like

Matt Gurley  
that? Yeah, good question. So we chose so the way our application works for wallets, we could eventually have any wallet somebody wants, so somebody really likes a firm, or likes uplift, those are in mind to pull in one day. Okay, just pop up on the website. It's almost like, I kind of like zap here, right? We just add another. Yeah, that's how we built it out. But what we've done right now is program called Pay Later, and it's through PayPal. There's a few reasons why I like it, where something like a firm or uplift or Klarna, they're essentially designed for usual, your, your common e commerce product, right? Your Amazon, your eBay, your, you know, cosmetics, things like that. So when you talk about a high value, like a vacation rental today, a lot of them kind of tap out. They can't hit that. They can't support numbers that. Whereas with PayPal, they have pay later, which I think is capped around 4000 or so on a stay, I've seen some exceptions. And then they have PayPal finance. So the consumer, when they're checking out, PayPal gives me unique offer based on that consumer. The strength that we found in Paypal is they have around 400 million users. So when you log into your PayPal account at checkout and you're looking okay to want to pay with my Venmo, do I want to pay with PayPal? Do I want to pay later? They already know you. They know your credit score. They know you know they're connected your bank. They can see your your assets. So they give you a custom offer right there, if you want to pay, and they could actually split it to do financing. If it's a huge deal, let's say it's like using that same $40,000 Miami south beach villa. They can space that out over monthly payments, almost like a car loan. We can make that offer somebody wants to do it. So we like it for that reason. It already has user base that already has an existing user base that exceeds the population of the US that they that they have a known understanding with. So they can make an offer really fast to somebody. They can make a track of offer to somebody really fast, because they'd like you to know you during the checkout process. And two, they can give you that offer at a really high amount, whereas most of the Buy Now pay laters would just not give an offer at all because the volume or the size the transaction student, that makes sense. What's nice for the property managers is when PayPal extends this offer, you pay later and the guest accepts it, they just pay the property manager in full. Doesn't matter what their payment policies are. If it's like, oh, if I want a $200 deposit, I pull my 30 days prior extra cards. But on Pay Later, they just pay the full amount up front, and then PayPal, they're the ones that granted the the loan, essentially to finance that stay. It is their responsibility to collect them. So they're paying you, the property manager up front, and then they collect you from the guests. And it's wonderful. And it's wonderful.

Annie Holcombe  
Oh, so no risk for the property manager to use that. That's that's really good, especially for the larger stays Absolutely,

Matt Gurley  
exactly. So the property manager goes away entirely. Yeah, the property manager can refund it like that. So they cancel the transaction. It's a standard refund things like that. Yes, you can refund it. You can do you can do partial refunds, whatever you want, to refund that guest and kind of treat it like a normal transaction. But if that guest disappears off the face of the earth, doesn't check in. I mean, it's a frog chargeback. You know, that's, it's a nice thing, yeah,

Annie Holcombe  
chargebacks are always the vein of like existence with processors. I think I'm sure, yeah,

