EP973: The Challenge of Achieving integrated Payments

In this interview, Tommaso Jacopo Ulissi of Nexi Group explores the ongoing convergence of digital payments with specialized business management software. He explains that modern merchants no longer seek isolated transaction tools, but rather integrated ecosystems that handle industry-specific tasks like table management or online booking. To remain relevant, payment service providers must shift from being simple utility companies to becoming embedded partners within the software platforms that merchants use to run their daily operations. This transformation requires a focus on seamless API integration and user experience to meet the rising demand for all-in-one digital solutions. Ultimately, the industry is moving toward a cooperative model where payment capabilities are hidden, yet essential, components of a broader merchant interface.

Transcript

SPEAKER_00 0:00

So um the next time you tap your phone to pay for a coffee, you know, you probably think you're just using a payment system. Right. But you aren't. Not really. You're actually interacting with this totally invisible, hyper-specialized software ecosystem. The actual paying part. It's just a well, it's a tiny, almost accidental byproduct of this much larger machine.

SPEAKER_01 0:22

Yeah. It's wild to think about.

SPEAKER_00 0:24

It really is. I mean, think back to uh packing for a big trip in, say, 2005. Oh boy. Right. You needed this very specific heavy bag of electronics. You had your bulky digital camera, a standalone GPS unit that you had to like suction cup to the rental car windshield, maybe an MP3 player, or even a physical calculator for currency exchange.

SPEAKER_01 0:46

Yeah. And today, I mean, you don't carry any of those things as separate objects anymore.

SPEAKER_00 0:50

Exactly. They haven't ceased to exist. They've just been completely absorbed into the DNA of your smartphone. So they became invisible just by becoming integrated.

SPEAKER_01 0:58

Aaron Powell And that vanishing act, that's the perfect lens for what we are looking at in our deep dive today. Because the standalone payment, you know, that distinct, isolated moment of pulling out a card at a register.

SPEAKER_00 1:11

The dreaded swipe.

SPEAKER_01 1:13

Right. The swipe, it's undergoing the exact same evolution. It's totally dissolving into the background of massive business operations. And we actually have a really fantastic roadmap for this transition today.

SPEAKER_00 1:22

Yes, we do.

SPEAKER_01 1:23

We are pulling from the October 2025 edition of the IBSI FinTech Journal. They featured this incredible interview with Tommaso Giacopo Ulisi. He's from the uh Italian pay tech company Nexi Group.

SPEAKER_00 1:36

Right.

SPEAKER_01 1:36

And he basically lays out a structural philosophy of commerce that, I mean, it fundamentally changes how we even think about moving money.

SPEAKER_00 1:44

Aaron Powell So if the payment is disappearing, the big question is what is it disappearing into? Exactly. Because the industry buzzword for a while now has been verticals. But um, reading through Ulysses insights, there's this massive hard pivot happening right now. The payments industry is waking up to the fact that they themselves are not a vertical.

SPEAKER_01 2:02

Aaron Powell Yeah, he makes this point unequivocally right at the start. He says payments is not itself a vertical. If we really want to use that term correctly, we have to look at the specific merchant category. So restaurants are a vertical, cafeterias, wellness centers, gyms, those are the actual vertical.

SPEAKER_00 2:20

So the payment is really just the like the tip of the spear of this massive operational convergence.

SPEAKER_01 2:26

Aaron Ross Powell Precisely. We are looking at a landscape where the ability to collect digital funds is just permanently fused to basic everyday business logistics.

SPEAKER_00 2:36

Aaron Powell Like what kind of logistics?

SPEAKER_01 2:38

Aaron Ross Powell Well, software that sets up employee work shifts or manages the table layouts on a restaurant floor, or even software that triggers an automatic order for more flour when the kitchen stock drops below a certain weight.

SPEAKER_00 2:51

Okay, wait, I have to push back on the scope of that a little bit on behalf of the listener.

SPEAKER_01 2:54

Aaron Powell Sure, go for it.

