Author: Julie Muhn (@julieschicktanz)

Stripe Lands $6.5 Billion in Funding at $50 Billion Valuation

Stripe Lands $6.5 Billion in Funding at $50 Billion Valuation
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding
  • Stripe received $6.5 billion in Series I funding, along with an updated valuation of $50 billion.
  • The $50 billion valuation is almost half of the company’s peak valuation of $95 billion received in 2021.
  • Today’s investment will not be used to fuel company growth, but will instead be used to provide liquidity to employees and address employee equity awards withholding tax obligations.

Stripe announced a $6.5 billion Series I funding round today. Alongside the financing round, the payments processing company also unveiled an updated valuation.

The investment comes from existing Stripe shareholders– including Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital. New investors GIC, Goldman Sachs Asset and Wealth Management, and Temasek also contributed to the round, which boosts Stripe’s total funding to $8.7 billion.

Stripe also unveiled that it is now valued at $50 billion. This number is notably lower than the company’s peak. Stripe’s valuation rose to $95 billion in March of 2021, making it the most valuable U.S. startup. In July of 2022, the company’s valuation began tipping downward to $74 billion, and earlier this year, TechCrunch reported that Stripe was valued at $63 billion.

Unlike most venture funding rounds, however, today’s investment will not be used to fuel company growth. Instead, as Stripe notes in its announcement, “The funds raised will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards.” This liquidity will offset the issuance of today’s round’s new shares, and therefore will not result in a reduction of the percentage of ownership that current investors hold in the company.

Founded in 2010, Stripe processes hundreds of billions of dollars each year and offers a range of products– including a suite of global payments solutions, banking-as-a-service offerings, and revenue and financial management tools.

Photo by Jonathan Borba

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GPT-4 Has Arrived. Here Are 6 Things You Should Know about the New Iteration.

GPT-4 Has Arrived. Here Are 6 Things You Should Know about the New Iteration.
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

If you need a break from bank failure news, here’s something refreshing. OpenAI’s GPT-4 was released yesterday. The new model is the successor to GPT-3.5-turbo and promises to produce “safer” and “more useful” responses. But what does that mean exactly? And how do the two models compare?

We’ve broken down six things to know about GPT-4.

Processes both image and text input

GPT-4 accepts images as inputs and can analyze the contents of an image alongside text. As an example, users can upload a picture of a group of ingredients and ask the model what recipe they can make using the ingredients in the picture. Additionally, visually impaired users can screenshot a cluttered website and ask GPT-4 to decipher and summarize the text. Unlike DALL-E 2, however GPT-4 cannot generate images.

For banks and fintechs, GPT-4’s image processing could prove useful for helping customers who get stuck during the onboarding process. The bot could help decipher screenshots of the user experience and provide a walk-through for confused customers.

Less likely to respond to inappropriate requests

According to OpenAI, GPT-4 is 82% less likely than GPT-3.5 to respond to disallowed content. It is also 40% more likely to produce factual responses than GPT-3.5.

For the financial services industry, it means using GPT-4 to power a chatbot is less risky than before. The new model is less susceptible to ethical and security risks.

Handles around 25,000 words per query

OpenAI doesn’t measure its inputs and outputs in word count or character count. Rather, it measures text based on units called tokens. While the word-to-token ratio is not straightforward, OpenAI estimates that GPT-4 can handle around 25,000 words per query, compared to GPT-3.5-turbo’s capacity of 3,000 words per query.

This increase enables users to carry on extended conversations, create long form content, search text, and analyze documents. For banks and fintechs, the increased character limit could prove useful when searching and analyzing documents for underwriting purposes. It could also be used to flag compliance errors and fraud.

Performs higher on academic tests

While ChatGPT scored in the 10th percentile on the Uniform BAR Exam, GPT-4 scored in the 90th percentile. Additionally, GPT-4 did well on other standardized tests, including the LSAT, GRE, and some of the AP tests.

While this specific capability won’t come in handy for banks, it signifies something important. It highlights the AI’s ability to retain and reproduce structured knowledge.

Already in-use

While GPT-4 was just released yesterday, it is already being employed by a handful of organizations. Be My Eyes, a technology platform that helps users who are blind or have low vision, is using the new model to analyze images.

The model is also being used in the financial services sector. Stripe is currently using GPT-4 to streamline its user experience and combat fraud. And J.P. Morgan is leveraging GPT-4 to organize its knowledge base. “You essentially have the knowledge of the most knowledgeable person in Wealth Management—instantly. We believe that is a transformative capability for our company,” said Morgan Stanley Wealth Management Head of Analytics, Data & Innovation Jeff McMillan.

