What does it take to build a global payments platform from scratch with just a vision and an idea? How do you go about hiring a world-class product team? What mindset is needed to build a solution from the ground up? How do you pay out millions of dollars to over 20,000 athletes in 70+ currencies in 100+ countries? We sat down with Ronak Desai, Co-Founder and CTO of Payment Labs, to understand the journey to build a payments platform that is disrupting an industry. Let’s take a journey into the mind of a Chief Technology Officer who innovates at scale to understand how he built the platform and its impact.
Desai has been in the tech world since a young age, always intrigued by using computers and how things work. As an inquisitive child, he would take everything apart to see how it worked, including toys, remote-controlled cars, and anything he could get his hands on. It was fascinating for him to understand the mechanics of how anything was built. When Desai got his first computer, he started to play video games and was intrigued by how the games worked. He started figuring out how to do automation through computer programming so that games were played automatically while he was at school. For example, RunScape was a Java game, and he didn’t want to waste his time to level up his character manually. Instead, he would program a bot to play for him while he was at school. When he came home, the bot had leveled up his game character, and he was ready to play the game where Desai wanted his character to be that was meaningful in the game’s progress.
Fast forward a decade, and Desai, while still in high school, meets Han Park, an entrepreneur and investor helping build the esports scene. At the time, Park was running ESS Agency, an agency in New York servicing companies in the video games industry. Park hired Desai to handle the technology components of client projects and help build custom software to better organize and execute events. While there, the two realized firsthand the inefficiencies that arise when esports tournament organizers have to make prize money payments. They recognized that there was a need for a holistic and automated solution that could solve this complex problem. They also saw it would have to be built from the ground up to address the nuances of the esports industry. Years later in 2019, Park partnered with Desai’s tech expertise that made the two a perfect match to co-found a new company to solve the payment problems in esports.
The first part of starting the company was understanding what they were trying to solve and why. The why was that they needed to get prize money paid out to winners, as that is a constant in esports as prize money is directly related to the scale of esports events and tournaments. A lot of gamers participate in video game competitions online or in person. The organizers and sponsors then need to pay out the announced prize money for these competitions to hundreds and thousands of winners from all over the world. Similar to professional traditional sports, the top part of the pyramid is easy to deal with because few players are winning large amounts of money so an organizer or a league can deal with it manually. But if you go towards the bottom of the pyramid and there is a tournament with hundreds and thousands of competitors that need to be paid out, it takes a lot of work and resources. That was the starting point for building the Payment Labs solution.
The next part was tackling how to build a software solution that can streamline and automate the entire payment flow from registering winners to paying the prize money in the method that the winner can receive. This required the software to automate and collect accurately what information was needed from the prize winners and streamline the collection process to make it quick and easy for prize winners. To build the software, Desai leveraged what he had done in the past with user sign-up, registration, and data collection. The more challenging part became what information needs to be collected regarding banking and tax information to be compliant. This led to further compliance-related requirements that included security, privacy, and use of this data for the payment process. That’s when the ball started rolling with Desai delving into fully understanding fintech and using technology to transform the financial industry and services.
Desai’s motive for creating anything is to push back and say, “Why?” Because as he says, “What happens if someone tells you to build something, and then it’s wrong? Then, you have to rebuild it again. His philosophy is “You don’t make a house and then say, I don’t like the foundation. Let’s tear it down and do it all over.” That is why he wanted to build the product from the beginning and make sure it was built on solid reasoning and requirements. Park and Desai knew the objective: enable customers to pay anyone in the world compliantly and efficiently. So, Desai needed to build a solution that could do this. He also had to do this in a way that is the easiest experience for both the customer and the person receiving payment while simultaneously getting relevant and accurate information that works for the Internal Revenue Service (IRS) and the bank partners. The bank partners also need to comply with the Bank Secrecy Act (BCA) which includes items such as Know Your Customer (KYC), Know Your Business (KYB), Anti-Money Laundering (AML) verification and the Customer Identification Program (CIP) so the solution had to take this into account. The answer was to thoroughly understand the banking and payment world, regulations, and tax compliance to build a solution to streamline and automate the entire payment process that removes the complexities of compliance and the current manual inefficiencies.
Not everyone sees a problem and thinks of building a software solution. However, Desai’s skill set and how his mind works is to see a problem and immediately start solving it. His solutionizing is to determine different paths that he can take to solve each obstacle. His problem-solving ability starts clicking immediately in his head as soon as he sees a potential solution. If he sees a physical product, his brain will automatically begin unpacking how it was made by default. It’s the same process when he sees a payment obstacle being presented. He will immediately start solutionizing based on his knowledge and then research whatever is relevant to that problem. He will read beyond the immediate scope and figure out what needs to be done. With all the research and knowledge gained, he will start piecing together how things must work to solve the challenge. He does a lot of proof of concepts himself before assigning his engineering team to build the solution into the product. This allows him to solve any problems they may encounter before the project starts, and why he was the perfect fit to engineer the platform.
