Flipping the Script: How Smart Companies Turn Payouts Into Profits

With embedded banking plus issuing, companies can gain revenue from payouts, Ingo Payments SVP, Strategic Partnerships Jon Gaskell writes in a new PYMNTS eBook, “The Listening Economy: How Customer Conversations Are Transforming Financial Services.”

Let’s be real: Most FinTech conversations still circle around two basic topics: “How fast can I move money?” and “How do I lower costs?”

Both are important, of course, but the savvy clients — the ones who’ve seen it all — are now coming to us with a smarter question:

“How can my disbursements become a source of revenue?”

This is precisely the topic of conversations we’re having with our clients. And it’s the one that matters most.

As successful companies built over the last decade begin to truly scale, they’re quickly realizing that moving money faster is great — but it also means paying more in transaction fees. The more they grow, and the faster they go, the higher these costs climb. That’s when they start looking to flip the model. Instead of payouts simply being an expense, clients are asking us: “How can we actually make money off our payout volume?”

The answer is issuing.

With embedded banking plus issuing, companies can offer branded debit cards or deposit accounts to recipients, encouraging them to keep their payouts within an integrated ecosystem. Instead of pushing funds to external banks — and paying transaction fees — clients can generate interchange revenue whenever funds are spent from those branded accounts.

The payout becomes less of a cost center and more of a revenue generator.

Take any gig economy platform operating today where we’ve seen some of the first successful applications of embedded issuing. Without embedded issuing, every time one of these companies pays drivers, grocery shoppers, dog walkers, etc., it’s an expense. But by offering branded debit cards to their workers, they earn interchange each time someone spends from that card. Suddenly, what was only a cost becomes a revenue opportunity.

That’s exactly the type of conversation our clients and prospects are having with us today and what they’re hoping to implement.

At Ingo, we’re getting these queries constantly because companies understand that payouts can be much more than a cost center. Clients don’t want to become banks, deal with complex regulatory and compliance challenges or manage dozens of vendors. They want simple solutions that are fully integrated, reliable and proven to turn what was traditionally an expense into revenue.

If anything, some of the most productive conversations I’ve had in recent memory aren’t only about what our company can deliver via our products and our expertise, but about what barriers we can remove in the embedded banking experience. Compliance and risk? Done. Issuing and ledgering? Fully integrated. Turning costs into profits? That’s the core value Ingo provides.

In a crowded market, talk is cheap. Every FinTech claims to innovate, but when it comes to business, clients choose partners who are delivering revenue-driving solutions — especially ones proven and battle-tested by their partners like Ingo.

That’s why we’re seeing growing demand for embedded issuing. We predict it’s the future of both payouts and FinTech profitability.