Still messes up

One very human-like aspect of OpenAI’s GPT-4 is that it makes mistakes. In fact, OpenAI’s technical report about GPT-4 says that the model is sometimes “confidently wrong in its predictions.”

The New York Times provides a good example of this in its recent piece, 10 Ways GPT-4 Is Impressive but Still Flawed. The article describes a user who asked GPT-4 to help him learn the basics of the Spanish language. In its response, GPT-4 offered a handful of inaccuracies, including telling the user that “gracias” was pronounced like “grassy ass.”

Photo by BoliviaInteligente on Unsplash

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Tilia, a Payments Platform for Digital Economies, Raises $22 Million

Tilia, a Payments Platform for Digital Economies, Raises $22 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding
  • Payments platform for digital worlds, Tilia, has raised $22 million.
  • The funds come from South Korea-based Dunamu and J.P. Morgan Payments.
  • Tilia offers a compliant way for digital content creators to receive micropayments and mints fiat-pegged currency that can be used in virtual economies.

Tilia, a digital payments platform for games and virtual worlds, announced this week it received $22 million in funding.

Today’s funds come from South Korea-based Dunamu. Combined with the funds that existing investor J.P. Morgan Payments invested in Tilia in October of 2022, the venture round boosts the company’s total raised to $22 million. Tilia will use today’s round to scale its platform and address the demand for payments in digital economies.

Originally founded in 2019, Tilia was spun out of Second Life creator Linden Lab in 2022. The California-based company’s payments platform is the backbone for online economies such as those found in online games, creator platforms, social commerce, and other digital worlds. Tilia enables creators to receive direct payouts by processing user-generated content transactions and microtransactions, allowing them to monetize their operations. For games and virtual worlds, the company mints branded tokens that are compliant in the U.S. and have a fixed conversion rate to fiat currency.

Along with today’s news, Tilia also announced two new appointments. The company brought on Brad Oberwager as CEO and Catherine Porter as Chief Business Officer. Oberwager has served as Executive Chair at Tilia for the past two years.

“Today’s payments infrastructure was built for traditional commerce – it hasn’t caught up with the new way of living and working in a digital, creator-driven economy,” said Oberwager. “At Tilia, we have a massive opportunity to unlock new revenue streams for both online creators and the platforms they build in, whether they are gaming worlds, social platforms, or next generation marketplaces. As I take the helm at Tilia, my focus will be on providing a payments system that enables these expanding digital economies.”

Photo by RODNAE Productions

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Sezzle Revisits Plan to Publicly List in the U.S.

Sezzle Revisits Plan to Publicly List in the U.S.
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Sezzle
  • Sezzle announced plans to publicly list on the Nasdaq by the end of September.
  • The company will continue to sell common stock on the Australian Stock Exchange.
  • The news comes two years after Sezzle’s original announcement of plans to publicly list in the U.S.

Buy now, pay later (BNPL) technology provider Sezzle announced on Monday it plans to list publicly in the U.S. on the Nasdaq, while continuing to sell common stock on the Australian Stock Exchange (ASX).

The Minneapolis, Minnesota-based company originally listed on the ASX in 2019 using Chess Depositary Interests (CDIs), which are traded on the ASX to allow non-Australian companies to list their shares on the exchange. Prior to listing on the Nasdaq, Sezzle plans to remove the Foreign Ownership Restricted on United States Person Prohibited tag from the CDIs to allow participation from U.S. investors.

“A listing on the Nasdaq is a natural evolution for Sezzle given the company is already filing the necessary reports with the SEC,” said Sezzle Chairman and CEO Charlie Youakim. “Although we are not seeking to raise capital as part of the Nasdaq listing, we are excited to expand the universe of potential investors to the United States.”

Sezzle plans to list in the U.S. no later than the end of September 2023.

Avid fintech nerds may have a sense of déjà vu reading Sezzle’s headline today. In fact, it echoes a news post we published in 2021: Sezzle Plans to File for U.S. IPO. According to that release, “Plans for the public listing are still in early stages. Details, such as the timing, price, and use, have not been revealed.” Sezzle’s release today revisits the plan for a U.S. IPO, but with more concrete details.

Sezzle was founded in 2016 and the company’s growth ballooned alongside the increasing interest in BNPL in 2020. In turning its focus from growth to profitability, Sezzle has made significant cost-saving efforts, including exiting a handful of foreign markets and cutting 20% of its North American workforce. Last February, we reported that fellow BNPL player Zip planned to acquire Sezzle. The deal was terminated in July in light of macroeconomic and market conditions.