SPEAKER_00 2:55

Because as a customer, the payment is the finish line. Right. I eat my meal, the waiter brings the check, I hand over my card, and I leave. So why on earth does a massive, highly specialized payment processing company like Nexi Group care about a restaurant's kitchen inventory or like how the host stands or setting up the floor plan?

SPEAKER_01 3:15

I know it sounds crazy.

SPEAKER_00 3:16

It feels like they are straying way outside their lane. Shouldn't they just focus on securely moving money from my bank to the merchant's bank?

SPEAKER_01 3:25

You'd think so, but it actually comes down to pure survival. I mean, Ulysses projects that over the next five years, a payment company's relevance depends entirely on distributing its capabilities seamlessly into these ecosystems.

SPEAKER_00 3:38

Ecosystems that do all the other stuff.

SPEAKER_01 3:40

Exactly. The systems that govern everything happening before and after that swipe. Think about the operational flow from the merchant's perspective. Okay. When a customer orders a stake and pays for it, the restaurant owner doesn't want to like log into a separate payment portal just to verify the funds.

SPEAKER_00 3:55

Oh, right. And then walk over to a clipboard to subtract a stake from inventory.

SPEAKER_01 3:59

Aaron Powell Exactly. And then open a spreadsheet to calculate the server's tip percentage? That's a nightmare. They want that single payment to act as the automated trigger for the entire backend.

SPEAKER_00 4:09

Aaron Powell Oh, I see. So if a restaurant uses a payment processor whose software can't instantly talk to the kitchen inventory.

SPEAKER_01 4:15

Or the payroll system.

SPEAKER_00 4:16

Yeah. That restaurant is just going to dump them. They'll drop them for a processor who can. So the payment company actually has to care about the inventory because the inventory dictates the software. And the software dictates who actually gets to process the transaction.

SPEAKER_01 4:28

Aaron Powell That is the exact threat keeping payment executives up at night right now. And um it brings up this colossal engineering challenge because you have to balance the strict standardization of money movement with these wildly customized user experiences.

SPEAKER_00 4:46

Aaron Powell What do you mean by standardization?

SPEAKER_01 4:47

Aaron Powell Well, the underlying plumbing of a payment has to remain identical across the board. You're managing the transaction routing, ensuring high authorization conversion rates so a card actually works. Aaron Powell Right.

SPEAKER_00 5:00

The stuff we just expect to happen instantly.

SPEAKER_01 5:02

Aaron Powell Exactly. And maintaining absolute compliance with complex, anti-money laundering regulations, plus running real-time fraud detection algorithms.

SPEAKER_00 5:11

Aaron Powell That's a lot of heavy lifting. Trevor Burrus, Jr.

SPEAKER_01 5:13

It is. And that heavy, highly regulated plumbing handles the exact same fundamental task, whether you're buying a coffee or a commercial treadmill.

SPEAKER_00 5:23

Okay. It's almost like municipal plumbing. Trevor Burrus, Jr.

SPEAKER_01 5:25

Oh, that's a good analogy.

SPEAKER_00 5:26

Aaron Powell Yeah. So the payment network is the water supply. It has to be flawlessly clean, zero leaks, and highly regulated at a massive scale everywhere. But the merchant doesn't actually care about the pipes hidden in the walls. They only care about the faucet.

SPEAKER_01 5:41

Yes.

SPEAKER_00 5:41

So an industrial kitchen needs a massive high-pressure sprayer, but a luxury spawn needs like a sleek, motion activated waterfall. It's the exact same water, but a totally different delivery system designed for a specific environment.

SPEAKER_01 5:56

That is perfectly said. And those faucets, the merchant interfaces, they are deeply fractured by their vertical. I mean, Ulysses contrasts a restaurant with a hairdresser or a gym to show this. Well, a restaurant demands a pay-at-the-table solution, right? The hardware has to seamlessly split a bill four ways, calculate a custom tip on the fly, and um close out a specific table number on a digital floor plan.

SPEAKER_00 6:20

Yeah, you can't really do that on a standard clunky terminal.

