Oz Azaria Empowers Merchants Through His Business Platform, Hoox | Biz To Biz Podcast

Welcome to the Biz to Biz Podcast, your number one source for all business news. Hey everybody, welcome to today's episode of B2B Vault, the Biz to Biz Podcast, sponsored by Nationwide Payment Systems and our new product NPS One, which is super exciting. Do all your credit card processing, ACH payment links, all in one portal with one company. No extra outside vendors, no gateways to pay for. This is a revolutionary product that we just launched, uh, hard launched. Everybody's been using it for a while. But today we have an exciting guest that I met when I was at the SEAA Southeastern Acquirer Show named Oz Azaria, and he's with a company called HooksPay, which is a very interesting product for many reasons— for banks, for merchants, for acquirers. Everybody should learn about this kind of product because it involves embedded finance And embedded finance is like one of the biggest buzzwords when it comes to payments these days. Everybody is trying to figure out the next thing to do with embedded finance. So, Oz, welcome to the show.

Thank you, Allen. I'm excited to be here and I was thrilled to meet you at the SEAA conference. You were quite refreshing. You had quite a refreshing view there. So I'm happy that we met. And excited to be here.

And so where's your company based out of?

We're based out of Miami. The entity is a Delaware company, but the team is scattered around the world. So we have a team in Melbourne, in Europe, in the US, and I'm based in Toronto.

Okay. You traveled a long way to come to Florida for the show in Orlando.

Well, I will treat— I will have that treat In terms of the weather, every time I have the chance, right, I would swap the Orlando or Florida weather with Toronto weather in a bit.

Yeah, we got to see that. The incredible— the incredible— the illusionist guy or whatever he wants to be. That was kind of— that was a crazy thing. Definitely was sleight of hand.

Mentalist.

Yeah, The Mentalist. Yeah, that was pretty cool. And, uh, so tell us a little bit about, like, how does this, you know, I mean, obviously, I mean, the offers, you know, how does it work? Like, where do they originate and, and things like that? And how can a bank, you know, a lot of different people listen to the show, you know, bank, we have people in banking, people, merchants, ISOs, So how does it benefit like those 3 groups with this product?

Perfect. So first, what we're doing, we call ourselves Embedded Offers Platform, and that means that we're embedding real-time rewards funded by third parties. We use third-party marketing budgets in order to create that rewards. And for the merchants, it's just getting rewards that are funded by some, by someone else. And through that, they get to see a conversion uplift if it's an online merchant or average order value increase if it's a physical store. So the way it works is that we are partnering with credit card issuers and then we work with them in order to target their cardholders. And then once there's a live session going within a shopper trying to shop something physically or online, we validate who the customer is and then we present the reward in real time embedded with no friction. So you just get to see a message like, hey, if you pay with your Chase card, you're going to get 5% off and you don't need to activate it. You don't need to preregister. You don't need to download anything. You don't need to go outside of the flow. You just get the message you need at the time you need it. Right. When you're about to purchase something, then you say, hey, great, if I use this card, I'm going to get a reward. So why not?

Yeah, that's great. So, you know, how— so like banks can sign up with your company and work with you so they can have it like— like I know I have Chase and I have a Capital One and, and a Truist, and they all have some kind of reward things. But I don't like how some of them do it. Some of it Like with Chase, it's all— doesn't matter if you— you— it's just listed so you know about it. So if you have— even if you don't know about it, you still get a discount.

Yeah.

And but with others, I notice you do have to click, which is kind of annoying. So you have to like enroll in that reward.

So first, you know, it used to be challenging to issue a card, right? 10, 15 years ago, if you wanted to become a card issuer, you have to go through a long process of licensing with, with, with the brands, like with Mastercard and Visa, and then get the technology and, and roll it out, and then the licensing from the regulators. So it used to be a hectic process, but today it became kind of a commodity. So even if you're a mid-level merchant, you can work with a, with a bus company and issue a co-branded card quite easily. And the problem today became the opposite because cards are so common, commonly used. You have 1.5 billion cards in the US, 40% out of them are totally inactive. So the issuers, the card issuers have strong motivation to make sure their users are active today. What they're doing is that they're partnering with all kinds of big retailers or with card-linked offers platforms in order to create these rewards. But in many cases, or in the vast majority of them, the user experience is awful. Like, you need to change the entire way you're making a purchase, right? As an example, if I want to buy something at Nike, I need to remember which card provides something at Nike. So I need to log into my banking application or scroll down my emails, look for the reward that I once got. And what we're trying to do is to reverse that entire flow. So we recognized the motivation. We come from the— we came from the payments industry. I was an ex-Mastercard employee working with issuers for many years, and we reversed that motivation. So we say, okay, the issuers have motivation, and we give them a tool to be able to roll out those rewards in real time seamlessly with merchants. And instead of just looking for giants like Delta Airlines and Amex partnership, we created a single platform in which multiple issuers can play with multiple merchants. So you can be even small merchants with a single point of integration to us. You get access to multiple rewards by multiple issuers. You don't need to sign with them. And the idea is that they get to see higher volumes and better spend. The merchants get increased conversion or increased average order value, and the user just get a better deal.

