Q&A With SegPay's Cathy Beardsley

Rhett Pardon

It didn’t take long for SegPay CEO Cathy Beardsley to turn the startup high-risk biller into a profitable company. After all, Beardsley’s a veteran processing executive who has more than a dozen years of experience leading and managing payment processing companies. At SegPay, Beardsley oversees the day-to-day operations and long-term strategic planning for SegPay, a top brand in the U.S. and Europe, with a humble, hands-on approach.

Since 2005, SegPay has offered webmasters a billing platform that provides real time credit card, direct-debit and check authorization services; automated password management systems, marketing tools, real-time sales reporting and an online interface that makes account changes easy.

The more open we are with our merchants, the more open they are with us, the better. This transparency allows us to work together solving problems, enhancing our system and overall allowing the partnership between processor and merchant to be extremely productive for both parties.

XBiZ World last month sat down with Beardsley to find out more about how SegPay has become a market leader in this Presidential Suite interview.

XBIZ: What are some of the most valuable lessons you have learned about adult billing?

BEARDSLEY: There are no shortcuts or get rich schemes; your business needs to be earned and always play by the rules. I have seen time and time again, companies (merchants, payment processors and acquirers) that have opted for short-term gains at the expense of consumers causing them to go out of business and face serious fines and penalties. Trust your clients and they will trust you. I believe that most billers tend to be very secretive about their business. I see a lot of payment processors that don’t communicate to clients how transactions are handled or who they are working and partnering with to handle transactions. At SegPay, it’s all about transparency. The more open we are with our merchants, the more open they are with us, the better. This transparency allows us to work together solving problems, enhancing our system and overall allowing the partnership between processor and merchant to be extremely productive for both parties.

Work closely and openly with acquirers and the card schemes. SegPay has learned that starting and having an open dialogue with acquirers and the card schemes is very beneficial to our business. It allows for our company to work through complicated compliance changes that often make sense only to Visa and MasterCard and nobody else involved. SegPay’s open dialogue with acquirers and the card schemes allows us the opportunity to work through compliance issues that impact payment processors and high-risk merchants to find solutions so everyone can win.

XBIZ: As CEO of SegPay, what are some of the biggest challenges that you face in a typical week?

BEARDSLEY: Every week, I challenge myself to focus on something strategic that is going to benefit our clients and the company for the long-term. It is easy to focus on tactical issues that provide an immediate impact, but in order for the company to stay viable and successful, we really need to think ahead. I hold myself and staff accountable for the goals we set out to achieve. It is important to manage priorities and keep the team focused on projects that move the company forward. It is easy to get distracted by something that will potentially have an immediate revenue impact but staying focused on the bigger picture can generate an even bigger revenue impact down the road.

Balancing investments in the company as well as meeting shareholders expected returns is an important focus for the company. In order for the company to grow by leaps in the next few years, it is important that SegPay invest now in the resources to get us there.

Being a CEO can feel like you are on an island. You often question if you are making the right decisions and if you are heading in the right direction. For me, it has been really helpful to leverage other business professionals and key business partners with different experiences and backgrounds. These relationships have been instrumental in motivating me to try different concepts to push SegPay and myself outside of our comfort zones. It’s great to get insight that helps affirm that the company is on the right track.

XBIZ: Adult billing is a field with a lot of competition. What are some of the things that make SegPay stand out in such a competitive field?

BEARDSLEY: You get paid before we do! We are the only IPSP/PF that has our entire client funds held at the acquiring bank and paid directly to our merchants. This ensures we are safeguarding client funds.

Our company’s transparency allows us to share and communicate information with our clients. We share information on what they need and want to know about the payment industry and that differentiates our business from everyone else. For instance, SegPay is the only IPSP/PF that actually discloses who our Acquires are to our merchants.

We are one of the few IPSP/PF that have invested in earning our Payment Institution License in Europe. This is EU legislation that requires anyone handling transactions and money to register and meet a series of compliance hurdles in order to earn their license. Without this license, we could be required to cease processing in Europe.

We are young and continually investing in our system and infrastructure. This helps us put out a good quality product that is meeting the current needs of our clients.

We have been in business for close to 10 years and have earned a solid reputation and the trust of high-risk merchants. That’s something a lot of IPSP/PFs can’t say.

