When Executive Casts interviewed Michael Orlando, it was just over a month after he had been named to the Nxt-ID Inc.’s (NASDAQ:NXTD) Board on July 6, 2017, following the completion of the business combination with Fit Pay, Inc., which Orlando co-founded and served as Chief Executive Officer. Nxt-ID is a technology company focused on products, solutions and services for security on mobile devices.
In addition to his role on the Board, he now serves as Chief Operating Officer for Nxt-ID and President of Fit Pay, Inc. When we spoke with him he quickly pointed out that his vision for Fit Pay was to “create a payment experience that was frictionless, personalized and secure.” The synergy between Fit Pay and Nxt-ID becomes apparent through their mutual goal to evolve with the I0T space and tap into the growing demand for wearables and ease of payment. Mr. Orlando estimates at that by 2020, there could be nearly 400 million wearable devices with payment capabilities.
Below, in addition to discussing his own personal background, Mr. Orlando details:
- IoT overview and market opportunity
- Shifts and trends in IoT
- Fit Pay’s position in the value chain
- Competitive landscape for Fit Pay
- Vision for Fit Pay over the next 3 years
- The birth of his idea for Fit Pay
IoT Industry Overview and Market Opportunity
So, there’s going to be 30 billion IoT devices in the next four years. By 2020, if you look at the marketplace, that wearable marketplace just out of a small sector of that, it’s about five or six hundred million. Of those, just think specifically about payments, 65% of those wearable devices will have payment capabilities on there. So, that’s a pretty big market just in and of itself and then when you think about credential management every device that’s going to be out there will have to have security and the ability to manage those credentials on there. So to the extent that, we can develop our relationships with key players, we can have a really strong growth trajectory for the company.
Big Shifts and Trends in IoT
I think the shift from kind of where we are today to carrying all these things in our wallet or in our purses, is really going to move to a combination of both your smartphone and other devices that we have. I think with regard to payments, what’s been shown at least to date is that consumers don’t see that mobile payment experience. Like when I pull up my phone and launch an app and do all those things is transformative enough to provide those three kind of value missions that we strive to deliver which is the personalized, frictionless, secure experience. But you can do that with a wearable because it’s always on, I tap it and I go. So what we’re going to see is this massive adoption of that behavior that I believe consumers are going to embrace once they get active and introduced to it. The other thing you’re seeing is a very strong shift on behalf of the financial institutions to remove card data from the ecosystem and to ensure and provide streamlined systems for secure contactless payments. And their mission is, in a way that those companies are going to grow, to keep innovating on the security aspects of that and then to partner with teams like with companies like ourselves that can innovate on the experience side.
Fit Pay’s Position in the Value Chain
So, the relationship is between whoever has made the device and the consumer. We sit in the background and our solution is completely white labelled, so, there’s not really a consumer facing an exposure to Fit Pay other than briefly in our terms and conditions. So, that experience is all inside that device manufacturer’s application. It’s branded, has the same look and feel, so, the consumer has the feeling and the understanding that they’re interacting with who they bought the device from. Where we can take over is in the execution of that experience on behalf the device manufacturer. So, all the technology sits inside of that, the user flows and what happens when they go to board their card or provision their card is all our technology that we layer up and provide through that app experience of the device manufacturer.
Competitive Landscape for Fit Pay
So, today the biggest providers, most recognizable names are Apple, Google, and Samsung, all with all the Pays attached; wel,l in the case of Google’s Android Pay. But all the Pays attached to those. So, Fit Pay is the first global independent platform to integrate into them. There’s others in the queue, some there are unique just individual devices, others are other types of service providers that aren’t specific in our space, not targeting to where one IoT space.
In the case of all the three that I mentioned, so Apple’s only on Apple, iPhone and an Apple Watch, not really extending their service out. Samsung, similar to that; and Android is only on Android phones today. Our customers are really those that compete with Apple and Samsung in the wearable space, in IoT space, potentially the whole hand set space and those that have their own operating system. So, we’ve really kind of carved out…where not competing directly with them, but we’re enabling companies that want to be more effective in competing against them.
