Why the Time is Right For FinTech as a Service
In the wake of the very exciting news surrounding our recently announced Series B fundraising with Stripe, General Catalyst, Target Global and others, I’ve been reflecting on how we got here and thinking a lot about what Rapyd is looking to achieve in the coming years.
Our path to success has not been direct, but I wouldn’t trade it for anything. It has put us in the company of some of FinTech’s most accomplished companies, pursuing what could potentially be a trillion dollar opportunity. I and the Rapyd team are elated to be embarking on this new chapter with such capable partners, yet it all started with a fairly simple realization:
Much of the modern fintech ecosystem is fractured, disparate, and plagued with inefficiencies.
In what now feels like another life, my co-founders and I learned firsthand just how difficult it can be to innovate in this space. Rapyd started out as “CashDash,” a B2C e-wallet product intended to address the challenges consumers were facing at the intersection of mobile adoption and payments. Our initial offering of support for a single country’s payment methods ended up requiring integrations with 7 different products and systems. Each had its own unique architecture, requiring bespoke development from own engineering team. Add to that the need to have a country-specific e-Money license and our efforts to meet the necessary regulatory requirements kept us buried in red tape — even as we worked to solve a wealth of technical challenges. This was all for a single country — something that just wasn’t scalable.
While startups in other verticals had to deal with the classic build-vs-buy conundrum, we weren’t so fortunate. There was nothing to buy. Gaining any sort of market traction would require 12 to 18 months of engineering, connecting decades-old systems that were never intended to work harmoniously. It was a barrier to innovation that we ourselves were surprised see, and while I’m incredibly proud of what we were able to accomplish, it quickly became clear that there was a greater opportunity staring us in the face.
There was clearly a need to create the infrastructure for global FinTech applications. But this would require following the precedent set by cloud-computing solutions like AWS, Microsoft Azure and Google Web Services. So, we pivoted and set out to create a solution that would meet the needs of businesses like our own.
Rapyd is the platform I wish we’d had when we started CashDash. It was the “aha” moment we needed.
By providing a link between today’s thriving, tech-forward business community and the legacy financial systems that still drive the majority of global commerce, we hope to unlock a new playing field for financial innovators everywhere. It’s an approach we are actively building, and it is called Fintech-as-a-Service, or FaaS. We’re confident that it will play a pivotal role in the next generation of disruptions to shape global markets.
Consider that Rapyd’s platform can — from the same cloud-based platform — enable both a simple case, like helping a merchant collect payments in 1000+ locally-preferred ways in 100+ countries, or a more complex scenario of a large consumer brand wanting to offer their own international e-wallet solution, with ID Verification, AML screening, local top-up of a wallet, integrated FX, payments both locally and cross-border, payment disbursement, and loyalty program management.
We’ve taken a three-pronged approach to deliver on the promise of FaaS, each designed to address the most pressing challenges facing e-commerce merchants, on-demand/gig economy platforms, digital marketplaces, online financial services, and any other commercial entity for whom financial, payments, and money movement services play a major role. They are:
A Unified Tech Stack
It quickly became clear that in order to succeed, our FaaS offering would need a single, integrated technology stack designed from the ground up to afford product managers and developers maximum flexibility when it comes to crafting high-quality user experiences that are localized to account for in-country and cross-border commerce. Rapyd consolidates all financial management, payment, and money movement services that modern business need to build effective applications through a single, global, scalable API. This itself involves a number of moving parts:
- Receiving payment or collections in 100+ countries in 1000+ locally preferred methods, including bank transfers, locally issued cards, eWallets, in stores, and even via cash
- Compliance — Identity Verification (KYC) and Anti-money Laundering screening
- Foreign Exchange Management — allowing users to hold 65+ currencies or payout in 170
- Disbursing or paying out funds in 170+ countries via similar methods, including bank transfers, eWallet transfers, instant card-to-card payments, paying bills, or cardlessly in cash
- eWallet features such as multi-currency accounts and loyalty programs
- Card Issuing to support physical and virtual usage
Armed with a single centralized tech stack, solutions architects are free to adopt a user-centric approach to their design efforts and place a rightful focus on experience above all else while simultaneously minimizing or eliminating the need to invest resources in backend infrastructure. With the overhead problem addressed, the next step is breaking down the barriers that hinder global expansion.
Managing the Complexity of Local Payments
Only 6% of the world’s population has a credit card. More than 2 billion consumers pay in other ways — with cash, using bank transfers, paying with an e-Wallet, or using a local debit network. The disparate world of local payments presents a major opportunity, but there are major challenges to supporting different payment methods at scale. That’s why we built Rapyd to resolve the complexities of managing local payments. We address all local regulatory and compliance issues, geographic expansion obstacles, global settlement and reconciliation, and vendor relationship management so that our customers don’t have to.
Global Network Reach
With a single consolidated toolset at their disposal and no remaining barriers to local payment accommodation, the next step is to figure out how to expand. That’s where one of Rapyd’s most valuable features comes in. We are building the world’s largest local payment network, a network of local networks, to facilitate and streamline global expansion for financial innovators. This interoperable collection of local payment networks reaches more than 2 billion people transacting with hundreds of local payment methods they use and depend on every day beyond traditional credit cards. This includes things like cash, bank transfers, e-wallets, and local debit schemes. Every node in the network is a point-of-access for any solutions built on top of the Rapyd platform, opening up a universe of possibilities for today’s financial innovators thanks to the unprecedented scaling potential we provide.
Combined, these three components allow businesses to focus unequivocally on delivering exceptional customer experience for localized and cross-border commerce.
This is our vision for the future of fintech. This is Fintech-as-a-Service, and these new partnerships have placed it well within our reach. We couldn’t be more excited to set out on this journey together, and we look forward to sharing more exciting news with you as we pursue a future in which financial innovation has been truly democratized.
If you would like to learn more about the Rapyd FinTech-as-a-Service platform and how it can help you scale commerce globally we would like to talk with you. Send us an email at email@example.com.
Arik Shtilman, CEO