Stax appointed Rowe as CEO in early August. She was most recently head of integrated e-commerce at London-based Paysafe, and at Stax, she takes over for interim CEO John Kristel.
"I've worked mostly in Europe recently," Rowe said during an interview shortly after her move. "To have a chance to come back and live in the U.S. is a great adventure."
Rowe is taking over as Stax battles numerous fintechs looking for a piece of the digital payments market while battling inflation and a down market for fintech fundraising. The strategy could include a geographic expansion, which would introduce Stax's alternative pricing method to new markets.
Stax uses a subscription model to make money. Where most payment companies charge for each transaction, Stax operates more like a utility, collecting a set charge each month. Rowe is inheriting this model, but is bullish about the concept.
"It is a different mentality," Rowe said. "Usually as payment people, we're thinking about interchange and scheme fees."
While Stax obviously charges for its service, Rowe contends that subscribing to a payment processing and merchant service creates cost certainty and simplicity, and keeps the discussion with merchants focused on technology and processing improvements.
"It's about helping merchants, with them having to be experts in all of the intricacies," Rowe said. "The subscription model allows merchants to get tools that help them run their business without having to get a diploma in understanding payment fees."
Stax is promoting its pricing model as a source of stability during a period in which businesses are facing multiple challenges. Inflation, while falling, is still higher than normal, and there is the potential of an economic downturn that could create more problems. That has led payment companies to
Even under a subscription model, merchants still have to compute the costs of payments as part of a cost-benefit analysis, according to Debbie Buckland, a director and analyst at Gartner.
"It is a different way to look at pricing," Buckland said. "But you'd still have to know about transaction volume to know if it's the right choice."
Rowe contends that the subscription model answers merchant questions about transaction processing costs, particularly in an uncertain environment.
"As long as you stay within the set parameters, you know the cost you're paying," Rowe said. "When the economic numbers change, having control over the payment costs is really key."
Rowe will most immediately work on partnerships, such as new collaborations with Mastercard and PayPal, and will also consider how Stax can expand globally.
Stax made a
Stax has more than 30,000 clients and is valued at more than $1 billion after its most recent fundraise in March 2022. The firm does not plan to seek additional funding, according to Rowe, who said Stax is in a strong financial position. Stax was among the payment companies that
Stax is also considering an international expansion, as small to midsized businesses in the U.S. look outside of the country for new customers and suppliers. Block, Stripe and PayPal have all made moves in recent years to enable international payments, and other payment firms such as Ripple also support international payments for small businesses and online marketplaces. "It takes a lot of interoperability to offer cross-border payments," Buckland said.
International expansion is a strategy that isn't taken lightly, according to Rowe.
"But the software vendors that Stax is taking on in greater numbers see an opportunity to expand outside of the U.S., especially in English-speaking markets," Rowe said. "You need to be ready to follow them to those markets."
Stax is moving less quickly on trends such as real-time settlement, advanced machine learning and crypto, though it is laying the groundwork to scale in these areas.
"We're not seeing immediate demand, but I'm coming from the U.K. where real-time payments accelerated quickly," said Rowe, who made similar assertions about low adoption levels of crypto and generative artificial intelligence among Stax's clients. "I totally understand the potential of adding real-time payments, so it's something we will stay close to."
In addition to her role at Paysafe, Rowe has also held executive positions at RBC and Barclaycard. Rowe, who is Black British, said she is "surprised" there aren't more women in leadership roles in financial services.
"I have learned from so many phenomenal women in this industry," Rowe said, citing former Starling Bank CEO
In financial services, 74% of C-suite executives in 2022 were men and 26% women, according to McKinsey, which also reports 12% were men of color and 5% women of color.
And about 14% of new unicorns, or companies that surpassed $1 billion in valuation without listing on a stock market, had women on the founding teams in 2021, according to Bloomberg.
"The gap is getting better. That's the good news," Rowe said, noting that Stax was co-founded by a woman of color.
"Is the gap getting better fast enough? I don't think so," Rowe said. "I would encourage investors to look at their portfolios and ask if they see women and people of color. If you see a team with no diversity, you have to question if that team is as strong as it could be."