And so like from a merchant standpoint, so like a merchant standpoint, let's say I own one store. Is it something that somebody with one store can get involved with, or is it better like someone that has like 3, 4, 5 restaurants? It's more beneficial to them.

So there are two perspectives to this. All right. So the key metric that, that we are after is traffic. So how many users are visiting the store for the online website. And the other one is how many of these users are identified, meaning they provide either a phone number or email through Merch. Because we use that, obviously not in a plain manner. We have a built-in data clean room that deals only with hashed data. So we get a hashed data of the user and not the plain email or phone number. But we use that in order to know which type of rewards we can offer. So as an example, if it's a bodega store and they have many users coming in and out, but almost no, no user is identified because I don't know, they don't have any loyalty scheme or they're not after collecting those credentials, then it will be challenging for us to provide enough value. But if you're an online merchant, then eventually all of your transactions are identified because you need to provide an invoice or a digital receipt. So with that, we can, we can provide offers to the vast majority of the shoppers coming in. And if it's a physical store, usually if they have a built-in loyalty system and they collect your loyalty identifier using even QR code or your mobile phone number, then we can ride on that in order to provide the same kind of experience. The minimum traffic that we ask for is usually around 100,000 monthly, like 100,000 visitors. So if it's an online business, you still have the abandonment ratio. So I'm not, I'm not referring to 100,000 worth of transactions, but 100,000 visitors. And if it's a physical store, it can be less depending on how many of them are identified.

Yeah, it's, you know, it's, it's always, that's one of the things that, you know, like the— for SMB merchants, you know, on the smaller end, you know, it's hard for them to participate in programs like this. But someone who's got, you know, maybe 5 or 10 stores, or someone who's got 5 restaurants, you know, if you had 5, like, QSR Mexican restaurants and you're doing thousands of transactions every month, you know, plus your website visitors who are ordering, like, online ordering and everything, you probably have enough traffic to qualify apply for these type of programs.

Exactly. And, you know, it's an interesting question that you raise because we had to educate some of the issuers we work with on the exact same question because the issuer would used to ask us like, which merchant are you working with? Like, is it the Best Buy, the Walmart, the McDonald's type of merchants? And we say, listen, the brands in our case, they don't mean anything because the customer is already there, right? The customer is about to purchase. And we're just there at the right time. So if it's, if there's no valid offer, we just won't present it. But if there's, if your customer is about to purchase, you want to make sure that you take advantage of the opportunity to promote whatever you're trying to promote.

Yeah, it's very interesting, like all these, you know, how, how everything works with, from a credit card processing standpoint of how data is collected and loyalty programs. Would, you know, do. And a lot of businesses, they don't, you know, like in restaurants, you know, like it amazes me. We have pay at the table technology now where, yeah, you can get the person's email address and their phone number. And how, and how, like many times I'll go to a restaurant and the staff is not even collecting that data, you know, because they're probably not trained properly by the owner. They have the technology, And that's one of the things that we try to educate, like, our restaurant merchants on is, hey, you know, these, these tablets, like, they might cost you some money, right? You can't think about that. What you have to think about is what can you gain by having these tablets? So you're gaining one, your servers can take an order and have somebody pay without walking back and forth 5 times. And number 2, you can collect the data of all these people that are in and out of your restaurant.

I totally agree. Better service plus better data.

Right. And the data is key today to getting more business in by sending offers or having enough data so that you can participate in these type of programs and put them to use. I mean, there's— there are even single location restaurants that are, you know, have 300, 400 seats in them. That are next to like a sporting complex and they're, you know, you know, have probably 50,000 to 100,000 people rolling through there in a month and then you're not collecting any data. Yeah.

