 them to the wide world of eSports, a show devoted to all things eSports. I'm your host, Catherine Norr. Today we're talking with Tom Leonard about prize payments for eSports events. Welcome, Tom. Hey, thanks for having me, I really appreciate it. Okay, so the big question is, how much money is there in eSports in terms of prize money? It's really amazing and it grows so quickly year to year. Some of the biggest tournaments, the Dota 2, the international, can be in the $20, $30 million range. Of course, the League of Legends does an incredible amount on their prize pools. But one of the things that you find in eSports because it's such a growing industry, there's so many new players out there that have really big prize pools out there, which is one of the reasons so many people are interested in becoming good at eSports. All right, so then you come in and we're talking about Mass Pay today. That's your company? Yes, Mass Pay, we've been around for about a year now. Okay. And it's focusing on global payments, taking payments from, usually larger payments from companies, it's not peer to peer. It's not, you don't send it from one person to another, but it's an organization that's sending money globally to people around the world. So it's, we really started last year with a guy named Jeffrey Katz, who has a tremendous background in the payments world. And so we've been up and running with doing some significant payments out so far. All right. And what currencies are you issuing payments in? Mass Pay can do payments in over 200 local currencies. So we've really worked hard to develop a really large network out there with some different formats that we can send money out. Kind of always focusing on, who is it that's getting this money? How can we make it easy for someone who has earned the prize in the eSports world to get their money? So why eSports? Mass Pay works in all kinds of industries out there, but one of the things that we felt we liked about talking to eSports is, like we're talking about the money, the size of the prize pools that are out there, but it's really a situation where you have tournament organizers, you have teams, you have leagues who are sitting in one part of the world and they want to recruit people from all over the globe. And one of the stumbling blocks can be, can they recruit people in countries where they're just not able to make payments? So we've started talking to eSports tournament organizers in particular to be able to, for them to expand their universe to reach people that maybe they couldn't make payments to in the past. And does that allow more people to participate in the games or in the tournaments? One of the things that we always talk about at Mass Pay is the unbanked world. There's huge numbers of people out there that we just kind of take it for granted here that we have, you know, we can go over to Wells Fargo and that we have bank accounts that we have credit cards. And there's a large portion of the world that that's just not possible for all kinds of different reasons. The numbers show that about 92% of people in the United States, Western Europe have access to financial institutions. But you get in other parts of the world, Latin America, for example, 65%, Asia, 40%, and Sub-Saharan Africa, maybe 20%. And some of it is because the banking system is just not as developed as it might be around here. There's also, we find a lot of, you know, some countries in particular, people just don't trust the banks. So they don't look for financial, you know, they don't have bank accounts because it's something that just in their country just isn't something that they want to do. So what we're working on is being able to open up the world to the eSports organizers so that they can talk to people, they can make prize payments in different formats to people that maybe they couldn't have done that in the past. You know, it's interesting that you mentioned that there are people in the world that don't trust the banks. Is that partly due to corruption or is that due to, you know, banks failing? Yeah, it's probably, it's maybe not so much corruption, which certainly exists out there, but it's just the ability, we just take it for granted that we put money in the bank here, we can go get it back out. I mean, it's just, you don't even think of Wells Fargo not being there tomorrow for the ATM to be working. But in a lot of places in the world, that's just not the case that, you know, you put your money in your bank, you may not be able to access it later on. Sure, yeah, because we have government regulation like the FDIC and, you know, they ensure the banks are deposits up to a certain amount. So, you know, we have a lot of security that way, but I do get that because I have had situations when I'm traveling and go to banks or I see, I observe things with banks and it's kind of a challenge for them, I would anticipate. Yeah, and in particular, as the internet has developed, there's just been more options available to people to do financial transactions outside of banks. So, there's just a lot of opportunity for people to avoid what we think of this traditional financial institutions, which is a good thing. Yeah, sure, and things have changed a lot. So, what is your background that led you to be in this space? Well, I've been working primarily in marketing for several years working in, at retail after I graduated from Stanford years and years ago, worked at retail, but then started working at tech