SPEAKER_01 6:23

No, you can't. And handing that specific restaurant device to a hairdresser, totally useless.

SPEAKER_00 6:29

Right, because a salon doesn't have tables.

SPEAKER_01 6:31

Exactly. A salon or a spin studio needs a midnight online booking engine. They need a system where a client can reserve a slot for next Tuesday and just prepay the transaction instantly. Wow. Okay. The fundamental payment plumbing is exactly the same, but the delivery mechanism is entirely dictated by the specific needs of the business.

SPEAKER_00 6:50

Aaron Powell Which creates that really incredible geographic distortion he mentions in the article.

SPEAKER_01 6:55

Yes, the globalization of niches.

SPEAKER_00 6:57

Right. That was such a fascinating point. He says a tritoria in Rome actually has far more operational overlap with a pub in London than it does with the shoe store sitting right next door to it on the same street in Italy.

SPEAKER_01 7:08

It's so true. The borders aren't physical anymore, they are totally operational.

SPEAKER_00 7:13

Because the restaurant in London and the restaurant in Rome both need kitchen inventory tracking and tip splitting, but the shoe store in Rome needs absolutely none of that. Aaron Powell Right.

SPEAKER_01 7:23

So the vertical defines the technological need, completely superseding the geography. And you know, this level of highly customized, hyper-integrated software represents a massive shift in who actually dictates the future of retail tech.

SPEAKER_00 7:38

Aaron Powell Because it used to be us, right? The consumers.

SPEAKER_01 7:40

Aaron Powell Exactly. For decades, consumer demand drove the evolution. People got tired of carrying cash, so they wanted to pay with plastic.

SPEAKER_00 7:48

Right.

SPEAKER_01 7:49

And that consumer demand forced merchants to begrudgingly go out and install digital terminals. Consumers wanted convenience, and merchants just had to adapt to keep them happy.

SPEAKER_00 7:59

Aaron Powell But I mean the consumer friction is largely gone now. Most of us are pretty satisfied just double-clicking the side of our phone or tapping a smartwatch.

SPEAKER_01 8:06

Yeah, it's effortless for us now.

SPEAKER_00 8:08

So the tail is wagging the dog here. Merchants are the ones feeling the operational pain. So they're the ones aggressively demanding these massive back-end ecosystems.

SPEAKER_01 8:17

Yes, there has been a total flip in the power dynamic. Merchants are raising the bar for the retail experience. They are demanding what Ulysse calls one-stop solutions.

SPEAKER_00 8:28

They just want everything in one place.

SPEAKER_01 8:29

Exactly. They are exhausted by fragmented systems. And they aren't just looking to unify payments and store management. You know, they are extending this into highly complex financial needs.

SPEAKER_00 8:42

Aaron Powell Well, think about it. If they control all the transaction data and the inventory data in one platform, they must be leveraging that for more than just keeping the lights on.

SPEAKER_01 8:51

Oh, absolutely.

SPEAKER_00 8:52

They're probably using that cash flow visibility for things like targeted marketing or even small business loans, right?

SPEAKER_01 8:58

That is the exact mechanism at play here. Let's look at lending, for example. Historically, if a small business needed capital to expand, what did the owner have to do?

SPEAKER_00 9:08

Go to a bank, bring a stack of paperwork.

SPEAKER_01 9:10

Right. Print out months of paper statements, prove their historical revenue, and wait weeks for a human underwriter to look it over.

SPEAKER_00 9:17

Total nightmare.

SPEAKER_01 9:18

But now, because their payment processing is natively integrated right into their inventory and sales software, the platform itself utilizes algorithmic underwriting.

SPEAKER_00 9:27

Whoa. So it just knows.

SPEAKER_01 9:29

It just knows.

SPEAKER_00 9:30

Yeah.

SPEAKER_01 9:31

The software monitors the APIs, it sees the inventory turning over in real time, it calculates the daily digital payment volume, feeds all that data into a risk model, and instantly offers a customized lending product.

