Jose Rodriguez

I’ve been having tons of conversations with executives at sponsor banks and fintechs, and many are at a loss of how to stay ahead of the regulatory scrutiny that the BaaS industry is under (📣 BaaS is not in crisis, but it is under scrutiny!). We reviewed every consent order targeting BaaS banks by the OCC, FRB and FDIC, and our latest guide includes actionable recommendations for banks (and their fintech partners) to implement to resolve the deficiencies most frequently highlighted by regulators, including: 🤝 Ownership of compliance and outsourcing to third-parties 💻 Insufficient screening at both sponsor banks and fintech partners 📄 Deficient compliance tech stack testing ⛑️ Inadequate staffing that doesn’t keep up with growing compliance needs Any of this sound familiar? Guide with action items and how-tos: https://lnkd.in/ePYqgrFS 

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Plaid Introduces Pay-by-Bank Solution for Recurring Payments "...“Every company is looking to grow and lower costs,” Brian Dammeir, general manager and head of payments at Plaid, said in the post. “Getting more customers to pay directly with their bank account for more types of payments is a clear way to do both. In fact, when we combine a great user experience with optimal verification and intelligent risk assessment, Pay by Bank for Bill Pay can deliver a more reliable experience than cards.” This solution’s embedded experience increases adoption by allowing users to select or search for their bank without leaving the payment experience and by letting remembered users within the Plaid Network receive one-click experiences, according to the post..." #paybybank #embeddedfinance #billpay #recurringpayments PYMNTS _________________________________ If you want to immediately see new content that I curate 👉🏻 Ring my bell (🔔) and follow #informationbanker or Informationbanker and if you want to get the posts that got noticed in my weekly What’d I miss newsletter, subscribe here: "https://lnkd.in/d5_KvWwu"

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Big news came recently that Moov has partnered with Jack Henry to embed Visa Direct and Mastercard Send to enable push-and-pull to debit for their core banking customers. I will be onstage today with Ben Metz CTO at Jack Henry Connect to share more and what we are doing tp help SMB's! This launch is solving one of the biggest pain points for smaller banks and credit unions competing with big banks - speed of funds movement. Bank customers on a Jack Henry core can now link external debit cards for instant money movement in and out of accounts over the card networks. Moreover, we've added tools like Account Name Inquiry and Address Verification to decrease fraud, a critical concern for banks adding instant payment functionality. Some real examples: ◼️ My HELOC payment is due. Move money from my external account the same day. ◼️ My big bank frustrated me with a fee, open and fund my new small bank account same day. ◼️ I need to send my vendor money for supplies. Push to her debit card instantly. ◼️ My credit card's auto pay went through today, pull money from my external account instantly. Yes, customers can use Zelle or Remote Deposit capture to transfer funds. But, every bank offers a debit card, allowing ubiquity in real-time money movement through the existing account transfer user interface. This is a game changer because it helps those banks achieve parity with the money centers and surpass the user experience of most regional institutions. If you are at Jack Henry Connect, introduce yourself at the welcome reception! #JHConnect Press Release Here:

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Tomorrow! Join our webinar to learn how card issuers and merchants can collaborate to reduce card declines

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Business model: How BaaS platforms help brands monetize Banking-as-a-service platforms monetize in three primary ways: - Interchange split - Per account fee per month - Subscription fee Like traditional SaaS businesses, some platforms charge a recurring subscription fee based on the specific services and features customers want to offer, e.g. $10,000 a month for access to deposit accounts or $5,000 a month for a card program. Others charge a per monthly fee per user to get access to the platform, tied to the number of customers that the fintech has. For a fintech with a million users and a per user fee of 10 cents, their total per user charges would amount to $100,000. These kinds of platform fees might be more common in fintech verticals with less transaction volume, where they could be used to lock in revenues. The majority of BaaS revenue, however—roughly 60%—comes from interchange, which is the fee set by the card networks for using their payment rails to move money, paid by the merchant, and split among the various participants in a given transaction. For an example, say you are browsing through items via the Klarna app (a fintech) and you decide you want to buy a $200 hat from a store that doesn’t have a native integration with Klarna: - Klarna instantly issues you a virtual card with exactly $200 preloaded onto it, that will only work at the merchant of your choosing, via Marqeta (their BaaS provider) - The merchant pays a percentage of that $200 in interchange fees to their issuing bank + their BaaS provider—here, Klarna and Marqeta - An assessment is also paid directly to the card network in exchange for using their payment rails Broadly speaking, consumer debit interchange is 1.35% and commercial transaction charges 2.5% interchange. Of that, we assume: - the card network takes 0.5%, which goes down over time as scale goes up. - the issuing bank takes 0.2%, which also goes down as volume goes up. - the program manager takes 0.25%. In the end, this would leave the BaaS roughly 0.12% for B2C transactions and 0.5% on the B2B side, while their fintech customers take roughly 0.28% for B2C and 1.05% on the B2B side. However, at scale, the bank’s take rate is compressed, and the take rates at the top of that stack can expand. These attractive unit economics are made possible by the fact that when Congress limited the interchange rates banks could charge with the 2011 Durbin Amendment, they specifically exempted banks with under $10B in assets from the changes. Working with smaller banks like Sutton, Cross River and Green Dot, fintechs and BaaS companies earn about twice as much on interchange as they would in working with a big bank. Regardless, interchange revenue does carry risk, because regulators could end this form of “regulatory arbitrage” and make it more challenging for BaaS companies and issuer processors to build their business on interchange. Source Sacra #banking #bankingasaservice #fintech

