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Mar 18, 2018 · 18m · top-founders

967 With $1b+ In Transaction Volume, He Helps Merchants Get Power of Amazon Checkout

Ralph Dangelmaier · 10m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews BlueSnap CEO Ralph Dangelmaier about scaling an all-in-one payment processing gateway to billions in transaction volume. Ralph discusses BlueSnap's local acquiring competitive advantage over Stripe, the company's $170 million in funding, and the complex unit economics of payment processing margins.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 40.2% of the talking time here. How this is scored →

Nathan as informed peer 4.6 Guest teaching 3.2 Guest disagreement 1.4 Nathan pushing back 3.0
05100:0010:003:13–6:10 · Nathan as informed peer 5/10 BlueSnap's Competitive Edge Over Stripe and Global Acquiring Strategy Nathan presses Ralph to explain specifically how BlueSnap differentiates from Stripe and translates Ralph's percentages into concrete dollar figures. Ralph educates Nathan on local payment acquiring and why routing transactions through local banks increases approval rates.6:10–8:46 · Nathan as informed peer 3/10 The Founding Story of BlueSnap and Corporate Spin-Off Nathan challenges Ralph's decision to drop an executive role on a whim to join an Israeli spin-off. Ralph politely corrects Nathan's claim that he was CEO (he was president) and outlines the shift toward mobile commerce.8:47–12:45 · Nathan as informed peer 4/10 Sponsor Break: Acquisition of The Top Inbox Following an ad read, Nathan brings up search fund equity standards and repeatedly prods Ralph to disclose future transaction volume targets. Ralph deflects forward-looking private company targets diplomatically.12:46–16:14 · Nathan as informed peer 7/10 The Economics of Payment Processing and Interchange Fees Ralph explains the payment processing stack and interchange fee distribution between issuing banks and card networks. Nathan demonstrates sharp financial acumen by immediately calculating BlueSnap's exact take-home margin of 10 to 20 cents on a $100 purchase.16:16–18:46 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Q&A with Ralph Dangelmaier Nathan conducts the standard Famous Five rapid-fire questions and summarizes BlueSnap's business model. Ralph shares his hobby of teaching fintech courses at universities to address widespread knowledge gaps in payments.3:13–6:10 · Guest teaching 4/10 BlueSnap's Competitive Edge Over Stripe and Global Acquiring Strategy Nathan presses Ralph to explain specifically how BlueSnap differentiates from Stripe and translates Ralph's percentages into concrete dollar figures. Ralph educates Nathan on local payment acquiring and why routing transactions through local banks increases approval rates.6:10–8:46 · Guest teaching 3/10 The Founding Story of BlueSnap and Corporate Spin-Off Nathan challenges Ralph's decision to drop an executive role on a whim to join an Israeli spin-off. Ralph politely corrects Nathan's claim that he was CEO (he was president) and outlines the shift toward mobile commerce.8:47–12:45 · Guest teaching 1/10 Sponsor Break: Acquisition of The Top Inbox Following an ad read, Nathan brings up search fund equity standards and repeatedly prods Ralph to disclose future transaction volume targets. Ralph deflects forward-looking private company targets diplomatically.12:46–16:14 · Guest teaching 6/10 The Economics of Payment Processing and Interchange Fees Ralph explains the payment processing stack and interchange fee distribution between issuing banks and card networks. Nathan demonstrates sharp financial acumen by immediately calculating BlueSnap's exact take-home margin of 10 to 20 cents on a $100 purchase.16:16–18:46 · Guest teaching 2/10 The Famous Five Rapid-Fire Q&A with Ralph Dangelmaier Nathan conducts the standard Famous Five rapid-fire questions and summarizes BlueSnap's business model. Ralph shares his hobby of