To streamline FinTech, and to help consumers and businesses transact in the ways they desire, firms must move beyond the silo approach. FinTech still exists as a fragmented market, where businesses striving to offer payment services to end users pick and choose among providers, integrate with those providers, and must often navigate across complex technological and regulatory hurdles as they expand into new markets.
Might a single point of contact, through application programming interfaces (APIs), offer a simpler way to get it all done?
With that strategy in mind, Rapyd announced earlier this month that it raised $40 million in a financing round, led by General Catalyst and Stripe. Total funding raised for Rapyd now stands at about $60 million, according to reports.
In an interview with PYMNTS, Arik Shtilman, Rapyd’s CEO, stressed the company’s focus on the integration of far-flung financial services through APIs. Rapyd’s approach and goal is to become the Amazon Web Services of FinTech, the company has said. Against that backdrop, its process is one that forms a “network of networks,” serving 2.3 billion people across the globe who do not transact using traditional conduits of credit or debit cards.
The Silo Approach
“When people talk about building FinTech-related applications, these applications typically involve a lot of different capabilities,” Shtilman told PYMNTS, such as the collection and disbursement of payments, and the identity verification of consumers or businesses — just to name a couple. He also noted that, across FinTech today, “a siloed company exists for each of those services.”
That’s a lot of heavy technical lifting, he continued, as companies seeking to offer a range of financial services would have to undertake several integrations just to serve a given use case — and every integration may have to be done on a per-country, per-region basis to satisfy the regulations that may exist, and that may be on the horizon.
The process is a complicated one. Shtilman offered an analogy, via the evolution of cloud computing, of where FinTech is headed over the next few years.
Only a decade and a half ago, companies still had their own data centers. Now, cloud computing has made virtual clusters of computers and storage available to those same firms, and delivery of those services is concentrated among companies like Amazon, Google and Microsoft.
“Now,” said Shtilman, “nobody thinks about building this stuff out on their own. They go to these large platforms, and these platforms give you what you need, globally, in any data center — in Singapore, in Europe, in China. We believe that, five years down the road, this is what is going to happen in FinTech,” through a flexible and multi-faceted platform geared toward helping companies — small and large — offer services across geographies.
At present, with multi-currency support across 65 holding currencies and 170 payout currencies, Rapyd’s fund collection offerings include cards, cash (which the CEO noted is “still king” in many countries), bank transfers and local eWallets. Fund disbursements include push-to-card and local eWallet options.
Product development roadmaps, with the aforementioned funds from the funding round in hand, will include Transaction-Monitoring-as-a-Service, he said.
The Transition In Payments, Too
Shtilman told PYMNTS that a full-service FinTech model must address the changing needs and desires of the 2.3 billion individuals who have not embraced credit and debit cards, which are traditionally hallmarks of the way we pay and get paid in the Western world. However, the same cannot be said for, say, emerging markets.
Amid the most promising current and future verticals for Rapyd, and for the development of FinTech-as-a-Service, has been the gig economy, he said. Here, the FinTech-as-a-Service model verifies user identity, and pushes funds to users’ digital wallets using their preferred payment options.
Rapyd said the newly acquired funding will also be used to expand its offerings for local and cross-border payments.
“The world is shifting, dramatically, to real-time push payments,” Shtilman explained.
He added that, in many countries, eWallets are finding fast adoption, and offerings such as the Unified Payments Interface (UPI) in India are helping to redefine the way payments are done. The firm noted that 17 percent of eCommerce done outside the U.S. has taken place through eWallets, and UPI has seen growth rates in the hundreds of percentage points.
“At the end of the day, you have to serve the consumer in the way that they want to pay or get paid,” Shtilman said. “You cannot force credit or debit cards on them. They may not want to use them — they may have already skipped cards in the [technological] evolution, having gone directly into online bank payments, or eWallets, or other types of payments.”