companies, and then moving into entertainment, I worked at Netflix when Netflix was just starting out, doing some email marketing for them. I spent some time over here at Warner Brothers, just down the street here in Burbank, doing social media marketing over there. I mean, what's more fun than doing social media marketing for Harry Potter and Lord of the Rings and The Dark Knight, and then we did some work with WB Games. I mean, we got to work with all the Arkham games that were coming out, at the time, so that was always a lot of fun. After I was at Warner Brothers, then moved on to do, we're starting to look into creating large-scale live events, kind of Comic-Con sort of events out there, and then also working on activations. There's just a real opportunity to work with, you have the entertainment brands who have a huge audience. They look at the eSports world and they want to be in front of that audience as well. So we were putting together some activations, working with eSports companies and some of the big studios here. Now you're in a great location for the US, for eSports. However, one thing I wonder is, are you working with kind of the primary locations for eSports like South Korea, Japan, China, Europe on your payment system? The way that we're structured right now, and because we've only been around for a little while, our system is set up to make payments from the US to other countries. So at some point down the road, we'll be able to work with, we'll have operations in South Korea and in these other locations. But right now what we're looking at is people in the United States that are interested in sending payments around the world. So why would, what would be the challenges that a tournament organizer would face that would lead them to seek help from you? Well, one of the things is, payments can be complicated to be done right and they have to be done right. They can be complicated, they can also cost a lot of money. You also have to make sure that the players have access to that money. So obviously if you're a player, if you're on eSports, you have internet connection, you have connectivity, but that doesn't mean you can always receive the money. So that can be a problem. Thanks. And other financial institutions, we found kind of have legacy technology. They're not maybe as swift moving as some other players out there. So if you're an eSports organizer and you want to work with an existing financial institution, that can be, if you can do it, it can also be kind of costly. So, and like we always say, the eSports companies, they wanna focus on the fun part. They wanna play games. They don't wanna be thinking about, how are we gonna get the prize money out there on time to the winners? And also eSports tournament organizers, what we're finding more and more is that they are really interested in setting themselves apart from other tournament organizers. If you're a tournament organizer, you're at the recruiting your players. But what you wanna have is you wanna have a system in place that pays the prizes on time and accurately. You know, it's interesting that you say that because as an eSports attorney and an eSports mediator, one of the primary conflicts that can occur is players not being paid, either from the team or either from an organizer. So, do you see this as kind of a way to avoid those litigation or disputes regarding that? Definitely, definitely. That's one of the really interesting things about your background there. Because the people, when we're talking to an eSports organizer, the people that like us the best are the finance people and their attorneys. Because we offer a solution that they don't have to worry about some of the headaches out there. And some of the eSports teams, you can read about not getting paid and there can be, maybe the money just isn't there, which is gonna be in some cases. But also it's just the mechanism isn't there because they haven't put those kinds of things in place. The other thing that you find with sending payments internationally, it's really regulated. It's highly regulated for all kinds of good reasons. And there's something we call compliance. And anyone that is sending payments globally, over cross borders, compliance is a huge issue because you want to make sure that you're sending money to people that are supposed to be getting the money. Because there's all kinds of issues with money laundering, with anti-terrorism watch lists, things like this. That's something that we can take off of people's plate. If you're doing a tournament and you have people all around the world, you're sending, you could be sending your money to a lot of different people. And you wanna make sure that you're not, no problems are coming up with the money that you're sending, who it is that you're sending the money to. And that's why we're really strong. We've worked really hard on having a really, really strong compliance with the regulations. So that, I mean, what could be worse than for an eSports organizer to find out that the money was used in some way that wasn't appropriate and that's just bad PR for them. And it's just like, and there's no reason to do that when you can work with a company that handles the compliance. It seems like there is a risk management element here too because I would think that a tournament insurer, like an event organizer insurer would be interested to know that the mechanism for paying prize money would was handled well, because if it's not handled