SPEAKER_00 9:44

So the merchant just logs in and sees what a pop-up?

SPEAKER_01 9:47

Basically, the dashboard simply says you are pre-approved for a$50,000 line of credit.

SPEAKER_00 9:53

That is incredible. It's an entirely enclosed loop. The system knows the merchant can pay the loan back because the system literally is their cash flow. It's capturing a revenue before it even hits a traditional bank account.

SPEAKER_01 10:05

Exactly. And we see the same enclosed loop with marketing, too.

SPEAKER_00 10:08

Really?

SPEAKER_01 10:09

Yeah. A merchant can run an ad campaign offering digital discounts to loyal customers directly through their management platform. And because the payment processing is already baked in, they can definitively track if that specific digital discount actually resulted in a cashless payment the following week.

SPEAKER_00 10:25

Oh wow. So it closes the attribution gap completely. You know exactly if your ad worked.

SPEAKER_01 10:30

Exactly. No more guessing.

SPEAKER_00 10:32

Okay. So if payment companies are just providing the hidden plumbing for all of this, who is actually building these incredibly specific all-in-one software suites?

SPEAKER_01 10:42

That is the million-dollar question.

SPEAKER_00 10:43

Because it's clearly not the payment processors building salon booking engines and restaurant floor plan apps. That's not what they do.

SPEAKER_01 10:50

No, it's not. The real architects of this new era are the ISVs.

SPEAKER_00 10:54

ISVs.

SPEAKER_01 10:55

Independent software vendors. These are the specialized tech companies actually writing the code for these merchant-specific platforms. And their influence in the market right now is just staggering.

SPEAKER_00 11:05

Aaron Powell Like how much influence?

SPEAKER_01 11:07

Well, as Ulysses points out, ISVs are often consulting with merchants to help them start and grow their business long before the merchant even opens a physical store.

SPEAKER_00 11:15

Wow, before they even have a location?

SPEAKER_01 11:17

Right. Before a gym owner signs a commercial lease or buys a single dumbbell, they are purchasing the ISV software that will govern their entire operation.

SPEAKER_00 11:26

Aaron Powell So the ISV essentially owns the merchant relationship from day one. Yes. Which means the payment provider just becomes a plug-in, like a feature, not the core product.

SPEAKER_01 11:35

Aaron Powell Ulysses actually uses the term building brick.

SPEAKER_00 11:38

A building brick.

SPEAKER_01 11:39

Yeah. In these ISV ecosystems, the payment simply comes as a building brick. The entire architecture of the software is designed around the daily operational interface of running a gym or a cafe.

SPEAKER_00 11:50

So the merchant experience is front and center.

SPEAKER_01 11:52

Exactly. It is specifically not designed around the payment. The payment is just one essential component slotted into the wall.

SPEAKER_00 11:58

Aaron Powell But wait, if these niche ISV markets are so lucrative and essential, why wouldn't a generalist tech giant like an Apple, Google, or Amazon just swoop in?

SPEAKER_01 12:09

That's a fair question.

SPEAKER_00 12:10

I mean, they could build a decent enough monolithic point of sale system and just crush these specialized ISVs with their sheer scale, couldn't they?

SPEAKER_01 12:18

Aaron Powell You would think so. But it's a classic battle of specialization versus generalization. And in this specific arena, the generalist usually loses.

SPEAKER_00 12:27

Aaron Powell Really? Why?

SPEAKER_01 12:29

Because a massive tech giant can build a beautiful functional payment terminal, sure. But they cannot handle the microfrictions of a hyper-specific vertical.

SPEAKER_00 12:40

Aaron Powell Give me an example of a microfriction.

SPEAKER_01 12:42

Okay. Think about a specialized gym ISV. It doesn't just process payments, it manages digital liability waivers, links them to family plan access fobs, tracks the maintenance schedule of specific treadmill models.

SPEAKER_00 12:54

Wow, okay.

SPEAKER_01 12:55

And even integrates with localized health insurance rebates.