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Business model: How BaaS platforms help brands monetize Banking-as-a-service platforms monetize in three primary ways: - Interchange split - Per account fee per month - Subscription fee Like traditional SaaS businesses, some platforms charge a recurring subscription fee based on the specific services and features customers want to offer, e.g. $10,000 a month for access to deposit accounts or $5,000 a month for a card program. Others charge a per monthly fee per user to get access to the platform, tied to the number of customers that the fintech has. For a fintech with a million users and a per user fee of 10 cents, their total per user charges would amount to $100,000. These kinds of platform fees might be more common in fintech verticals with less transaction volume, where they could be used to lock in revenues. The majority of BaaS revenue, however—roughly 60%—comes from interchange, which is the fee set by the card networks for using their payment rails to move money, paid by the merchant, and split among the various participants in a given transaction. For an example, say you are browsing through items via the Klarna app (a fintech) and you decide you want to buy a $200 hat from a store that doesn’t have a native integration with Klarna: - Klarna instantly issues you a virtual card with exactly $200 preloaded onto it, that will only work at the merchant of your choosing, via Marqeta (their BaaS provider) - The merchant pays a percentage of that $200 in interchange fees to their issuing bank + their BaaS provider—here, Klarna and Marqeta - An assessment is also paid directly to the card network in exchange for using their payment rails Broadly speaking, consumer debit interchange is 1.35% and commercial transaction charges 2.5% interchange. Of that, we assume: - the card network takes 0.5%, which goes down over time as scale goes up. - the issuing bank takes 0.2%, which also goes down as volume goes up. - the program manager takes 0.25%. In the end, this would leave the BaaS roughly 0.12% for B2C transactions and 0.5% on the B2B side, while their fintech customers take roughly 0.28% for B2C and 1.05% on the B2B side. However, at scale, the bank’s take rate is compressed, and the take rates at the top of that stack can expand. These attractive unit economics are made possible by the fact that when Congress limited the interchange rates banks could charge with the 2011 Durbin Amendment, they specifically exempted banks with under $10B in assets from the changes. Working with smaller banks like Sutton, Cross River and Green Dot, fintechs and BaaS companies earn about twice as much on interchange as they would in working with a big bank. Regardless, interchange revenue does carry risk, because regulators could end this form of “regulatory arbitrage” and make it more challenging for BaaS companies and issuer processors to build their business on interchange. Source Sacra #fintech #bankingasaservice Leda Florian Alex Ali

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Data Sharing between merchants and issuers that really works. What Capital One has built and has demonstrated for well over a year now is with additional data fields (and a fairly minimal set too) they can increase acceptance and decrease fraud. It is the promise of 3DS and data sharing that we have been working on and talking about in the industry for over 30 years (maybe longer but that's when I started). This partnership with Capital One and two innovative acquirers Stripe and Adyen could really be the start of the next big wave of innovation in our industry. I am so excited to watch this space. Watch this space. I am optimistic other issuers will join the platform, and I know other acquirers certainly will. What a great step forward in the industry for consumers and merchants and the entire ecosystem!

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 🎉 Ansa — the fintech infrastructure solution enabling merchants to launch branded customer wallets — has just raised a $14 million Series A funding round! 🎉 Published today in TechCrunch, Ansa CEO Sophia Goldberg spoke with Senior Reporter Mary Ann Azevedo to talk about how Ansa's latest financing marks a significant milestone in their journey to reshape the future of commerce – with female investors contributing 95.6% of the total funding. Ansa, co-founded by Sophia Goldberg and 👨🏻‍💻 JT Cho, is building a “wallet-as-a-service,” or embedded customer balances to let any merchant launch a branded flexible payment instrument. According to Goldberg, it can also allow a merchant to fund with incentives or refunds. By using its API-first platform, a merchant can create a wallet “within weeks rather than quarters.” "Branded customer wallets enable merchants to offer a payment solution which fits their use cases better,” says Goldberg, “while driving customer loyalty and frequency." With a focus on coffee shops, quick-service restaurants, and marketplaces, Ansa is poised to disrupt traditional payment systems and drive customer loyalty through innovative solutions. Congratulations to the entire Ansa team on this exciting milestone! For more details, check out the full article here: https://lnkd.in/eQ_HgG2S #Fintech #Startup #DigitalWallet #DigitalPayments #SeriesA #Investment #WomenInTech #FundingRound #VC #Tech #Payments

