Mobilizing the Retail Experience: A Discussion with Ashok Narasimhan, Co-Founder & CEO of OmnyPay

Navigator Edition: January / February 2017

omnypay_-webAt Money 20/20 we sat down with Ashok Narasimhan, the CEO and co-founder of OmnyPay. Our conversation touched on the changing retail environment, how mobile payments can unlock new value for private label card programs, and how OmnyPay’s first relationship – with Kohl’s – came about.

OmnyPay was founded in 2014 by three accomplished entrepreneurs – Ashok Narasimhan, Mohammad Khan, and Bill Melton – with the mission to create a better mobile commerce platform that augments the physical store experience with the personalization and flexibility of digital commerce technology.

OmnyPay has created a cloud-based white-label commerce platform with open APIs that can connect multiple points of interaction along a shopper’s journey through e-commerce sites and physical retail stores. Retailers can also brand OmnyPay’s white label app as their own to easily deliver mobile commerce capability.

1. Why did you, Mohammad, and Bill come together to work on OmnyPay?

Mohammad and Bill have a deep background in payments – Bill was the founder of VeriFone and Mohammad founded ViVOtech. The three of us were sitting around and realized, this market is really ripe for disruption. It seemed wrong to us that the entities who write all the checks to pay for the system – the retailers – have so little control of everything.

So when we started OmnyPay we said, “let’s take the side of the retailer.” Let’s design a payment system that runs on the existing rails but puts control in the retailers’ hands. Our first step was to go speak with large retailers and they said, “payments are just one part of a bigger picture for us.” In the end we designed OmnyPay to do three things: improve the entire checkout experience (including loyalty, rewards, promotions, all of that stuff), give retailers the ability to steer their customers to certain payment methods, and put the retailer’s brand front and center.

2. Why did you launch with Kohl’s?

Kohl’s has 25M private label credit cards and ~60% of their sales come from those PLCC customers. So it was a no brainer for them to invest in mobilizing their branded payments product. We can also bring together the customer experience – when someone uses Kohl’s Pay at the POS, we establish an online link between their phone and the cloud. Then Kohl’s knows who is at the register, they know how many Yes2You points she has, what is available for her with Kohl’s Cash, and we can help them send all of that along with product-level info to the app while things are being scanned.

3. How can mobile change the retail payment experience especially in the context of branded cards?

Mobile can make switching between payment methods – such as private label, co-brand, or gift card – completely seamless. Mobile makes it easy to use multiple payment methods for one purchase, and the shopper never has to worry about having a plastic store card with them. OmnyPay’s system can also upsell cards to consumers. When the shopper is standing at the checkout in the store, we can push a sign-up offer to them and within a very short period of time, they can be approved and the card will be digitally downloaded onto the app so they can use it for the purchase right there.

4. What are your thoughts on Apple Pay and these platform wallets vs. proprietary wallets?

They will co-exist because they offer different value to different segments of the market. We are focused on the top 100 retailers where things like loyalty, rewards, promotions, integrations, and branding are all critical elements. For small merchants who just care about payment, Apple Pay will work just fine.

At the end of the day, retailers will take any method of payment that the customer wants to give and ultimately it is the customer who makes that choice and wins from more choices. For example, at Kohl’s, they will continue to support Apple Pay and it is up to the consumer. They can tap to pay with Apple Pay or they can use Kohl’s Pay to pay and redeem discounts and rewards all in one scan.

5. What challenges have large retailers faced implementing mobile in your experience?

Delivering a true omni-channel customer experience on the front end is difficult. Our approach is to make sure the checkout experience is identical across all channels. In the physical store, customers scan the QR code to initiate a payment. They do exactly the same thing online; the checkout page will show a QR code, which the shopper will scan with their phone to complete the payment on their phone. Consistency of experience at checkout is true omni-channel.

In terms of the back end, my team has a lot of painful experience with all of that. In fact, my co-founders, Bill Melton and Mohammad Khan, had a lot to do with creating this whole system of hardware on the merchant’s counter but now it is a mess.  EMV has made things a lot more complicated and the Target breach has driven retailers to contain everything within the PIN pad.  So our approach is to eliminate this in store complexity by moving everything to the cloud, and bypassing the entire POS.

We have very clear APIs which can connect into the loyalty program or product feed or anything else in the back end. This is aligned with a lot of investments retailers have made over the past three years to re-architect their systems around standardized APIs. Our bottom line proof is that for Kohl’s it took us 4 months from start to going live. In the enterprise scheme of things, especially retail and payments, that is light speed.

6. Why would a retailer work with you instead of building their own solution like Walmart or CVS has done?

Retailers have a hundred projects that they are working on at once.Mobile payment is usually not something at the core of what they do so it would take 18 months to find resources and cost who knows how much money. Then who knows what kind of result they would get at the end of the process. So even for big retailers like Kohl’s it’s a question of make or buy and the latter is usually the right choice.

7. Who is leading digital payment efforts at retailers in your experience?

We are finding the CTO is an increasingly important person. The CTO is almost becoming the Chief Digital Officer. He or she is the person that is tasked with stitching everything together on the same common platform.CTOs are able to cut across the conflicting interests of Marketing and Payments / Treasury people. They are the champions for new technology and can bring all of the other stakeholders in.

8. How do large retailers’ needs and perspectives vary outside the U.S.?

They are very similar. There is no difference in what they are looking for in terms of loyalty and rewards. However, the importance of tender steering is sharply lower in Europe because interchange rates are so low and similar between credit and debit. That is the only difference we see.

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