SPEAKER_00 12:58

Okay, yeah. Apple is not going to build a future to track when a specific treadmill needs its belt replaced.

SPEAKER_01 13:04

Exactly. A horizontal tech giant simply won't dedicate the engineering resources to build liability waiver software for Pilates studios. The ISVs win on sheer depth.

SPEAKER_00 13:14

Which means the massive payment processors have absolutely no choice but to play nice with the ISVs.

SPEAKER_01 13:19

Not at all.

SPEAKER_00 13:19

They can't bypass them. So the new battleground for a company like Nexi Group isn't just fighting over basis points or transaction fees at the cash register anymore.

SPEAKER_01 13:28

No, it's all about deep integration.

SPEAKER_00 13:30

Deep integration.

SPEAKER_01 13:31

Integration is the entire game now. Now the old metrics still matter immensely, of course. Payment companies still have to negotiate pricing, commissions, revenue sharing, and they have to maintain strict SLA service level agreements.

SPEAKER_00 13:46

Right. The basics still have to work.

SPEAKER_01 13:47

Aaron Powell But the survival metric, the thing that actually keeps them alive, is how smoothly they can deliver their plumbing into foreign software environments.

SPEAKER_00 13:55

Into the ISVs.

SPEAKER_01 13:56

Yes. This requires building incredibly robust APIs so the payment processor's back end can talk to the ISV's front end without a millisecond of latency.

SPEAKER_00 14:06

And the margin for error there has to be, what, zero?

SPEAKER_01 14:09

Basically zero.

SPEAKER_00 14:10

Because if a gym's scheduling app crashes every single time it tries to ping the payment API to charge a monthful membership, the gym owner is going to blame the ISV.

SPEAKER_01 14:19

Of course.

SPEAKER_00 14:19

And then the ISV is going to drop the payment processor.

SPEAKER_01 14:22

Exactly. And the technical demands on these processors are only compounding. Consider digital onboarding.

SPEAKER_00 14:29

Oh, right. Setting up the account.

SPEAKER_01 14:31

Yeah. When a merchant signs up for the ISZ software, they shouldn't have to fill out 50 paper forms and wait a week to get approved for payment processing.

SPEAKER_00 14:39

No one has time for that anymore.

SPEAKER_01 14:41

Right. The API has to facilitate instantaneous, secure, digital underwriting so the merchant can accept their first credit card within minutes of downloading the app.

SPEAKER_00 14:51

Minutes. That's wild. And this isn't just happening in physical stores anymore, is it?

SPEAKER_01 14:55

Oh no, not at all.

SPEAKER_00 14:56

Because if a merchant has a brick and mortar boutique, but also an e-commerce website and like a social media storefront, the ISV has to unify all those channels.

SPEAKER_01 15:06

Yes, what they call unified omni-channel transactions.

SPEAKER_00 15:09

Right. And that has to be a headache to build.

SPEAKER_01 15:11

The complexity of omni-channel routing is just staggering. I mean, the inventory count has to be universally synchronized. So if someone buys the last blue sweater online, the physical store's point of sale system needs to instantly know that sweater is no longer available to sell to the person walking through the front door.

SPEAKER_00 15:30

Literally instantly.

SPEAKER_01 15:31

Instantly. And payment processors are now being asked to power cashierless environments, which honestly pushes the tech to its absolute limit.

SPEAKER_00 15:40

Aaron Powell Cashierless meaning those retail concepts where you um you just scan your phone at the door, grab your items, and just walk out the building.

SPEAKER_01 15:49

Aaron Powell Exactly those.

SPEAKER_00 15:50

There isn't even a physical terminal to tap your card against.

SPEAKER_01 15:53

Right. The payment processor has to figure out how to securely trigger a transaction through a phone app, relying purely on geofencing and computer vision as the customer walks out the door.

SPEAKER_00 16:04

Aaron Powell That sounds like magic, honestly.

SPEAKER_01 16:06

Aaron Powell It does. But the latency has to be virtually non-existent, and the data has to instantly feed back into the ISV's inventory system to restock the shelf.