As the Payment Labs solution started working and solving the pain points in prize money payments in the esports industry, Desai realized the impact of the solution that the team was building would be huge. The problem the team was solving wasn’t just about getting gamers worldwide their prize money payments efficiently and compliantly. Desai and his team discovered that the solution they were building for esports allowed any business to pay anyone anywhere. Whether they were contractors, prize money winners, gig workers, or content creators, the platform could pay anyone in a straightforward and compliant way. The team then expanded the product and broadened it instead of only focusing on esports. They came across similar use cases and pain points in adjacent vertical industries, including traditional sports, the creator economy, and production agencies that needed an effective payment solution to address the pain points in their use cases. The vision expanded, and then it expanded into adding additional payment methods. The platform could offer more than just a bank transfer; it could provide customers with more convenient and faster methods, such as a prepaid debit card, a gift card, and real-time payments such as push-to-card. This is where the impact started to increase as the scale of the opportunity broadened.
Desai’s approach to building a product is similar to the traditional motto in the tech world: “Move fast and break things.” Desai believes you want to uncover and resolve as many problems as quickly as possible. However, there is a caveat due to the nature of the payments business, where stability and reliability are needed. For example, one can’t misplace a decimal or lose a few cents here and there, so there needs to be a different mindset. Ensuring the product is reliable and stable is always vital to making payments. When a customer clicks “Pay now,” they expect that payment will go out the door, not that it will go out the door two days or a week later. Desai would expect the same from all payment partners worldwide. The same is required when filing taxes and on behalf of customers: they expect it to be filed accurately and never late.
So, how does a Co-founder and CTO build a world-class engineering team to create an industry-leading payment platform? As Desai says, there are many talented people out there, but you need to find a mixture of talented people passionate about the challenge you’re trying to tackle. In the startup game, you won’t perform your best work if you’re not interested in the problem you’re trying to solve. It’s a high-stress environment building a product from scratch. Startup life is not for everyone, so you must ensure the talent fits into the atmosphere. To create a world-class engineering team in a startup, you have to convince the talent of the broader vision, how big the problem is, and all the challenges that their talent and skills can solve. Desai believes what draws a lot of top engineering talent are the following: they are solving a large-scale, complex problem; they are passionate about wanting to be a part of solving it; they are integral to how the solution to the problem will be tackled; and they can see the actual results of their work.
Desai always had a remote-first mentality when building the team because there were talented people all over the world. Also, if you are to be a global payment company, why not have talent from all around the world? Further, if you have a difficult area of the world to make payments, why not bring on local talent that can give context to the problem? That’s what led Payment Labs to create the best solution to make payments to Brazil with talented Brazilian engineers and team members on the team. Desai credits the success of the payments platform to the talented engineering team that he leads who are indeed the best in the world.
Desai says the “Aha!” moment in his journey to build the platform was realizing there was no one-size-fits-all payment partner in the world. He needed to find partners in each country and region and build an entire payments network that could do what he needed. If he could do this, he could solve one of the biggest problems because anyone, anywhere, needs to get paid. He also saw the mass potential of the first non-esports business using the platform to pay an individual internationally and the impact the company could have on disrupting legacy ways of making cross-border payouts. Customers could now succeed by scaling their own businesses, as there were no longer restrictions on which countries they could quickly and compliantly pay.
Desai quickly realized that compliance and regulations are the bedrock of the payment world and that the Payment Labs solution needed to be built around this foundation. Regulations exist, but many are open to interpretation and not always black and white. One financial partner may say yes, while another may say no to the same regulation and compliance requirements. This adds complexity to payments that Desai had to consider when streamlining much of the payment process for the Payment Labs product.
The impact that the Payment Labs platform is making in the payments world is undeniable. In addition to automating and streamlining payments that save time and money for customers, the platform holds all the sensitive personal information payment data. This mitigates the risk for customers on privacy and security requirements of various data privacy regulations. Customers can make payments quickly and easily with just a verified email of the person they need to pay, and all steps of information collection and verification in the process are automated. The product that Desai’s team built is holistic, compliant, and efficient, with multiple payment methods. Desai is also proud of unique product features, such as the platform integration with the Internal Revenue Service (IRS) to automatically do filings, withholdings, and remittances to the IRS on behalf of customers. This is something unique to the Payment Labs platform and another differentiator Desai engineered.
These days, Desai is focused on adding more payment methods to the platform that allow people to get paid faster or are more convenient, such as real-time cross-border payments and push-to-card within the U.S. As Desai says, “Just because that’s how it always has been done doesn’t mean it has to stay that way.” If you’re Desai, you innovate and keep pushing the ball forward. It’s a mixture of confidence, hubris, and raw passion, and that’s what it takes to disrupt the world of payments. He wants to build a better solution to make global payments simple. The journey for Desai and team continues to build the Payment Labs platform to enable any business to pay anyone, anywhere in the world.
Interested in seeing how the platform works in action? Book a time with the Payment Labs team here.