Behind the Network: Treasury Software's Role in Payment Processing
Wrestling Payments Podcast: Season 3 - Episode 13
In this episode of Wrestling Payments, host Joe Casali from NEACH speaks with Glenn Fromer of Treasury Software about solving the critical "last mile" disconnect between small businesses and the ACH network.
Glenn shares how his journey from accountant at fast food chains to payment software developer revealed significant inefficiencies in payment operations. His company evolved from addressing bank reconciliation issues to creating ACH file solutions that enable small businesses to participate in the national payment system alongside larger organizations.
The conversation explores why businesses often attempt to build internal payment solutions despite the challenges of ongoing maintenance. Glenn explains that while anyone can write code, the real value comes from managing constant regulatory changes and technical updates – comparing DIY payment solutions to growing your own cotton to make a t-shirt instead of buying one for $10. This practical insight highlights why specialized payment software often provides better long-term value for financial institutions and their business clients.
Guest-at-a-Glance
💡 Name: Glenn Fromer
💡 What he does: Founder & Executive
💡 Company: Treasury Software
💡 Noteworthy: CPA-turned-fintech innovator who streamlined ACH payment processing for businesses.
💡 Where to find him: LinkedIn
Key Insights
The Last Mile Matters Most in Payment Networks
The final connection point between payment systems and end users represents the most critical and challenging component of the entire network. While large institutions focus on core infrastructure, this "last mile" determines whether small businesses can effectively participate in modern payment systems. Like electrical grids that require transformers and distribution lines to reach individual homes, payment networks need specialized tools to connect accounting systems to banking infrastructure. Without these connection tools, the payment ecosystem would exclude smaller players, limiting its overall utility. For financial institutions, recognizing this connectivity challenge helps better support clients transitioning from legacy payment methods to electronic systems, ultimately democratizing access to payment networks.
Specialized Payment Software Beats Custom Development
The true cost of ownership for payment solutions extends far beyond initial development costs. While building an in-house ACH file creator might seem straightforward, the ongoing maintenance becomes prohibitively expensive over time. Changing regulations, security requirements, platform compatibility updates, and evolving file formats create constant technical debt that most small to mid-size businesses cannot efficiently manage. This explains why specialized third-party software often provides superior value despite initial resistance. Financial institutions advising business clients should evaluate total cost of ownership rather than just upfront investment when recommending payment operation solutions, recognizing that specialized providers can spread maintenance costs across multiple customers.
Software Integration Creates Both Opportunities and Challenges
Modern payment operations increasingly depend on seamless software integration between accounting platforms and banking systems. The dramatic difference between QuickBooks Desktop and QuickBooks Online exemplifies how rapidly changing software landscapes can disrupt payment workflows. As software platforms evolve, businesses face migration challenges that ripple through their entire payment infrastructure. Financial institutions serving business clients need to understand these integration dependencies when advising on payment operations. This knowledge allows them to anticipate client challenges and recommend appropriate solutions during software transitions, protecting payment continuity during accounting system migrations.
Customer-Centric Product Development Drives Payment Innovation
Successful payment solutions evolve by addressing actual user pain points rather than chasing competitor features. Treasury Software's journey from bank reconciliation tools to ACH file creation demonstrates how listening to customer requests creates more relevant products than following industry trends. This customer-focused approach explains why payment solution providers often develop in unexpected sequences, addressing specific problems as clients encounter them rather than following predetermined roadmaps. For financial institutions, this insight emphasizes the importance of gathering direct client feedback about payment challenges rather than assuming standard solution paths. By identifying the specific payment operation obstacles their clients face, banks can better match those clients with appropriate technology solutions.
Episode Highlights
The Origins of Treasury Software [03:00]
Working with franchisees, he witnessed outdated practices like storing thousands of post-dated checks in file drawers for collecting royalty fees. This direct exposure to payment operation challenges motivated the creation of Treasury Software in 1999, specifically designed to help small businesses modernize their payment processes.
"Initially, I'm an accountant, a CPA by background, and I worked mostly in fast food companies - Burger King, McDonald's, Arby's... We were using post-dated checks to collect our royalty fees from the franchisees. They were like hundreds, probably thousands of checks in file drawers."
The Evolution of Payment Solutions [05:00]
Treasury Software's development path demonstrates how small business payment needs have evolved. Starting with bank reconciliation tools in 1999, they expanded to positive pay files in 2004, and finally ACH file creation in 2005. Glenn emphasizes their customer-centric approach: "chase customers, not competition" by developing features based on client requests rather than competitor actions. This evolution mirrors the broader trend of small businesses gradually adopting more sophisticated payment capabilities, an important consideration for financial institutions supporting these clients.
"In 1999 I did have the opportunity of helping start Treasury Software, and our main goal was to help franchisees and small businesses in general address that bank reconciliation issue. They started telling us about other services they wanted. They wanted to create positive pay files, which we came out with about five years later in 2004. And then the granddaddy of them all, everyone went for in 2005, they wanted ACH files created."
The 'Last Mile' of the Payment Network [06:30]
Glenn positions his company as maintaining the crucial "last mile" connection of the ACH network. Using an electrical grid analogy, he explains how Treasury Software focuses on the final connection to small business users, enabling them to participate in electronic payments. This perspective highlights how specialized tools play a vital role in democratizing access to payment networks for businesses of all sizes, a key consideration for financial institutions supporting diverse client bases.
"I really consider myself an evangelist of the ACH Network. It's a great equalizer for small, mid-size businesses. Everyone plays a role in the network. I use an analogy to an electrical grid - you've got a power station, you've got power offices, transformers, and then the individual lines going to people's houses. We view ourselves as maintaining that last mile, helping the network with that last mile."
The Hidden Costs of DIY Payment Solutions [15:30]
The discussion examines why organizations often try to build custom payment solutions despite significant challenges. Glenn addresses the IT mentality that "if it wasn't built here, it isn't worth it," while explaining why this approach typically fails. While initial coding might seem straightforward, the real challenges emerge in ongoing maintenance: keeping up with changing rules, regulations, and platform compatibility. For financial institutions advising clients on payment operations, this insight provides valuable perspective on the total cost of ownership for payment systems.
"If it wasn't written here, if it wasn't built here, it ain't worth it... So everyone wants to build their own. But we see that a lot of companies, even the mid-size companies, they really can't justify it. It's not even just the development - everybody knows a 17-year-old that knows Python. But to write it, to debug it, to maintain it, software-wise as well as rules-wise, the rules are changing, the regulations are changing, we're adding formats."