Vision for Fit Pay over the Next 3 Years
The industry itself is very nascent. So, IoT is very nascent and hyper rounded, I’m a firm believer that’s going to happen. I think there’s no doubt that we’re surrounded by connected devices today – the Alexa Echo’s success has been a great example of that. It’s going to extend into other types of things where we believe we can play a key role there and I think for us we want to own as big a chunk of the space as we can. I think we’re at the advantage right now of being first to market in terms of payment use-case and payment connectivity, to the extent that we can keep that leadership position and extend into other use cases like security and in transit and others. We will continue to own a space, I think, and then delivering a great experience to our customers – we’ll keep them in and lining ourselves with the right partners. We’ll keep that business growing, we’ll grow as they grow and continue to contribute to our collective capabilities.
Mike’s Background and Career, Conception of Fit Pay
I spent the last 18 plus years in the payment space since I have really deep knowledge on payment security, transaction management, that type of thing. I was in a company called CyberSource, I was there for total 13 years, but the first 10 were in an independent organization and had a really accelerated growth career through there. But the last four or five was SVP of global sales and services, helped grow the company from about 35 million in revenue to 350 million in revenue globally. It built up our global footprint so took us from a US-Centric to Europe, Asia, South America, Latin America to a little bit in the Middle East. We sold that company [CyberSource] to Visa in 2010 for $2 billion; it was Visa’s first acquisition post going public. A very visible acquisition for them was a 43% lift on our share price at the time because we were a publicly held company. So, we got a big return from our investors, nice return for some of our employees, some of our executives. Then I stayed on a Visa for about two and a half years working on the integration and continued to develop there, go to market strategy around merchants because those were our primary customers. Then, I left and did some consulting and a couple of start-ups as an executive with some companies in Silicon Valley and then had the idea for Fit Pay. I mean it really came from kind of observations that I had and knowing what was going on in the mobile payment space. Kind of seeing some early failures, the soft card initiative by AT&T, Verizon and a couple of banks didn’t go so well. That was the most visible one; they spent about $200 million or more trying to get that business off the ground.
How Orlando Conceived The Idea For Fit Pay
To my point earlier, I really came down to, in my view, they weren’t transforming their consumer experience enough. I was out on a bike ride with a friend of mine, had a Fitness SmartWatch on and that was tracking my riding activity and did the GPS stuff for me. I won’t name the brand…and stopped for a beer with a friend of mine, that was our plan – 23 mile ride, 20 ounce beer. I had a Ziploc bag in the back of my jersey that had a $20 bill, my ATM card, my cell phone and a protein bar. It was about an 85 degree day as I live out in Northern California and that protein bar melted all of that stuff in my bag. So, all I had was this chocolate goo so I had no way to pay. I said to a friend of mine, “You know this is ridiculous. I shouldn’t have to carry all this stuff with me just to pay for this beer, I should just pay with this, because it knows who I am, it knows where I am, it’s got the ability to interact with things […]. That was really the first idea, so, I went home and you start the whiteboard stuff out and you think about, “Hey, what could this be.” And came up with the idea of Fit Pay which was putting payment credentials and allowing people to pay what their wearable. Recruited a friend of mine and co-worker that worked along with me at CyberSource to be our CTO. My brother helped me developed the business idea so, he joined as well. And we were off to the races – that was three years ago.
Michael Orlando Director and Chief Operating Officer of Nxt-ID, Founder of Fit Pay
Michael Orlando is Nxt-ID’s Chief Operating Officer. Mr. Orlando founded Fit Pay, Inc. in September of 2014. Prior to founding Fit Pay, Mr. Orlando served in numerous roles at payment, authentication, and software-as-a-service companies. From September 2012 — September 2014, Mr. Orlando served as Chief Sales Officer at Jumio, Inc; a leading mobile identify verification solution provider. In 2012, Mr. Orlando served as Senior Vice President, Sales and Marketing at EZ Prints, Inc., an online merchandise printing and fulfillment services company. From September 2000 to February 2012, Mr. Orlando served as Senior Vice President, Global Sales and Services at CyberSource Inc., a leading e-commerce and credit card systems management company, where he oversaw all enterprise sales and professional services functions worldwide.
Mr. Orlando holds Bachelor of Science degree in Management from California Coast University.