teaching fintech courses at universities to address widespread knowledge gaps in payments.3:13–6:10 · Guest disagreement 1/10 BlueSnap's Competitive Edge Over Stripe and Global Acquiring Strategy Nathan presses Ralph to explain specifically how BlueSnap differentiates from Stripe and translates Ralph's percentages into concrete dollar figures. Ralph educates Nathan on local payment acquiring and why routing transactions through local banks increases approval rates.6:10–8:46 · Guest disagreement 2/10 The Founding Story of BlueSnap and Corporate Spin-Off Nathan challenges Ralph's decision to drop an executive role on a whim to join an Israeli spin-off. Ralph politely corrects Nathan's claim that he was CEO (he was president) and outlines the shift toward mobile commerce.8:47–12:45 · Guest disagreement 2/10 Sponsor Break: Acquisition of The Top Inbox Following an ad read, Nathan brings up search fund equity standards and repeatedly prods Ralph to disclose future transaction volume targets. Ralph deflects forward-looking private company targets diplomatically.12:46–16:14 · Guest disagreement 1/10 The Economics of Payment Processing and Interchange Fees Ralph explains the payment processing stack and interchange fee distribution between issuing banks and card networks. Nathan demonstrates sharp financial acumen by immediately calculating BlueSnap's exact take-home margin of 10 to 20 cents on a $100 purchase.16:16–18:46 · Guest disagreement 1/10 The Famous Five Rapid-Fire Q&A with Ralph Dangelmaier Nathan conducts the standard Famous Five rapid-fire questions and summarizes BlueSnap's business model. Ralph shares his hobby of teaching fintech courses at universities to address widespread knowledge gaps in payments.3:13–6:10 · Nathan pushing back 3/10 BlueSnap's Competitive Edge Over Stripe and Global Acquiring Strategy Nathan presses Ralph to explain specifically how BlueSnap differentiates from Stripe and translates Ralph's percentages into concrete dollar figures. Ralph educates Nathan on local payment acquiring and why routing transactions through local banks increases approval rates.6:10–8:46 · Nathan pushing back 4/10 The Founding Story of BlueSnap and Corporate Spin-Off Nathan challenges Ralph's decision to drop an executive role on a whim to join an Israeli spin-off. Ralph politely corrects Nathan's claim that he was CEO (he was president) and outlines the shift toward mobile commerce.8:47–12:45 · Nathan pushing back 4/10 Sponsor Break: Acquisition of The Top Inbox Following an ad read, Nathan brings up search fund equity standards and repeatedly prods Ralph to disclose future transaction volume targets. Ralph deflects forward-looking private company targets diplomatically.12:46–16:14 · Nathan pushing back 3/10 The Economics of Payment Processing and Interchange Fees Ralph explains the payment processing stack and interchange fee distribution between issuing banks and card networks. Nathan demonstrates sharp financial acumen by immediately calculating BlueSnap's exact take-home margin of 10 to 20 cents on a $100 purchase.16:16–18:46 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Q&A with Ralph Dangelmaier Nathan conducts the standard Famous Five rapid-fire questions and summarizes BlueSnap's business model. Ralph shares his hobby of teaching fintech courses at universities to address widespread knowledge gaps in payments.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 52.9% · guest 47.1%0:00 · Nathan 52.9% · guest 47.1%3:00 · Nathan 18.2% · guest 81.8%3:00 · Nathan 18.2% · guest 81.8%6:00 · Nathan 27.6% · guest 72.4%6:00 · Nathan 27.6% · guest 72.4%9:00 · Nathan 62.9% · guest 37.1%9:00 · Nathan 62.9% · guest 37.1%12:00 · Nathan 35.5% · guest 64.5%12:00 · Nathan 35.5% · guest 64.5%15:00 · Nathan 33% · guest 67%15:00 · Nathan 33% · guest 67%18:00 · Nathan 83.9% · guest 16.1%18:00 · Nathan 83.9% · guest 16.1%
Sharpest disagreement ▶ 7:24 Ralph corrects Nathan's framing of his career move