Matt Gurley  
our favorite question. But with fraud specifically, we've sort of tackled it in two ways. With the wallets piece, we haven't seen fraud yet on any wallet transaction, if you think about it, if you think about when you're checking out, if you check out and use PayPal on any website, now, they have to log in to their paypal account to pay. So they have to have a PayPal account. They have to have a bank connected. They have to have their card connected. They have to get text verification. If it's an unknown IP address to verify it's them to get into the account. So all these kind of preemptive factors that would block any normal fraudster from using a PayPal account, stops them from getting in, which is great you're requiring in Europe. I'm sure you guys hear about two factor authentication. It hasn't made its way to the US yet, but having a wallet is two factor. Authentication at checkout. That's what it is. Now, what we've done for credit cards and in each check, I think credit card specifically helps a lot is we've done a post booking authorization. So I like this better than your solution, because it works on our TAs you know, if you're not controlling like I could go and spend a bunch of time developing a secure tax verification at checkout for somebody to book with a credit card on your website. One, I think you're going to convert less. And two, it's only going to touch what's on your website, not anything else. So we've done a post booking method so there's no conversion issue. They enter their card, they move on guest books. Charge goes through all that. It can also work on VRBO. Can work with booking.com. It can work with wherever, whatever agency is sending you a card across the board. And the way it works is the second that reservation enters your PMS, and the charge goes through. That charge is going through linbrook. We got, we've gotten the grass email their guests, their first in the last in their cell phone. We know that info, so we send them an email, and we send them a text, and they have to verify both. Have you guys done that this week? I know I have, like, just, oh, yeah, everything. Like, from a consumer perspective, your guests have done this before. It's not something new. I'm not asking them to take a selfie, right? Yeah, airplane the I'm not asking them to upload a photo with ID, nothing like that. Just get an email. Verify the email that you enter their reservation number. So if they booked with you and they're real all they should know the reservation number, right? So that you know the reservation number, their first name, the last name, their cell phone, and their birthday, they get a text. They have a code, and that's it. What's secretly happening in the background? This is happening every time we enter Ra, get a text code that we have to answer on our phones. The company sending you that text code now gets access to all your public phone records and pull it in so I can pull it. Yeah, so whenever that that's what they're doing, is they're checking your public phone records, and you enter that text to make sure it's you, comparing the data on that public phone record to the data on the reservation and the data on the credit card, and I'm sending your reservation team. If there's an issue, there's not an issue. Let them check in. Like we know how long they've had that phone. We know the address matches. We know the first name, last name matches. We know their birthday. We've checked it against the the birthday tied to the cell phone. There's no red flags it. It's great. Like we're not forcing that guest to go through unnecessary steps. I don't have to. They don't send a license. They don't have to come by the office. We know they're real, they can go in. But for the guests that you might have a problem, we send an email out to the property manager. We also have a dashboard that's tracking this, and we score them one, zero to 1000 if they're less than 1000 we tell the property manager what's wrong. So usually, when people will try to, like, honestly, nine times out of 10, the fraudster will see you're doing a text verification, and they'll just never respond, because they know they're caught. They know if they they know if they do the text verification, they honestly can perjure themselves, because you now have the fraudsters data. Yeah, interesting, yeah, nine times out of 10, if you have somebody committing fraud, they're just not going to do very just not giving the verification. So don't sit on the coast. Don't

Alex Husner  
let them in, right? Yeah, yeah, yeah.

Matt Gurley  
The ones that do it. One, you know how their information to report reported to the police, because you have the public phone data. Two, will catch it. Sometimes we'll see somebody also like, phished an elderly person's, you know, Verizon account. They'll go through the email and get the data, and they'll add themselves to a line. So we can see if somebody just added a phone, and we'll tell you, hey, interesting, wow. Unfortunately, the most common that we see is the person that the phone registered to has passed away recently. That's very, very common. People look at obituaries, they fit, then they you gotta try to get access to that account. However, however, they can

Alex Husner  
awful. Yeah, yeah,

Matt Gurley  
you see that all the time. But the point is, is we're able to catch these, these things that would inevitably be fraud chargebacks that you would lose when there's a real victim you can't so we're identifying those actual fraudulent transactions. We're telling the property manager, don't let them in, cancel the transaction refund card, because there's an actual victim in play, and that's been really helpful. We stopped a lot of chargebacks that way, and we do it for free for anything last minute. So anything that's within seven days of check in, it's just part of the service you get it. So it's helped. I think, in my opinion, we'll leave a big cost point for property managers, because a lot of companies that they pay this take a percentage or charge a per verification fee. That adds up, and then I think it's made the guest checkout processing. Easier because we're using one of the, you know, kind of paid services. Every guest has to go through it, every guest has to send their license, every guest has to take a selfie. And it's just another thing that people don't really want to care about when they're trying to go enjoy a vacation, you know. So I think it helps just maintain a good relationship and good and give it a good and give it a good checkout experience to your guests