well, that could mean litigation where the insurer has to step in and indemnify and provide a defense to the tournament organizer if there's a lawsuit. So what are your thoughts on that? No, that's really a good point. And again, you're coming from the legal aspect of it, which is really good because that's the kind of part of it that no one wants to spend a lot of time thinking about and worrying about, but they should because those are the things that come back to cause problems down the road. And that's why going with a payment processor like us, like Mass Pay, that you're able to, as the organizer, as the insurer, those people are also gonna be interested in making sure that, hey, this is a tried and true system and we know what it is that we're doing. And if you're a team or if you are a player, I would think that you would rather be participating in a tournament where you know that if you win or if you place that you are going to get your money, right? Oh, that's, yeah, that's huge because if you're the organizer, I mean, there's a lot of rules that you have to fill. But one of the most important ones is to attract good players. And good players are gonna be, they wanna be able to have access to their money. And they want the money paid on time. And if you can do that as the tournament organizer that can set you apart from other organizers that may not be as organized to make that happen. So, yeah, so there are benefits for the tournament organizer, but there's also the events for the advantages for the players as well so that they can benefit from the relationship as well. I would think that if tournaments that use MassPay as a trusted payment system, if there was like a logo or something of MassPay on the website of the tournament organizer or for a particular league or whatever or a series of tournaments that that might provide kind of an assurance of a certification that that was a tournament that knows how to issue payment. Yes, I mean, that's exactly where we would like to be as we get more clients and do more business to be seen as someone that has a reputation of quality, of follow through there of making sure that things work. We also though offer a white label program where if you're a larger tournament organizer, one of the things that's like, when you get your little prize, which maybe it may not be so little from a tournament, it's also there's a benefit for, I got paid from this company, this organizer. So in a lot of cases, what we're finding is people don't want MassPay to be the name necessarily. I mean, it's not necessarily a problem if someone's sending you money, you're gonna be happy in most cases. But if you can, if it's labeled, if it's branded with the tournament organizer making the payment, that's also something that has some value. Sure, and that has great social media value too, because obviously no one wants their business to have bad reviews on Yelp or get poor Twitter or Facebook or whatever comments. And I would think that you can assure the tournament organizer that they will be avoiding that. Yeah, yeah, and you're going down the right road there because in the world that we live in, bad news travels really, really fast. And so if there's someone that, if there's a tournament or something and the payments aren't being made, people talk about that. And also because the people who are gonna be talking about are the people that are gonna have the biggest audience out there with social media. So yeah, it's not something that is gonna be swept under the rug. It's gonna be fast and it's gonna be not good for anyone that has problems. There's not a big reason to go down that road. Sure, and so can you make payments on someone's smartphone or what mechanism are they paid? We actually, we offer five different kinds of payouts. We do local bank transfers. So there's a huge portion of the world that's unbanked, but there's a huge portion that are banked. So if it's a situation that whoever's receiving the money can get it as a bank transfer, what we're really happy with, what we're really proud of is that we do probably more cash payouts than anyone else. We have over 600,000 and growing locations worldwide. So in a lot of places, even if you don't even have to go to your bank, you could go to a store and get a cash payment based on the information that you have on your smartphone. We also have prepaid Visa and MasterCards, if those work. And we work with other mobile payment carriers out there. There's like what M-Pesa is big in Africa. There's about 41 million people who use that in Africa. I think primarily in Kenya, there's G-Cash, for example, is in the Philippines with another 40 million people there. So we work with those providers as well. And then we also do international bill payments, which is usually something for larger organizations from business to business type transaction. So we have different formats here. We've just tried to create a situation that can cover the most basis. So the most number of people can access the money that they're owed. I see. So a tournament organizer, I imagine, has a lot on their plate. But they also want to emphasize the fun. So does this allow them to just totally delegate all aspects of that to your organization? Yes. And the way, I mean, one way to look at it happening is, it's just a matter of they get to run the tournament, have the fun part, determine who the winners are, and they basically can just upload a spreadsheet with the information for