Helcim is a Calgary, Alberta-based payments company which provides Canadian & American businesses an opportunity to accept credit card payments at affordable & transparent rates.
Founder & CEO Nic Beique recently sat down with CCI President Benjamin Bergen to talk about their journey from software to hardware products, and the opportunities that open banking presents for innovative financial technology companies.
This transcript has been edited for length and clarity.
Benjamin Bergen: Thank you Nic for taking the time to chat. Just to start off, can you share a bit of a background, and tell us a bit about yourself and Helcim? What it's been like founding that company?
Nic Beique: I became a self-taught computer programmer and from a young age, I built a bunch of small businesses. I fell in love with computer programming, the journey of building a small business, and finance. You put those three things together and I ended up in the payments world.
My first payments business started well over a decade ago. It was a reseller of merchant services. So, we were reselling the services of a large legacy payments processor. But over that time, I got to learn the chops of the payments space and built some fantastic relationships with bank partners.
Then ultimately, we made a huge pivot, and in the summer of 2020, launched what became Helcim today. Now, we are our own payments processor, offering tools to our small business owners and the technology and financial services are all powered by us.
I always worked with small business owners and saw how payments were a huge pain point. The businesses I dealt with were more of these "traditional" businesses, think about your dentist, your auto mechanic, or the plumbing parts wholesaler in that industrial part of town. They're not using the Squares or the Stripes of the world. Many of these businesses were still stuck with the old-school, bank-powered payments companies.
There’s been a lot of innovation in payments, but it hasn’t reached everyone. One stat I like to share is that Square has 2% of the US Card Payment volume. It shows the size of the space. And those traditional small medium sized businesses represent about half. There's still a lot of companies that haven't seen real payment innovation.
BB: That's a great framing in terms of the space and the opportunity for Helcim. Can you talk about the new Smart Terminal card reader? How was the journey going from software to hardware?
NB: Yeah, we knew that based on the market we're targeting, hardware always needed to be part of it. If you're only offering online payments, you're excluding a big part of the SMB market that still thinks about in-person payments and hardware.
We started our journey three years ago with a smaller card reader. But feedback pretty quickly from our merchants was that they needed a form factor they understood better. That's when we began working on our Smart Terminal unit, which we launched in the summer. Many traditional SMBs have an in-person component to their business. They're used to having hardware to accept payments. Our goal was to offer a familiar form factor, but digitized.
Our smart terminal has a full suite of software built into it. For example, an accounting firm might start with us just wanting a payment machine for their front desk. But once they use our system, they discover all the built-in tools. They start using online invoicing or e-commerce checkouts, things they hadn't done before. It's exciting to see, and it all starts with this digitized hardware. It's crucial for establishing that initial relationship and helping them digitize their business. We feel like it's a fantastic way to do it.
BB: Interesting. It reminds me of Henry Ford and the Model T. He said, if you asked the consumer what they wanted, they'd say they wanted a faster horse. But real innovation is offering them something new, something better that they don’t even know they want yet.
Something I'm curious about, the open banking conversation that's currently happening in this country and a bit in the U.S., what are some of the consequences for Helcim? Does that impact where you’re aiming to go as a company?
NB: I think there's a lot of resistance in Canada from the primary bank players about opening up their data. It's in their interest to slow down the process. If there's going to be innovation in the sector, they want it to come from them, not from the wider fintech sector. For us, we aim to start a relationship with our customers through our service and then push and pull data from other financial tools they use. But without open banking, there's more resistance. Even basic things, like syncing up a bank account for a deposit, aren't as smooth as they should be. There are providers we use for this, but it should be more streamlined by now.
I hope this country moves faster towards open banking. The current pace seems more in the interest of the big banks than the average Canadian.
BB: The Americans are making moves in open banking, starting consultations recently. Do you think Canada has to move at the same speed to catch up? Do you feel it’s less about Canadian banks versus our local fintechs, and more about Canada versus the world? If our banks and fintechs don't find a way to innovate together, are we setting ourselves up to be outpaced by giants like Google and Apple?
NB: I think the best way to look at it is if you think about our journey in bringing hardware to our service. It’s rare for Canadian tech companies to do that. Most of them have kind of given up and they'll piggyback on Silicon Valley players to do it for them. Bringing our Smart Terminal to market took almost two years. Part of that is that we haven’t embraced a market structure where it’s easy to innovate and build new products.
We're super proud of being a Canadian company and all our staff is in Canada. That's our intent for the long term. But over 75% of our business comes from the U.S. We want to continue making Canadian investments and bring great offerings, including modern hardware, to Canada. But it's three times the expense for us to do so in Canada versus other countries. Because of that, Canadian small businesses and consumers don't progress as fast as the rest of the world. And ultimately it hurts us.
BB: That's a solid framing. Does it also help explain why our SMBs aren't digitizing? Maybe the firms here don't have the regulatory framework to be as creative or open as they are in the States. Is that a leap of thought? Or is that on point?
NB: I think if you take a smaller market, like the Canadian market compared to the U.S. or Europe, and then add too many layers of regulations or interests that make it hard for others to innovate, you're creating a situation where companies might think, "Maybe this isn't the market I want to bring innovation to." The risk-reward, the ROI, becomes skewed. And I think that's what's happening in Canada.
We're seeing the effects: consolidation of monopolies across sectors, a declining rate of entrepreneurship, and fewer new businesses starting. These are warning signs. The government really needs to look at this and think, "This isn't the direction Canada should be heading in."
For us, in terms of where we want to continue building our talent for the foreseeable future, it's in Canada, in Calgary. I think we have an amazing opportunity. There's a bit of an advantage Canadian companies can tap into, having a lower cost of living compared to big U.S. cities and access to a great talent pool, while also being able to access other international markets. That's something we really want to lean into.We have so many positives, including an educated population. But we're hindering ourselves. We need a course correction.
The Council of Canadian Innovators is a national business council of more than 150 scale-up technology companies headquartered in Canada. Our members are job-creators, philanthropists and leading commercialization experts in the 21st century digital economy.