How Jim Kolchin Went From Appliance Repair to a Billion in Processing Volume

Hello there. This is Hugh Hornsby with the podcast Blue Collar [00:00:35] Smart, built different, trades proven, underdog tested. Today, [00:00:40] I'm excited to have Jim Kolchin, the founder of iWallet. Jim, [00:00:45] tell us a little bit about iWallet, how you started it, and where you are, [00:00:50] and how we ended up here today talking about payment processing. Yes. Uh, [00:00:55] hi, Hugh. Thank you for having me. My name is Jim. I'm the founder and CEO of [00:01:00] iWallet. We are a San Francisco-based startup that, uh, started as a [00:01:05] help for contractors, and I'm a, I'm a contractor myself. Uh, [00:01:10] and it became a financial operating system for the whole home service industry. [00:01:15] We help manufacturers, uh, distributors, contractors, and [00:01:20] homeowners, uh, to connect payments between each other Um, so [00:01:25] super excited, uh, to be a part of the industry and, um, to help, [00:01:30] uh, other, um, industry players. So Jim, uh, tell [00:01:35] us about, uh, how you got started, and I think you just hit a [00:01:40] milestone just recently. Can you talk a little bit about that? Yeah. [00:01:45] So, um, uh, I started, uh, as a solopreneur. [00:01:50] Um, uh, so I, I started my first business just a year after, [00:01:55] uh, coming to America. Um, I was, uh, repairing appliances and [00:02:00] air conditioners. Uh, built a business from, uh, zero [00:02:05] to eight digits, um, and, uh, always had [00:02:10] this problem with payments in the industry and, [00:02:15] um, finally I decided to do something about it, uh, as a contractor. So [00:02:20] this particular app is built, uh, first of all, um, for [00:02:25] contractors, uh, by contractors. Um, and, uh, [00:02:30] now we just hit our major milestone of processing over a billion, [00:02:35] uh, in annualized gross processing volume. Say that again. Did [00:02:40] you say that you hit a billion? Yeah, over a billion in gross [00:02:45] processing volume, what we call it. Well, congratulations. That's a, that's a major [00:02:50] milestone. When you take a look at that billion, [00:02:55] and obviously you started with an idea and now it's at a billion, [00:03:00] when you talk to contractors, what is it that, that this payment [00:03:05] processing that you're doing does for them, um, that really [00:03:10] is different than what any other payment processing that has out there? So [00:03:15] contractors, um, get paid faster and, uh, make payments [00:03:20] easier with iWallet. iWallet is this all-in-one payment [00:03:25] platform that is built specifically for the home service contractors. Contractors can [00:03:30] accept credit cards, ACH, checks, offer [00:03:35] financing, send payment links and invoices, and collect payment in the field or remotely.[00:03:40] We integrate with software, uh, contractors already [00:03:45] use, such as ServiceTitan, Housecall Pro, Jobber, et cetera, et cetera. [00:03:50] So payments and reconciliation fit into the existing workflow [00:03:55] The basic pitch is simple: give the customer every way to pay, [00:04:00] get the contractor paid faster, and make the back office easier Now, [00:04:05] did I also hear something that it also gives the home services [00:04:10] contractor the ability to, to, uh, take tips if that's something that they, they [00:04:15] want to for the service that they give? Correct. So we have what we [00:04:20] jokingly call the tipflation right now. Uh, you know, tips are [00:04:25] everywhere, even self-serving kiosks now, um, now asking for tips. [00:04:30] But, you know, the industry that, um, has really, [00:04:35] um Uh, did not, um, you know, hasn't [00:04:40] ch- it hasn't changed since the very beginning, uh, a- a- and that is the home service industry [00:04:45] on the tip side. Uh, and, uh, this is what we're changing. We [00:04:50] actually, um, we believe the technicians [00:04:55] and people in the field, uh, deserve to make tips as well because [00:05:00] they work really hard, and they provide real service. Um, [00:05:05] and, uh, this is what we're changing. A- and I know some of the [00:05:10] contractors, some of the business owners don't like that, uh, but that's just where [00:05:15] things are going, and, uh, technicians love it. Um, you know, [00:05:20] technicians, uh, actually align their motivations with the motivation [00:05:25] o- of the company, if you think about it, when, uh, you allow