Photo by cottonbro studio

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4 Potential Impacts the SVB Fallout May Have on Banks

4 Potential Impacts the SVB Fallout May Have on Banks
By Julie Muhn (@julieschicktanz) Posted on
Categories: Thought Leadership

The fintech industry experienced quite a dramatic weekend of fast-breaking news regarding the collapse of Silicon Valley Bank (SVB). By now, you’ve likely heard that the Biden administration stepped in this morning to facilitate a move that will offer SVB’s 40,000 customers full access to all of their deposits.

Banks, startups, and even tangentially related businesses are breathing a collective sigh of relief this morning. However, the move does not bring the industry back to business-as-usual. Below are four potential implications of SVB’s misstep.

FDIC Deposit Insurance to Increase

Regulators are not calling today’s move a “bailout” because the funds being used to make SVB customers whole did not come from consumer taxpayer dollars. “All depositors of the institution will be made whole,” the FDIC said in a statement. “Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.” This means that banks* will bear the responsibility to recoup these funds via increased FDIC insurance rates.

More (closer to) full reserve banks

We likely won’t see banks convert to full, 100% reserve banks (that is, banks that keep all customer reserves in cash). It is possible, however, that SVB’s failure may motivate banks to keep more consumer cash on-hand, operating closer to a full reserve bank than they previously were in order to mitigate risk. If this is the case, banks would have less funds to lend, making it difficult for consumers and businesses to get loans.

Increased opportunities

One of the first lessons taught in business school is that where there are challenges, there are opportunities. This is certainly the case here. HSBC picked up SVB’s U.K. unit for £1, and everyone from Elon Musk to JP Morgan and PNC are considering purchasing SVB’s U.S. arm. Additionally, businesses have cropped up marketing to former SVB clients, offering them working capital loans. Even Mr. Wonderful is in on the action.

Uncertainty reigns supreme

If you’ve read about SVB in the news today, it’s likely you also read about Signature Bank, which was shut down by New York state regulators on March 12, and Silvergate, which closed its doors on March 8. Combined, these events mark three U.S. bank failures in a single week. Though regulators have been quick to step in, the events have shaken investors and consumers alike.

*Interestingly enough, banks are indeed taxpayers– meaning that the responsibility for repayment technically does fall on taxpayers.

Photo by Tara Winstead

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APEXX Global Raises $25 Million to Expand into North America

APEXX Global Raises $25 Million to Expand into North America
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • APEXX Global has raised $25 million in a Series B round.
  • The funds come from existing investors Forward Partners, Alliance, and MMC Ventures.
  • APEXX Global will use the new investment to expand further into North America and to boost product development.

Global payment solutions company APEXX Global has raised $25 million in Series B funding. The investment, which comes from Forward Partners, Alliance, and MMC Ventures, brings APEXX’s total amount raised to $37.1 million.

“I’m delighted to announce that we have successfully closed our Series B funding round,” said APEXX Global Co-founder and CEO Peter Keenan. “Since day one we’ve been laser-focused on our mission to build the world’s leading payment orchestration platform and deliver clear benefits to merchants. We‘ve seen strong growth across international markets, delivering significant cost savings and transaction conversion benefits. We look forward to using these funds to further consolidate our position in driving the future of global payments.”

APEXX Global, which currently holds offices in New York, London, and India, plans to use the funds to expand further into North America via its New York office. The company will also leverage the investment to boost product development.

APEXX offers a payment orchestration layer to help merchants optimize their payment stack. The company’s payment gateway enhances the global payment processing experience by processing payments locally to help circumvent foreign exchange fees on cross-border transactions.

In addition to traditional payment methods, APEXX enables businesses to offer alternative payment methods to their end customers. The company currently partners with more than 120 alternative payment methods, including Apple Pay, Klarna, Alipay, and PayPal. Allowing users to pay using their preferred method not only enhances the user experience, but it also has the potential to increase sales.

“We’ve seen good momentum in terms of customer growth, and we are delighted to continue to back Peter and his talented team as they work with merchants to rethink payments and save money,” said MMC Ventures Chairman and Co-founder Alan Morgan. With today’s agreement, Morgan will also take a seat on APEXX’s board of directors.

Photo by Monstera

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Paysera Taps Ria’s Physical Money Transfer Locations

Paysera Taps Ria’s Physical Money Transfer Locations
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Paysera is partnering with Ria to add cash-pickup capabilities to its suite of financial services offerings.
  • Paysera clients can select from Ria’s network of 522,000 cash pickup locations in 152 countries.
  • The new service is currently available to Paysera clients using electronic banking and will be made available on the mobile app in the first half of this year.

