Banyan CEO Takes Long-Term View of FinTech Infrastructure

The evolving world of payments is being built on top of innovative strategies. 

And, after years of traditional ways of transacting like paper checks and ACH payments, change is happening all at once — and it requires a brand-new foundational infrastructure layer. 

“We’re building a platform that is infrastructure in nature … We want large partners to leverage our platform, our infrastructure, and build interesting use cases on top of it,” Jehan Luth, founder and CEO of Banyan, told PYMNTS CEO Karen Webster. 

He highlighted how Banyan’s platform, which offers item-level receipt data solutions for banks, FinTechs and merchants, simplifies complex technology and regulatory issues, making it attractive to all three.

Banyan has spent the past two years navigating risk, compliance and procurement processes with these partners, and now they are ready for the new normal, Luth said. 

Traditional payments take a lot of people, a lot of processes and a lot of labor. All of which carries a cost for businesses, many of whom are looking for a better solution — one that itself begets other, better solutions. 

“If I think about true infrastructure FinTech, it tends to be really, really sticky. The lifetime value can be measured in decades, not years,” Luth said. 

Infrastructure FinTech also necessitates the delicate balance of managing the pace of large players while ensuring profitability and positive unit economics. 

Building Infrastructure: The Foundation of B2B FinTech

Banyan has adopted a partner-led distribution model, working with partners that have high volume and throughput to embed the platform in their growth markets. This approach allows Banyan to scale quickly once the deals are in place and the incentives are aligned. However, Luth also highlighted the importance of education and, at times, reeducation around explaining the value proposition to potential partners and customers.

That’s because large players have a lot of compliance and regulatory considerations, as well as legal reviews, all of which must have their T’s crossed and I’s dotted before any contract is signed. Balancing all of the potential with the realities of navigating the inertia inherent to a third-party environment can be a challenge — but the light at the end of the tunnel is an attractive one.

“From a revenue and scale standpoint, it’s like switching a light switch on. It is instantly a step function change in the business — but it takes time to get these deals in place, and get the incentives aligned for all parties,” Luth said. 

The importance of platforms in the FinTech industry, he noted, can’t be overstated. Luth described platforms, like Banyan’s, as enabling critical infrastructures that provide flexibility for stakeholders to create innovative use cases that drive their business.

He contrasted this with FinTech that is easy to swap, highlighting the challenges in a competitive market where price competition can erode unit economics and gross margins.

The Evolving Nature of Data-Rich Transactions

“Embracing evolution is just as important as having an original conviction” when it comes to driving success — and innovation — across the market, Luth said. “A really good platform will evolve over time to what the customers are asking for.”

Network dynamics also play a pivotal role, Luth said, adding that Banyan’s inclusion in the 2024 FinTech Innovation 50 (an annual list highlighting the most innovative emerging and established FinTech companies) was a nice piece of external validation. 

As Banyan moves ahead in 2024, Luth pointed to the importance of focus and learning to say no. The challenge lies in balancing opportunities, staying true to the core platform, and avoiding unnecessary distractions. 

Focusing on a few really good customers rather than 10 mediocre customers is always worth it, Luth said, noting that while building any platform or network is hard, creating the plumbing for a new way of doing business is rewarding. 

Banyan’s journey reflects the challenges and triumphs of building infrastructure in the FinTech landscape. And as the industry continues to evolve, an ongoing focus on partner-led growth and maintaining a commitment to core values will be crucial for success in payments innovation.