And then you cannot communicate any events that you're having or any special promotions that you're trying to have. And, you know, one of the things that we realize is because Our system is able to process multiple offers and then select the one that is most likely to convert or increase the average order value. So it's like having a smart AI bidding engine that runs at the back end that is able to optimize on the budget. So let's assume the issuer says, hey, I want to promote a specific offer to this target, to this target population, and I have a half a million dollar budget for it. What we do is that we give them the platform to set the rules like they say, okay, the maximum worth of incentive shouldn't go beyond $10 per incentive and the frequency shouldn't be more than once a month. And we follow these guidelines, but we optimize upon them. Right. So depending on what type of transaction we're looking at, it can be a transaction of $150 and then the incentives will be X and it can be $1,000 worth of transaction and then it will be completely different. Incentive. And what we realized is that some of the merchants that we work with and we're allowing these third-party offers to optimize, the merchant asks us, can we use the same technology? So I have a spare budget. I want to increase, you know, I see that we have a positive uplift and impact on our activity. I'm willing to invest some of the budget. Can you give me the same capability? So we open our technology for the use of the merchants. The merchant can say, hey, I can allocate $10,000 this month for promotions. Just deploy them upon, you know, specific rules. And then we allow them to use the system as if they were issuers themselves.

Oh, that's interesting. That's really good for clientele. One of the things, like when you were at the convention, I know you came to my talk and I asked that— I asked the group that was in the room, there's a couple hundred people. In fact, we're doing a live webinar on the same subject matter at the end of this month. And I asked, you know, about these different companies, Stripe, Square, Toast, you know, do you think that they process payments or are they, you know, are they payment processors, processors, or are they technology companies? Most of the people in the room said, oh, they're payment processors, but they're wrong. They're, they're technology companies and their main business is data. Their business, while they make money off payments, let's not ourselves, their main part of their business and growth strategy is all based off data. And I think business owners need to really start to understand how data is important to the growth of your business. You don't have newspapers anymore. You can't buy ads on Google because you're up against national brands. The same thing on Meta. You can't buy ads against like a national chain. Right. So having data is super, super important. I think business owners need to really understand the importance of data.

I agree. And also, you know, it's a cliché today, but AI kicks in as well because I can give you the, you know, the easiest example. Most websites today, you know, when you're just browsing there the first time, they all give this pop-up that if you register, you get 10% off, right? Like that's That's a standard in the industry. But who says that the 10% should be presented at this point? And maybe for some users, 5% will be enough or 2% will be enough, or you need 15% just to get the needle moving. So what we're doing is exactly that. Like you define the budget and the system learns how to optimize the offer based on the session. Like maybe if someone is browsing early morning, then you know, the likelihood of completing a transaction is lower and then the budget or the incentive should be higher. While if it's during weekend, maybe the conversions are by natural flow better and then you can decrease the discount that you're providing. So those kind of tools are, are really important in the way we operate on the issuing side and we can deploy that for the merchants capabilities as well.

Yeah, I noticed that I went on a website and I was looking at a a product, shoes, and, and I saw the first time I went to the website, it gave me 10% off. I went to the website again, like maybe several hours later to look again. Now it's 20% off.

So that— so these guys are doing it smartly. But, you know, most implementations that I saw weren't that sophisticated. So you would get the same 10% every time you'd log in.

Yeah, I was surprised. I was like, wow, that was— that's crazy. Like, they knew I came back and they, you know, upped the offer. I've seen other ones where it says, oh, spin the wheel and—

yeah, yeah, yeah.

You know, they try to gamify, you know, gamification, you know, was— that was a big thing now. But definitely like embedded finance. I mean, I remember there was a company years ago and they were deploying a solution where when people walked into the store, they had their store geofenced and it didn't matter. You didn't have to be a member or anything. They were able to put a push notification into your telephone.

Yeah, but in these days, you know, sometimes you would go on the highway and then you just cross by the geolocation of, of a furniture company and then you would get a text message or a push notification of buying a closet. While you're on the highway. So in many cases, those were difficult, too difficult to do it right. Today, I think you have better options, and especially with the big giant companies, they have Wi-Fi signals within the chain so they can do a much better work with it.

Yeah, they kind of stopped that whole thing where they could put it inside the text message. There was like, they stopped that. They don't really allow that anymore. You have to opt into their Yeah, because you have to give them something. You have to give them your email or your phone number so they can keep texting you and offers. Oh, buy this, buy that, blah, blah, blah. You know, there's, there's, there's a lot of, you know, there's a lot of that going on. And, you know, merchants need to do that. How can— so how can ISOs get involved in this kind of program?

So, uh, first we can white label our technology for an ISO or ISV so they can, you know, offer their merchants embedded offers built in with a single point of integration. So we integrate with them and then it's based on an opt-out for any merchants that wants to get involved. And in some cases, that's enough for the ISOs because they're looking ways to differentiate their product. We can give them some kind of exclusivity for their categories in order to give them the differentiating factor. And in some cases, we even do a deeper collaboration and we share revenues them because we make revenues from the issuer side and we can share that revenue for each merchant that they are onboarding so they can monetize upon the traffic they send to Hookz.