the winners and the amounts and the funds. And it goes into mass pay. The recipient on the other end goes into their digital wallet and is able to access that money. So that's kind of the way it works in a nutshell. We can also work with an API. So let's say if it's someone that does a lot of transfers on a regular basis. So that's just seamlessly integrated into their own system. So yeah, we just want to make it really simple for whoever it is that's paying the money so that they just don't have to worry about, how am I gonna get all these winners paid? Sure, and about how long does it take from the time that you get the information to the time that the people get paid? We like to say instantly, it's real time. It's like, as long as we have the system set up in place, that there's really no lag in how quickly the money can be transferred. It's really pretty amazing how it works. It's very quick that way. So I'm a tournament organizer and I come to you and I say, I want to use your services. What needs to happen then? There's a good question, that's a good question. Because there's really two different ways that we can do that. Say if you want to just try it out and you want to say, yo, let's see how this works on our next tournament to see if you guys can really do what it is that you say you can do. We can set it up through an affiliated company with MassPay. You literally load up that has already been established with all the compliance in place. That's the key to this. And you load up the payments and the recipients and the amount and so on. And so it can be done pretty quickly as just kind of a trial basis. Now to set it up on an ongoing basis, takes about a month to be honest to get it set up. And again, because of compliance, because of the regulation that we want to go through to make sure that you're covered as the organizer and that we're covered as the payment processor out there. So it can take kind of about a month to get that set up. But then once that's established then you're off to the raises. Are there any tax implications here that are anything special that one would want to know? I have to be really careful on that one because I'm not a tax person. I'm not a tax person. What I would say is talk to your tax. You know what people always tell me when I ask that question is like talk to your tax, tax people. One of the things that we do is if it's a recipient that is entitled to tax documentation, let's say they're a recipient in the United States, then we send the, and again, I'm not the tax guy, but the 1099, whatever the form is to document the winnings. So we were able to create those tax documentation as well. The other thing is on the exchange rate. A lot of times when you're working with larger financial institutions, the exchange rate can be really, really tough to figure out and not very transparent. We try to make that super simple as well. So people understand what's happening with the exchange rate. Okay, so now tournament organizers in the United States would be issuing the prize money in dollars. But what if a tournament organizer from South Korea came to you and they said they wanted to use your organization? How would that work? Could you do it? Today we could not do that. Okay. Because the way that international payments work and we have to be regulated, we have to have connections with American, with US financial institutions to handle the transaction. Setting up those connections is not an easy thing to do, a simple thing to do. So over time, we're looking, one of the places that we think could be really good is Australia because there's a lot of eSports activity in that part of the world as an example. And eventually we'll be set up in a way that an Australian company, eSports tournament organizer could sign up with Mass Pay. Right now we can only work with US, although it's so we take the US dollars in but then the payments can be in the 200 currencies, 200 different currencies out there. Okay. So essentially you're dealing with US tournament organizers for now and then you're able to transfer the prize money throughout the world, right? That's correct. Okay. So I'm gonna give you the last word to tell people how they can find you and anything else that you'd like to tell us about? No, I really appreciate the opportunity here to explain a little bit more about what it is that we do because when we talk to tournament organizers, we find that we get a lot of interest. It's something that they're people, they know that they need to have taken care of and they want it to be hassle free and that's kind of the process that we are putting in place here. The best place probably a couple of places to get ahold of me, I can give you my email address which is T Leonard, T-L-E-O-N-A-R-D at leftmarketing.com, leftmarketing.com or one of the easiest places, find me on Twitter, Tom E Leonard, T-O-M-E-L-E-O-N-A-R-D, Tom E Leonard on Twitter. Find me there, I'm watching that all of the time. So feel free to reach out to me there on Twitter. Fantastic. Well, Tom, thank you so much for being here today and telling us all about MassPay. And I look forward to seeing less litigation and problems once you get in the game more. Yeah, so if we lower the number of attorneys that have jobs in eSports, right? Oh no, maybe I- It wasn't our fault. Speaking out of turn or something, okay. So anyway, thank you everyone for joining us today. Next week I'll be talking with Uzar Hazan about mobile eSports. See you then.