We have a hands-on-approach. Everyone at SegPay is accessible to our clients. There are no layers you need to wade through to speak to me, our CTO or any other staff member at SegPay.

XBIZ: What advice do you give other company leaders in maintaining a tight team of loyal staff?

BEARDSLEY: It is important to create clarity within the organization and openly communicate with your staff on priorities and goals so everyone is in the loop on where the company is heading. This also means communicating to your staff when there are issues or problems that need to be addressed as team.

Listen! Everyone at SegPay is smarter than I am and I learn something every day. Listening to the staff helps develop areas of focus for our strategic plan. It helps combat any concerns or issues a staff member might have about the company.

I am super fortunate to have such a wonderful staff, as many of our staff members have been here since day one. They have invested so much of their time and effort making SegPay successful, I truly feel indebted to all of them.

It takes a lot of effort and is a waste of resources to keep churning through staff members. It is much easier for SegPay to be successful if we have tenured staff all working towards the same goal.

XBIZ: Many in the adult industry predict substantial growth in the mobile sector. From a billing standpoint, do you see substantial growth and what steps must companies take to be as mobile-friendly as possible?

BEARDSLEY: We are currently seeing over 60 percent of our pay page hits coming from mobile devices. So at the moment, we are fully focused on helping our clients capture more of the mobile market. Mobile billing is still very credit card centric. We want to focus on streamlining the checkout process to make it easy for consumers to purchase on mobile units. Utilizing Remember Me functions and other EZ click checkout options are the best ways to effectively convert mobile traffic. It is also important for Webmasters to have device responsive payment pages for consumers.

We realize our Webmasters are mobile too. That’s why we are starting to mobilize client reports to give them access to stats at any time or any place.

XBIZ: On the whole, how knowledgeable do you find American webmasters to be when it comes to billing in foreign markets? How great is their understanding of non-U.S. billing needs, and what steps do you take to educate them?

BEARDSLEY: I find our U.S. webmasters to be extremely knowledgeable. I believe most understand what is needed to convert European and other ROW traffic. They also understand that there is an investment that needs to be made to localize programs for the foreign market. Webmasters need their payment processing partner to provide a solution to help them convert site traffic to sales by offering pay pages with local currency options.

I believe U.S. webmasters struggle a bit with the regulatory requirements of Europe and other regions around the world. This is an area where we spend time educating and helping our clients who are preparing to expand into foreign markets.

XBIZ: In what ways do you see SegPay evolving in the coming years? What changes in the adult billing space do you foresee, and what steps will SegPay take to address them?

BEARDSLEY: We don’t see a lot of mandated changes in the high-risk processing space in the coming years. I think the industry has done a great job of policing itself and making sure it is has a reputation for treating consumers responsibly.

We do see our clients needing more and more flexibility through our system in order for them to grow their future business. Here’s what we’re currently working on to improve our system:

  • Creating effective solutions for low transaction purchases such as clips, apps and music;
  • Making it easier for our Webmasters to share traffic and network their programs together;
  • Being open to non-traditional forms of payment/virtual currency as a checkout option; and,
  • Expanding payment solutions to capture the growing markets of Asia Pacific, Latin America, the Middle East and Africa.

XBIZ: What are some of the things that make the adult billing field exciting for you?

BEARDSLEY: Our industry is young and innovative. There is always something new to learn, to tackle and become a part of. Every year there is a new “IT” program that excites the market. Those are the programs that push us to think about expanding and evolving our billing solutions.

XBIZ: What inspires you in business?

BEARDSLEY: I love what I do and the people I work with. SegPay is very personal to me. I view how the company behaves and treats our clients, consumers, acquiring partners and the Card Associations as an extension of who I am. Dedicating time and energy to the company and seeing us succeed is incredibly rewarding. It is what keeps me pushing myself and everyone around me.

XBIZ: When not thinking about the biz, what do you like to do? And how do you balance work with family life?

BEARDSLEY: When not thinking about work, it is all about my family. I have a husband and three kids — ages 12, 8 and 7. As anyone with children in those age groups knows, it is non-stop with school, sports and friends. It can be a little tiring, but I feel very fortunate to have it all!

I do love to workout and that’s typically how I start my day. I am also trying hard to carve out one afternoon a month to golf with my husband. That is always fun and give us at least 4 hours of alone time to laugh and just relax on the course!


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