your technicians to make tips. We have [00:05:30] some technicians that are making over $1,000 a month in tips. Wow, that, [00:05:35] that's huge. And I would think that that would be something that it would put them [00:05:40] in a position to give better customer service, uh- Correct to the client [00:05:45] themselves. Uh, Jim, um, when you take a look at [00:05:50] iWallet, you know, you, you kind of break it down with the contractor side. Is there anything else that [00:05:55] g- that's going on with the contractor side that you wanted to share with everybody? [00:06:00] Yeah, so a lot's going on on the contractor side. Um, you know, one of the [00:06:05] new things that we're working on is fuel cards. Uh, iWallet is a new [00:06:10] way to allow your contractors to pay for gas. Um, [00:06:15] it's a new way to get Google reviews. Uh, we've integrated reviews right into [00:06:20] the checkout experience, so it's really great and easy to do reviews. It's [00:06:25] also, um, a new way, uh, to do financing. Uh, [00:06:30] we've integrated all, um, all, all of the payments. You know, it's like a payments [00:06:35] center now, um, for contractors where they can do everything, um, [00:06:40] in one place. Um, a- and, uh, yeah, many other things, like you [00:06:45] can, um, run PayPal, uh, and Venmo through [00:06:50] iWallet. Um, you, you take pa- bank app, uh, um, [00:06:55] payments and, um, all kinds of, uh, things that are really [00:07:00] anything and everything related to accepting payments, um, iWallet is [00:07:05] doing it for contractors. Now, that's on the contractor side. Let's, let's talk a [00:07:10] little bit about the manufacturer side because I think, uh, and, you know, you and [00:07:15] I have had some conversation in the past about the, the challenges of warranties [00:07:20] for manufacturers, and I think that you're starting to do some things there [00:07:25] to try to simplify that process. Can you, can you share with us what that is? We [00:07:30] like to think o- of ourselves as closing the gap between, uh, the [00:07:35] manufacturer and, uh, the contractor. Um, because what we [00:07:40] found is that most manufacturers lose visibility into their product, [00:07:45] uh, once they, once they, uh, they leave the distributor. iWallet [00:07:50] can turn a simple photo into a digital warranty registration.[00:07:55] The contractor or homeowner takes a picture of the installed equipment. [00:08:00] Our OCR/AI identifies the product and captures the [00:08:05] information needed for registration. This gives manufacturers [00:08:10] a much better way to know who actually owns the product [00:08:15] Where they were installed and when, while making warranty registration dramatically [00:08:20] easier for contractors and homeowners. So right, instead of, uh, [00:08:25] filling out 33 fields in the field, uh, like [00:08:30] manufacturers normally expect technicians and homeowners to do, you just take a couple of pictures. [00:08:35] So it creates a digital connection between the manufacturer and end customer for [00:08:40] future warranties, service, parts, accessories, rebates, and other [00:08:45] programs. And, and how are they doing it today, Jim? Yeah. Uh, today [00:08:50] it's all manual. T- today it's actually not done, barely done at [00:08:55] all, uh, because it's so difficult. Consumers are usually not doing it. Um, [00:09:00] contractors are, are barely doing it, and it's a problem, uh, for a lot of [00:09:05] manufacturers. There, there is no feedback loop. Um, a- and, uh, this is an [00:09:10] opportunity to improve, to improve manufacturing, to get feedback from the field, [00:09:15] and to provide better experience to the homeowners. And, and access to those [00:09:20] homeowners that are buying their product, I think that would be huge. So the, the other [00:09:25] place that iWallet is active in is with the distribution side, [00:09:30] and I think that, uh, you shared with me the challenges of credit [00:09:35] cards being paid and, uh, can, can you go, go into that a little bit [00:09:40] on what this, what this could do for a distributor? Yeah. [00:09:45] Uh, distributors have their own set of, uh, problems. We [00:09:50] have-- we've developed three major opportunities for distributors. [00:09:55] First one is called iWallet Zero. Um, it allows distributors to [00:10:00] compliantly pass eligible credit card processing costs to [00:10:05] the customer while automatically identifying debit cards and other