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Who’s ✈️ headed to eTail™ East’s 25th anniversary conference in Boston on 8/12? I’ll be there representing Zip Co! Let’s connect and chat 💬 about the current BNPL landscape, innovative 💡products/solutions on the horizon at Zip, plus BNPL growth strategies 📈 that major brands are using today, like: 1. How BNPL fits in the payments stack 2. Preventing BNPL from cannibalizing PLCC 3. How to promote BNPL customers into PLCC holders and loyalty members 4. Personalizing payment offerings and tailoring them to the right customer set 5. Incremental growth Vs tender exchange 6. The overlooked customer set: (aka 33% equal to 100M+ Americans) 7. New CFPB regulations on BNPL 8. Protecting consumers against predatory and expensive LTO options 9. Reducing cost of payment acceptance And more! (NFL 2025 Super Bowl predictions anyone?) #eTail #BNPL #ecommerce #retail #consumerfinance #Zip #BuyNowPayLater #eTail25 #retailtech #eTailBoston #payments #omnichannel #Partnerships #Enterprisesales

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🌍 From the CEO’s Desk: Why Psi Finance is Leading the Charge in Remittances and Cross-Border Payments 🌍 Every time we see advancements like DailyPay, Inc.'s expansion with Visa to provide global remittances, it underscores what we’ve known for years: the need for accessible, instant, and affordable cross-border payments has never been greater. At Psi Finance, we’re not just building a product – we’re creating a platform that changes how people experience financial connectivity. I’ve lived through the challenges of costly, delayed remittances firsthand, and it’s what drives our mission. Here’s how PsiFi is poised to make an impact: 1. Instant, Low-Cost Payments: Remittance fees are high and delivery is slow in the traditional space. PsiFi is cutting through the noise with instant, nearly free transfers to ensure families receive the support they need quickly and affordably. 2. Inclusivity at Our Core: Whether for immigrants sending money home or international workers supporting loved ones, we’re here to make cross-border payments accessible to everyone, no matter their background or location. 3. Built for Growth: As we roll out PsiFi’s freemium model, users will enjoy free transfers monthly, with rewards for referrals – all part of our commitment to financial inclusion and transparency. Remittances are personal; they’re often lifelines. At PsiFi, we’re building a future where these critical connections are affordable, seamless, and secure. The world deserves a payments platform that’s as connected and accessible as they are, and we’re ready to deliver. Here’s to a more inclusive financial future! #PsiFi #Remittances #GlobalPayments #FinancialInclusion

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Affirm Updates BNPL App Ahead of Holiday Shopping Season "...Our app update prioritizes what our consumers want the most: to quickly discover their favorite credit offers from Affirm, seamlessly manage their payments, and see their real-time purchasing potential,” Affirm Senior Vice President of Product Vishal Kapoor said in the release. Affirm research found that half of consumers think 0% APR financing options are just as valuable, if not more valuable, than traditional discounts, while more than half are using installment payment options to make purchases more affordable, per the release..." #bnpl #creditoffers #tealtimepurchasing #zeropercent #consumerfinancing #payments PYMNTS Informationbanker

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We are true believers in "The people who are crazy enough to think they can change the world are the ones who do.” We challenge ourselves and the status quo. We build things that are hard enough to keep us up all day and night. Here is a small public demonstration of what this means: Our team at Bulkpe is going to ship a new feature every day for the next 30 days. Join us on this journey as we push boundaries and redefine business banking! #Bulkpe #fintech #30DayChallenge

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Here's a great highlight for today -- fintech companies that are doing good things. Finance and good deeds are not mutually exclusive. These companies are both inspiring and innovative. Perfect for this Monday morning! #Fintech #FinanceTech #Growth

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This is giving me Deja Vu. I was in cross border payments back in 2015 when “Operation Choke Point” was in full swing. Basically a full court regulatory press on MSBs that locked many out the banking system. At the time, it was painted as these guys being money laundering masterminds. Then I met them personally and realized they were small business owners serving their communities - being locked out of banking with a dramatic narrative. My two cents: These banks are not risk taking cowboys. They are supporting an important innovation ecosystem, which by definition, requires figuring things out. If every fintech sponsor bank moving forward needs to assume a 50% + probability of an enforcement action, innovation will die. Where’s the balance? How does the industry fight back? Personally, I don’t want to live in a world where old school banks are the only option.