Alex Husner  
at the same time. Yeah. Well, interesting. I think

Annie Holcombe  
this, this whole, like this, the whole process, payment processing, is always, like, just a fresh it's a it's a friction point for everybody in business, because it's an expense, and, you know, you need it. And it's like, I think you guys have answered a lot of the a lot of the challenges that people face. Just being able to reconcile your books at the end of the month is a really huge is a huge feather in your cap, I think. And then just the relationship that I think linbrook tries to have with the partners is super important. And I'm glad that you were able to come and talk with us today. One of the things just in closing, I was thinking, Alex, and I always like to ask people, and I think you've been around the business, is around the business is, you know, kind of separate from payment processing, what do you think is like something really important that maybe is not being talked about enough, or maybe it is related to payment processing that isn't being talked about and maybe should

Matt Gurley  
be? Yeah, thankfully, like working with like VR nation and vrma, they really helped me have a bit of a fraud platform over there, because when I first joined linbrook, nobody was really talking about it. Then, you know, your pay X company a lot of money to collect and collect a license, which I didn't think was right answer. And so think that, thankfully, that's changed, but now, I honestly think what's completely ignored in any non industry, regulated state like I say, that doesn't require trust people, just to this day, don't understand their own their own risk. I think that's what's really important to learn. A lot of companies don't understand what they're actually on the line for, especially when I get on the phone with these co host companies that want to start it, can direct bookings and things like that. They have no idea the amount of risk Airbnb was covering for them that's now on them. They don't have the capacity to actually manage it. There's a lot of education we do with the kind of up and coming, up and coming companies. But even companies have been around for 10 years, we find some times we use an advanced deposits to pay employees because they don't think they're going to be in a hurricane path. I mean, something like, you know, whatever North Carolina happens, it's, I think that's one big, one big piece in the space that's still missing is just understanding that risk. I I think another big thing, and kind of close on just a little bit of defense for a habit. I think there's a lot of investment money behind a lot of different companies right now, and just kind of understanding that, and understanding where you want to, or you want to, or you as property manager, want to lay your chips, right? I think every major PMS at this point is backed by a lot of big companies. So I think it's there's, I don't know. I think I may be overly sensitive to it, but there's a lot of weird finger pointing, like, oh, this person got funding, or this person, recap, etc, and they look at it as a bad thing. I look at as a positivity and make sure that you're communicating to your software what you want and where you want that money to go, because in the end, the software providers don't exist without the property manager, and if they're not sharing what they want out of their software, especially when we get these big raises or these big investors, if you're not adamant about it and sharing, and it's not going to get done and we're going to get done, and we're going to kind of be in the same spot, right? So I think just being vocal with what you want with your partners is a good takeaway, too.

Alex Husner  
Yeah, definitely. That's a really, really, really good point. And I think that comes down to just having, you know, building those relationships, having those open lines of communication with your vendors, which, you know, the three of us obviously know the importance and have seen that. And, you know, have seen the opposite side, when you don't have those relationships, that your your needs and what you want is just not, not heard. So definitely good piece of advice there, Matt, but Well, this has been a lot of fun. And I, you know, payment processing, again, like I would not think that it would be so interesting, but you've, I've learned a lot today, to be honest, from a lot that you've shared that I did not know was going on behind the scenes with Lynbrook and what you do. So appreciate you coming on the show. If anybody wants to reach out to you, what's the best way for them to get in touch? Yeah,

Matt Gurley  
I'm always on LinkedIn. I'm LinkedIn junkie, just Matt Gurley on LinkedIn, and then my email is matt.girly@linbrookgroup.com you can reach me there anytime.

Alex Husner  
Awesome. If anybody wants to get in touch with Annie and I, you can go to Alex and Annie podcast.com and until next time. Thanks everyone. You.