transactions [00:10:10] that cannot be surcharged. ACH and checks can remain free [00:10:15] alternatives. For a large distributor, this can eliminate millions of dollars in [00:10:20] annual cr- uh, credit card processing expenses. Uh, so we, we just make [00:10:25] distributors more profitable. How are most of the distributors doing it now? I know they're all different, [00:10:30] so it's not a one-size-fits-all, but what are you hearing out in the field on [00:10:35] how it's being handled? Yeah. Distributors are just complaining. Um, credit [00:10:40] card processing cost, uh, um, is one of the fastest growing [00:10:45] categories for them. Uh, and they're not really doing much about it. They don't [00:10:50] know what to do about it. Um, a-and, uh, there are no good [00:10:55] solutions out there. Um, but iWallet has built this. I-iWallet has this [00:11:00] iWallet Zero that can essentially wipe out all of the credit [00:11:05] card processing costs to the distributor. I, I, I would think that that would be millions of [00:11:10] dollars for some, some of these wholesalers. Listen, Jim, I, I wanna say thank you. [00:11:15] I mean, I think it's amazing what, what iWallet has done, uh, breaking that [00:11:20] down into the three segments: the contractor, the manufacturer, and the [00:11:25] distributor. At one time, you talked a little bit about the B2B2C.[00:11:30] Is, is that something that still iWallet is, is, is, uh, in the middle [00:11:35] of, even though it doesn't seem like that most people are looking at B2B2C? [00:11:40] Sounds like iWallet has, has taken a lead on [00:11:45] B2B2C. And can you explain to the, to the audience what that really means? [00:11:50] Yes. This is our second major opportunity for distributors, and [00:11:55] this is the future. Uh, but not a lot of distributors are ready for [00:12:00] it. Uh, the biggest companies are moving in that direction. Um, [00:12:05] but, uh, smaller companies unfortunately, uh, we see are still struggling, and that's where we come [00:12:10] in. So we call it, um, Bundle iWallet for Contractors. [00:12:15] Um, the idea is that distributors can offer iWallet to their [00:12:20] contractors, customers as a value-added benefit. Contractors [00:12:25] get modern payments and financing tools while distributors strengthen their [00:12:30] relationship with contractors and can potentially participate economically as the [00:12:35] program scales. The idea here is that you can sell through your [00:12:40] e-commerce website. Uh, you can allow your contractors to sell [00:12:45] through the e-commerce website, right? That-- I like how you put it, uh, Hugh, the [00:12:50] other day. Uh, you said, uh, "You can sell through your website," right? That's basically what that is. [00:12:55] Well, Jim, thank you for, for meeting us over here on Blue Collar Smart. [00:13:00] It's, it's always amazing to listen to the things that iWallet is doing and how [00:13:05] progressive that you are. Congratulations on hitting one billion. [00:13:10] Um, that's a, that's a milestone for any business. Just want to say, [00:13:15] hey, thanks, thanks for the friendship and just thanks what you're doing for the home [00:13:20] services industry. Of course. Uh, my, my pleasure, and thank you for having me, Hugh. One [00:13:25] last thing before we go. Uh, the third, uh, major opportunity [00:13:30] for distributors that, uh, I, I forgot to mention is the AI accounts [00:13:35] receivables, AI AR. Uh, a-and, uh, what that does [00:13:40] is it's our, um, AI AR system that helps automate [00:13:45] collections, uh, starting with a huge volume of smaller invoices that are expensive for [00:13:50] human AR teams to chase. It can follow up with customers, [00:13:55] facilitate payments, and escalate the accounts that can actually need human attention. This is [00:14:00] another one of those big opportunities where we can save distributors, uh, a lot of time and money. And [00:14:05] I, I would think that's mostly on the distributor side that you're talking about. Correct. Yes, yes. [00:14:10] And, and, and you, and you-- I think you've heard in the past that it's, it's some of those [00:14:15] counts on-- a-accounts, uh, and slow p-payment accounts that are on the [00:14:20] bottom end that a lot of the, um, a lot of the AR teams just don't have [00:14:25] time to really mess with that, and I, I think that this is a place that you really fill, [00:14:30] fill that gap. ​[00:14:35] [00:14:40] [00:14:45] [00:14:50] [00:14:55]