Yeah. So it could be a way like if you had a big client, let's say somebody with 10 or 15 large stores or someone with a chain of restaurants, we could come and partner with you and that could be an added incentive to bring to the merchant.

Yeah, definitely. And also there are other ways we're expanding too. So we started presenting only offers from card issuers and now we're looking into OEMs or the manufacturers of the product. So I know that you're close to the restaurant industry by heart and by experience and As an example, we can offer promotions funded by a manufacturer of a beverage company, right? Or if it's an IPA beer, they can have a promotion and they can set the rules. We are the objective company that makes sure that any incentive that's being deployed is monitored by us and optimized by us. But it can be presented on the point of sale level. And in these cases, we even don't need the phone number or email because that's a SKU level data, right? So someone is about to order a meal and we can offer an upsell. If you, if you take this IPA beer, we're going to give you 20% off. So that's, that can create a win-win between the manufacturer and the store that wants to increase sales.

Yeah, that's interesting. Yeah, it was when we were at the— I told you I went to a basketball game to go see Caitlin Clark. She didn't play, but go Fever. At the game they had like a special that, that a thing scanned this QR code and you could get free Cheez-Its. And then they just— you scanned it, you gave them your cell phone number, and then you got a coupon to take into the grocery store to get a free box of Cheez-Its.

Yeah, so, so we're trying to stay away from, you know, uh, um, challenging, uh, redemption processes, right? We want to have it as seamless as possible because the reward should feel like a reward, right? Right. You don't need to work hard in order to get rewarded. Like it's a treat. It's something that should be nice. So we're trying to make it as seamless as possible. And what we also did in order to be fully transparent with both merchant and the party we work with, like the issuer or the manufacturer, is that we created a built-in control group to every campaign that we're rolling. So as an example, So if both of us are going to the same store and both of us are eligible for an offer, you would get to see the offer and I won't. And we're comparing the two results, like what's the conversion on your case and what's the conversion in my case? And obviously, when the numbers go bigger, then you can see the uplift. And then we actually measure the either the, the uplift in share of wallet for the issuer or the, the sales uplift for the merchant because we measure the gap between the standard conversion and what we get to see together with Hooks. And then you can monitor it in real time and see how we perform versus, you know, the normal, normal case without us.

Yeah, it's very interesting. I think we're going to see a lot, all kinds of different embedded finance products in the next few years. We're going to see a lot more of it because the internet is growing with AI, things are growing. With, with all kinds of, you know, technology. And this is why, like, businesses need to really value their— the, the app. They need to put some value into data collection, and they need to put some effort into data collection and actually do something with that data. So, you know, but what people don't realize is when they work with some of these companies like Toast, they're actually aggregating your data with everybody else's data. Data that they're collecting. And that's, you know, there comes good and bad with that. That's why you should be collecting your own data.

Yeah, you get as a merchant, sometimes you get a better product, but you are the product. And also the pricing is usually not that cheap. Like usually you pay a higher price, but you are part of the development process as well because you contribute your data for their product development.

Yeah, I'm not sure if they give the— any of that data back to the— back to the merchants though, you know. Even the same thing with like Stripe, you know, they collect your phone number, your email address, they know what you spend money on. Who— who knows what they— what they do with that data? Because I get pounded with email all the time. Discount on this, discount on that. I bought coffee, then all of a sudden I'm getting a bunch of coffee offers. For other types of coffee, not the one that I bought, but another one.

Yeah, I wonder how it's going to be when, you know, there will be a transition to agent e-commerce. It's still in early days, but you see all of the giants are getting ready for it to the days where, you know, you won't go to a website, you know, to complete a purchase. You would just ask, you know, hey, ChatGPT, I want to buy an impact driller. Which one is the best? And find me the best deal and then make the purchase. So we're also trying to get ready to these days where, you know, the agents will do the work and they can ask us what type of offers, you know, we can inject into the process. So instead of just checking your mobile banking application, you would get the result within ChatGPT or whatever chat you're using, whatever AI agent you're using, and then you can just complete the purchase through a single click of a button and make sure that you're optimized upon your spend with your different type of cards and means of payments.