Ralph firmly corrects Nathan's assertion that he was a CEO abandoning a public company, clarifying his actual title was president and outlining the strategic rationale.

 Hardest push from Nathan ▶ 12:28 Nathan prods Ralph on crossing the $5B mark

Nathan refuses to accept Ralph's vague growth statements and aggressively nudges him to commit to a $5 billion transaction target.

 Biggest teaching moment ▶ 14:40 Ralph explains why issuing banks take the lion's share

Ralph breaks down the difference between issuing banks like Chase and network brands like Visa, explaining who shoulders default liability.

 Nathan holds their own ▶ 15:42 Nathan calculates BlueSnap's net economics on the fly

Nathan synthesizes the entire fee breakdown in real time to deduce that BlueSnap only keeps 10 to 20 cents of pre-overhead margin on a $100 sale.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
BlueSnap's Competitive Edge Over Stripe and Global Acquiring Strategy 5413 Nathan presses Ralph to explain specifically how BlueSnap differentiates from Stripe and translates Ralph's percentages into concrete dollar figures. Ralph educates Nathan on local payment acquiring and why routing transactions through local banks increases approval rates.
The Founding Story of BlueSnap and Corporate Spin-Off 3324 Nathan challenges Ralph's decision to drop an executive role on a whim to join an Israeli spin-off. Ralph politely corrects Nathan's claim that he was CEO (he was president) and outlines the shift toward mobile commerce.
Sponsor Break: Acquisition of The Top Inbox 4124 Following an ad read, Nathan brings up search fund equity standards and repeatedly prods Ralph to disclose future transaction volume targets. Ralph deflects forward-looking private company targets diplomatically.
The Economics of Payment Processing and Interchange Fees 7613 Ralph explains the payment processing stack and interchange fee distribution between issuing banks and card networks. Nathan demonstrates sharp financial acumen by immediately calculating BlueSnap's exact take-home margin of 10 to 20 cents on a $100 purchase.
The Famous Five Rapid-Fire Q&A with Ralph Dangelmaier 4211 Nathan conducts the standard Famous Five rapid-fire questions and summarizes BlueSnap's business model. Ralph shares his hobby of teaching fintech courses at universities to address widespread knowledge gaps in payments.

Statements from this episode (10)

Assertion Partly supported
Dangelmaier: Amazon lacks patents on one-click checkout with major credit cards
“Well, how we're different is the Prime and the one click, they have patents on that, but they don't have the patent on how to one click checkout with things like Visa, MasterCard, or using American Express.”
Ralph Dangelmaier Mar 18, 2018 ▶ 1:51
Assertion Not checkable as stated
Dangelmaier: BlueSnap achieves higher global transaction approval rates than Stripe
“Where we differ from Stripe is we're much more global, so we actually have many banks around the world so we can actually help transactions get through at a higher rate than Stripe does.”
Ralph Dangelmaier Mar 18, 2018 ▶ 3:13
Insight
Dangelmaier: Local payment acquiring produces higher card authorization rates than cross-border routing
“If you can keep the card transactions as local as you can, and this is a little loan seeker that people don't know about payments acquiring, you're going to have a higher chance of getting your card accepted. So for example, if I'm a shopper in Germany and I s…”
Ralph Dangelmaier Mar 18, 2018 ▶ 3:45
Assertion Supported
Dangelmaier: BlueSnap charges generally the same rates as Stripe
“We charge generally the same rates that Stripe does in this market.”
Ralph Dangelmaier Mar 18, 2018 ▶ 5:09
Disclosure
Dangelmaier: BlueSnap fees range from under 1% to under 2.9%
“So people will charge the lowest fee you charge or things like debit cards where you're paying a little bit below one percent. And when you're paying card to card, you're paying under 2.9%.”
Ralph Dangelmaier Mar 18, 2018 ▶ 5:26
Disclosure
Dangelmaier: BlueSnap volume discounts kick in at millions in monthly volume
“Usually when you start getting to a couple million dollars a year but really they kick in pretty big when you're starting to do a couple million a month.”
Ralph Dangelmaier Mar 18, 2018 ▶ 6:01
Disclosure
Dangelmaier: BlueSnap raised $170M over five years
“So the additional cash point in the company was a hundred million dollars. And then after that we've announced that we've raised another seventy million dollars. So it takes quite a bit. That's what happened now over about five years.”
Ralph Dangelmaier Mar 18, 2018 ▶ 10:33
Assertion Not checkable as stated
Dangelmaier: BlueSnap has about 5,000 active merchants
“Yeah, so we're up to about 5000 merchants that are using our product right now and growing very quickly.”
Ralph Dangelmaier Mar 18, 2018 ▶ 11:56
Assertion Not checkable as stated
Dangelmaier: BlueSnap processes billions with triple-digit YoY volume growth
“We're already in the B range, and we'll be processing multiple times that we're growing a triple digit growth right now.”
Ralph Dangelmaier Mar 18, 2018 ▶ 12:19
Assertion Supported
Dangelmaier: Card-Issuing Banks Collect 1.5% to 2% on Card Transactions
“The biggest piece of it, anywhere from one and a half to two percent of that transaction is going to go to the person that issued the card, the Chase, the Capital One.”
Ralph Dangelmaier Mar 18, 2018 ▶ 13:58
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