Integrated payments, card issuance: too complicated


We’re moving into the era of the super app, where payments are built into experiences rather than separate from them. For small businesses and FinTechs who want to offer banking services to end users and expand their brands in the process, the technical bar may be high.

John MacIlwaine, former CEO of Braintree and co-founder and CEO of High score, the first issuer processor to launch in a decade, told Karen Webster that it was essential to simplify logging in to banking services and integrated payments.

“I was shocked at the amount of innovation happening on the ‘front end’ of FinTech,” he told Webster. “There are digital banks and banking as a service, but at the end of the day there is so much existing infrastructure that supports it all. “

It has become a truism in commerce that the payment experience can be a competitive advantage – or a disadvantage. Those without the financial resources – or in some cases, development teams – available to integrate payments in-house may find themselves on the wrong side of innovation – and in this case, the most explosive digital switchover. that we have “seen over the past decade.

Too often these small businesses that aspire to integrated financing look to traditional vendors, whose platforms have been around for a while, but lack the capacity to run these small business customers with new functionality, such as the program card, without long delays and without high costs.

As a result, there is a mismatch between the pace of innovation early in the customer experience and what is needed throughout the back office. The platforms that took shape at the turn of the millennium date back to the days when there was no DoorDash or Instacart, when there was no need to issue virtual cards to consumers.

As MacIlwaine pointed out, modern use cases demand that businesses can leverage modern platforms to develop new services and products with speed and flexibility. Along the way, connected economies are taking shape, where consumers seamlessly move through their daily lives, choosing from loyalty programs and cards that cover their preferred retailers, restaurants and suppliers.

In search of the “whole” pile

“If we’re really thinking about the future and what businesses will need to be competitive in integrated finance, there has to be a solution that spans the entire stack – not just the customer acquisition and great consumer experiences, but down to processing and integration with other companies that bring those experiences to life, ”said MacIlwaine. This is a marked change from relying on legacy vendors or taking a do-it-yourself approach.

Highnote’s platform (the company serves as both an emitter and processor, and MacIlwaine said it’s actually the industry’s first new processor in a decade) can reduce the time it takes to a customer to launch a card and build his brand – against several months to a few weeks – thanks to its full-stack offer and its APIs.

MacIlwaine argued that one of the most difficult parts of building this connected economy and these integrated experiences is issuing cards – but doing so successfully will open the door to a range of other possibilities for a brand to. to cement the relationship with its end user. Highnote, with a “horizontal” orientation, gives developers the ability to customize payments and offer, for example, access to wages earned on general-purpose reloadable cards.

The value of having deeper digital banking relationships with a range of non-banking providers is there. PYMNTS ‘own research found that a significant portion of consumers – 41% of them, in fact – would be comfortable having a banking-like relationship with their employers.

And in other use cases illustrated by MacIlwaine, a customer at an ecommerce checkout with their favorite merchant could potentially be offered a branded prepaid or debit card that would allow them to get a discount, everything. by simultaneously accumulating loyalty points and rewards.

Traditionally, these affinity programs have been reserved for some of the bigger brands, such as hotels, airlines, and super big names. Issuing branded cards, or offering a Buy It Now, Pay Later (BNPL) setup (without having to involve Affirm or other vendors), can democratize financial services, a he declared.

And in a nod to true connectivity, MacIlwaine said that a fleet company can leverage telemetry and card issuance to create an earned paycheck access card to deliver payouts as they go. and as the kilometers on the road are recorded.

The conversation between MacIIwaine and Webster took place against a backdrop where, by the end of last month, Highnote had raised a combined $ 54 million through the Seed and Series A funding rounds and stepped out of “stealth” status. Oak HC / FT led Series A and co-led the seed with Costanoa Ventures, and additional investment came from XYZ, SVB Capital and WestCap. Angel investors Bill Ready (the current president of commerce and payments at Google and former COO at PayPal), as well as Renaud Laplanche, CEO of Upgrade, also participated.

Considering the card issuance landscape as a whole, MacIlwaine said there is room for multiple players – for platforms like Highnote as well as incumbents like Marqeta.

“It’s a big, big market – a multi-billion dollar addressable market,” he told Webster of the show and treatment. And while the tasks of complying with PCI standards and integrating into payment networks is hard work, he said, “once you have that platform and you ‘own’ the platform. full stack, you can pivot quickly – and these companies can make their dreams come true in terms of what they’re trying to do for their employees or their customers.



On: Forty-seven percent of U.S. consumers avoid digital-only banks due to data security concerns, despite considerable interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can boost privacy and security while providing convenient services to meet this unmet demand.


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