SPEAKER_00 16:16

It sounds like an incredibly demanding, almost, I don't know, subservient role for the payment processors.

SPEAKER_01 16:21

There's a massive shift in ego, for sure.

SPEAKER_00 16:23

Aaron Powell Because they are doing the most highly regulated, technologically dangerous heavy lifting, managing international fraud, money laundering compliance, multi-currency routing, all just to be an invisible feature in someone else's software app. Why do they cede so much control to the ISVs?

SPEAKER_01 16:41

Aaron Powell Because it is a profoundly symbiotic relationship. The payment processors need the ISVs because the merchant demands a one-stop solution. Right. If the payment processor refuses to integrate as a building brick, they simply get locked out of the market entirely. The merchant won't buy a standalone terminal anymore.

SPEAKER_00 16:59

Aaron Powell Okay, but on the flip side, why doesn't the ISV just build their own payment processing tool?

SPEAKER_01 17:04

Good question.

SPEAKER_00 17:05

If they already built the complex scheduling and the inventory software, why not just build the payment pipes themselves and keep all the revenue?

SPEAKER_01 17:11

Because moving money across international borders is a legal and technical minefield. The regulatory burden of anti-money laundering laws, the constant arms race of fraud detection, the sheer server infrastructure required to guarantee authorization rates, it is a massive liability.

SPEAKER_00 17:28

Aaron Powell So they don't want to touch it.

SPEAKER_01 17:29

No. ISVs are software developers, not risk management banks. So by integrating specialized payment capabilities from companies like Nexi Group, the ISVs get to make their software incredibly sticky without taking on the regulatory danger.

SPEAKER_00 17:44

Sticky meaning the merchant relies on it so heavily they can't easily switch to a competitor.

SPEAKER_01 17:49

Exactly.

SPEAKER_00 17:49

Like if the software handles the client bookings, the payroll, and flawlessly processes the prepayments, ripping that software out would totally paralyze the business.

SPEAKER_01 17:59

It becomes the central nervous system of the operation. Combining brilliant vertical-specific software with flawless invisible payment plumbing creates an entirely unassailable product. Both sides absolutely need each other to achieve that.

SPEAKER_00 18:13

Wow. It completely reframes what is actually happening in our daily lives.

SPEAKER_01 18:17

It really does.

SPEAKER_00 18:18

The next time you are, you know, sitting on your couch prepaying for a haircut or finishing a great dinner and tapping your phone against a device the waiter brings to the table, you aren't just making a financial transaction. You're triggering a cascade of operational data. You're placing a tiny, perfect data brick into a massive wall. Trevor Burrus, Jr.

SPEAKER_01 18:38

The transaction itself is just a whisper in a much larger, continuous conversation between software systems.

SPEAKER_00 18:44

Right.

SPEAKER_01 18:44

It orders the extra shampoo for the salon, it tells the restaurant they need to order more tomatoes for tomorrow's service. The payment is really just the catalyst.

SPEAKER_00 18:52

Which leaves me with a final, somewhat provocative thought for you to ponder. Oh, I like these. If these payment companies and software vendors are this successful at their mission, I mean, if the physical act of paying becomes entirely invisible, seamless, and just integrated into the background of every app and physical environment we walk into, do we eventually lose the psychological weight of spending our money?

SPEAKER_01 19:16

Oh, wow. That's deep.

SPEAKER_00 19:18

Right. When the friction is completely eradicated and we no longer pull out a wallet or hand over physical cash, does the value of the dollar begin to feel different? Does money start to feel less real when it's just an automated background process in a cashierless store?

SPEAKER_01 19:32

It is a critical question about human psychology. I mean, as the technology achieves perfect efficiency, we really have to wonder what happens to our own awareness of consumption.

SPEAKER_00 19:42

Just something to keep in mind the next time your smartphone quietly absorbs yet another physical interaction from your world. Thank you for joining us on this deep dive into the invisible mechanics of commerce. We'll catch you next time.