Yeah, I was talking to— I had somebody on the podcast recently that does SEO, and one of the things that they were talking about was the decreased traffic on Google search traffic, and it's on to the the AI agents, obviously, I think probably the leaders are Gemini and ChatGPT. But I also notice with ChatGPT, I use it a lot to ask it any kind of question. If I look something up on the internet and I don't find it, I ask ChatGPT. But I also notice that they started occasionally popping links in there to the product. You know, but I'm waiting for them to monetize, you know, them to start monetizing. And all of a sudden you're going to say, oh, I'm looking for the best headphones, right, for the airplane, blah, blah, blah, blah, blah. And then all of a sudden you're going to get 5 ads and reviews and everything, and it's going to be crazy. And who knows, Google might, you know, Google's going to— I'm sure that they're trying to figure out right now Like, how are we going to not let them take over? Like, them just take over everything, you know?

Well, you know, some people say, well, Meta in Hebrew, it's like that. So some people say Google is Meta, right? But, but they're, you know, I'm just kidding. I'm sure that they will find a way to chip into this game, right? Because they have tons of data today which they can deploy in order to leverage their game on AI agents as well.

Yeah, I was learning all these different— you know, I learn all the time. Like, I like to learn, like, oh, how can you make your website better? How is this? What is this about? And I started to notice, you know, when you're searching on Google, there used to be a little section, AI generative information. Now it's getting bigger and bigger and bigger because it's demanded by the public, you know. And we're going to see that, you know, soon you're just going to ask Siri, hey, can you look up blah, blah, blah? And you're going to get— they're going to turn that thing into AI. It's AI-ish already, but I guarantee you Apple is working on that too, you know, just talking into the AI and getting, you know, talking and then it's spitting out every— all this information. It's just, it's crazy. How fast technology is moving. And I mean, it's moving. You know, I talk about credit card technology all the time. So like I started in this business in 1998, '99, and, you know, we're dealing with a little box hooked up to a telephone line. And then we got to the internet and then we got to, you know, 2015 to the chip. And then we, you know, and then all of a sudden all the machines started switching from these I don't even know what, what those machines were built on, but all of a sudden now everything is on an Android, you know, thing. Between 2015 and like 2020, everything moved. Boom. And then if you take the, the advancements from 2020 to now, 5 years, I mean, we went— it's moving so, so things are moving so fast now that it's incredible at the rate of speed everything is moving at. From there, right on from a technology standpoint. So I think it's important, you know, businesses, you know, invest in technology, make good choices. You don't have to spend a lot of money now because there's so much available on a, you know, in a hardware and software as a service basis and getting involved in embedded finance and get and figuring out like, hey, I need to have data collection, whether you have a website, a restaurant, a retail store, so that you can get involved with offers like this and other things that are probably under development that we don't even know about.

Today it's much easier. Like if you have the— like even if you don't know what to do, you can just use, you know, ChatGPT in order to get the understanding of where to look for and what kind of information you need. But then the tools are out there, right? We're a small team and for us to build what we've built, if we were trying to do that 10 years ago, we should have tripled the team in order to get to the same results. But now things are much easier to develop. And I think that goes well for merchants because they can look for the right partners in order to optimize their businesses. And that's all about working with tech companies and embedded finance and all of what they, you know, the market can offer.

Yeah, that's one of the things we, when we talk to merchants, we tell them like, we're a technology-first company. We want to talk to you about what technology do you need for your business to make it work for what your goals are, you know? And that's what we focus on. And we don't focus on like, oh, the pricing and the this and the that. We want to focus in on the technology first and make sure you have the correct technology product. And the same thing if somebody came to us, said, oh, I had 15 stores and hey, is there a better way to promote our stores? And we're doing millions of dollars a month. Yeah, we're going to be calling up Oz and going, hey, how can we work with you with this client? Because it's going to be, you know, we'll be able to help them give their customers a better— what they call now the customer experience. Right. That's like what everybody talks about, customer experience, right?

Yeah, customer-centric.

Yeah, customer-centric and their experience. So give us some parting words and where can everybody find you and the website.

And so the website is www.hookspey.com. Uh, we're, uh, easy to reach out to. We're looking for expansions on both both issuing side and merchants, anyone who wants to improve the shopping experience and include embedded offers to their flow. It's an easy process. We support shopping commerce platform plugins or a simple API that you can just simply deploy, and we can grow the business together.

All right, sounds good. And you can also find Oz on LinkedIn. You can find me on LinkedIn if you want to get in touch with, uh, get in touch with me about the podcast or about Nationwide Payment Systems and NPS One. Thank you for listening to the podcast. As I always say, carpe diem, let's seize the day. You can follow B2B Vault at b2bvault.info. You can follow us on LinkedIn, Facebook, um, we're on Spotify, Apple Podcasts, anywhere you listen to podcasts, and we're also on YouTube. So everybody have a day. And thank you to Oz for coming on the podcast today. And everybody, peace out.

Thank you, Allen.

Thank you.