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Walmart-backed fintech One introduces buy now, pay later as it prepares bigger push into lending. The move puts One in direct competition with Affirm, the exclusive provider of installment loans for Walmart customers since 2019. There are signs that One is making a deeper push into lending beyond installment loans. "Walmart intends to offer its branded credit cards through One in the future,” Capital One said last year in response to Walmart’s suit. “With One, Walmart is positioning itself to compete directly with Capital One to provide credit and payment products to Walmart customers.” One has obtained lending licenses that allow it to operate in nearly every U.S. state, according to filings and its website. The company’s app tells users that credit building and credit score monitoring services are coming soon. https://lnkd.in/eC-iKjeB #digitalbanking #corebanking #bankingsolutions #payments #fintechsolutions #digitaltransformation #fintech #baas #neobanks #challengerbanks #embeddedfintech #creditunions #communitybanks #embeddedfinance #nichebanking #bnpl

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🚨 Payments geek out alert.  Michele Alt and I are having Bryan Derman and Christopher Uriarte on Radically Clear tomorrow (Friday) at 3 ET/ 12 PT to discuss the future of payments.  Specifically, reactions to recent developments around faster payments, regulation of card network economics, and open banking. The idea came to us after we had a blast on the Glenbrook Partners Payments on Fire podcast.  There’s nothing better than geeking out with people who are super deep in adjacent areas to your own expertise. The link to the podcast and transcript is also in the comments, but if you don’t have time to click through three of my key takeaways from the discussion were: 1️⃣ Everyone loves community banks (almost as much as dogs!), but increasing returns to scale is making it harder for them to compete.  The key to a healthy community bank sector going forward? Making sure community banks have the flexibility to open complementary digital businesses and grow in order to continue serving their communities well. 2️⃣ The key trade off between working with a partner bank and getting your own licenses?  Working with a partner bank can help you get to market cheaper, faster, and with oversight from experienced hands to help you get it right.  By contrast, getting your own licenses gives you greater control and flexibility as you develop your products and services. 3️⃣ We think about the CFPB’s proposed 1033 rule as mainly about consumer access to data.  But it has the potential to upend payments too, potentially allowing service providers permissioned by the consumer to initiate push payments to consumer accounts.  Watch for how that turns out in the final rule. Hope you can join us tomorrow for part 2 of this awesome discussion.  Everything you need to join is in the comments.

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🔊 Big news for FastSpring sellers! We've just launched some awesome payment upgrades to make checkout a breeze for your customers and open up some exciting new markets! ➡️ Apple Pay: Dive into the Apple ecosystem with a seamless transaction process. This integration lets them buy with a tap – perfect for those who love the Apple ecosystem's smooth buying experience. ➡️ Pix for Brazil! 🇧🇷 : Boost your market presence in Brazil with Pix, the country’s favorite payment method. Easily reach a major new customer segment without the hassle of cross-border fees. ➡️ Preferred Payment Method: Simply give your customers what they want! This feature helps reduce cart abandonment by offering familiar payment methods, increasing transaction completion rates. These updates, along with expanded PayPal support in China and improvements in the EU and UK, are designed to enhance your global sales strategy. 🌐 Tap into these powerful tools to personalize and streamline your customers' buying experience. https://lnkd.in/edwQyzsR #payments #PaymentSolutions #Apple #Pix #Brazil

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Today, I’ll be taking the stage at the Mastercard Acceptance Summit 2024 in Miami. This annual gathering is a cornerstone event for the payments industry. It brings together issuers, acquirers, merchants, fintechs, and enablers to explore how innovation and strategy can drive growth in underpenetrated verticals. My keynote is about "How To Turn Acquiring Into A Success," a step-by-step Strategy session on how acquirers can evolve from traditional models to become indispensable partners for merchants by embracing modern strategies, such as developing their own value-added services, vertical specialization, and more. Besides leveraging the insights that I have created over the last 20+ years in payments, while working at Acquirers such as Adyen and Checkout.com, I have also used the strategies that I have used to help over 50 payments companies grow their acquiring business. My keynote will touch on how the industry’s challenges are also its greatest opportunities, ranging from commoditization to rising merchant demands and technological disruption. These challenges demand new thinking, and the goal of my talk is to inspire actionable strategies for acquirers to not only keep up but lead the way. To my peers in the industry, if you’re attending the summit, I’d love to connect. Let’s share ideas on how we can shape the future of payments together. P.S. In case you are not attending but would still like to learn these Strategies, feel free to check out my newsletter https://buff.ly/3RXzt7Z

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