E-money app Paysera is adding a cash-pickup service to its suite of financial services offerings. The new capability is made possible thanks to a partnership with international money transfer company Ria.

Owned by Euronet Worldwide, Ria enables clients to send money to a physical Ria cash pickup location instead of a bank. Customers can choose from Ria’s network of 522,000 cash pickup locations in 152 countries. Under today’s partnership, Paysera clients can now tap into this network when sending and receiving funds.

“Sometimes it’s not possible to transfer money to a bank account because the recipient doesn’t have a local bank account,” said Paysera CEO Gintautas Mezetis. “Even if the recipient has an account, it may not be linked to a debit card, the card may have been lost, or there may be no ATMs around to withdraw the money. An international transfer from Europe to Asia is sometimes more expensive than an alternative cash pickup transfer. Therefore, there are many situations where cash pickup transfers are useful and necessary.”

Paysera anticipates the new cash pickup offering will benefit migrants working in developed countries in Europe. Specifically, Paysera is seeking to help Ukrainian citizens temporarily living in European countries due to the war who need to transfer money back home.

The new Ria cash pickup service is currently available to Paysera customers using electronic banking. The company plans to make cash pickup available on the mobile app in the first half of 2023.

Paysera offers an online merchant payment gateway, money transfers, currency conversions, payment cards with a tandem financial management app, event ticketing, and a parcel locker network. The Lithuania-based company has had more than one million app downloads since it was founded in 2004.

As a legacy player in the money transfer space, Norway-based Ria also offers bill payment, mobile top-ups, prepaid debit cards, check cashing, and money orders. The company is partnered with many major retailers to serve as cash pick-up locations, including Walmart, 7-Eleven, Privatbank, and Post Finance.

Photo by Pixabay

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Jonathan Alloy on the State of Digital Banking

Jonathan Alloy on the State of Digital Banking
By Julie Muhn (@julieschicktanz) Posted on
Categories: Speaker series

Jonathan Alloy is a seasoned financial services professional with years of experience in the sector. He formerly served as Vice President of Design Thinking at Credit Suisse, where he was responsible for driving innovation and fostering a culture of human-centered design across the organization. Today, he is Vice President for Customer Experience and Innovation Consulting at Publicis Sapient.

Last fall, Jonathan Alloy and Steven Ramirez, CEO of Beyond the Arc, sat down to discuss the current state of digital banking. Here are some highlights from their conversation.

When it comes to partnerships, how does a fintech work with a bank to get a solution in front of customers?

Jonathan Alloy: Fintechs, or any new entrant into the banking industry, really need to understand that banks have two separate departments at the highest level. There’s a group that likes risk– that’s the front office, the people who take deposits, make loans, and trade securities– they thrive on correctly evaluating risk.

The back office, by contrast, thrives on minimizing risk. They’re looking for reasons to say no to protect the bank’s integrity, its reputation, its cybersecurity, and its trust with customers. They’re going to say no to things, even if they’re innovative, because it violates a policy that they’re incentivized by the bank to uphold. Maybe [the solution being offered] is only available in the cloud and the bank only allows things that are on-prem. That’s a very common example. So when you’re developing a solution, you have to understand the risk profile of who in the bank has the authority to say yes.

What is it about digital banking that excites you?

Alloy: I think the biggest opportunity right now in some ways remains where it was 20 years ago. [This opportunity] is increasingly being where the customer is. This enables us to deliver financial services when, where, and how they want to consume, not just how we want to provide it. And that’s an important distinction.

Whether [you deliver] through mobile payments, through white labeling, whatever the case may be– it’s a matter of getting out in front of the traditional banking silos, breaking down the walls we have internally, and getting it out in the world to understand it from [the customer’s] point of view.

When we look at the world through the eyes of how customers want to make purchases, payments, take out loans, and invest for retirement, we’re going to learn things that we don’t get if we stay in our silos.

Any tips for banks that want to think like a customer?

Alloy: The number one best thing I could encourage everybody to do is go shopping yourself. So you’re CEOs, your CXOs, your executive team, your management team, your middle managers, your front line employees– everybody should be required to go out, and from another bank that’s not you, as well as you, sign up for a new checking account, get a debit card and a credit card, take out a loan, buy a car– whatever your personal financial needs are. Think about, “was this experience enjoyable or tolerable?” In most cases, what we find, is that for most people, banking is barely tolerable. So when somebody comes along with an innovative new idea or a new approach that makes it just that much more better, they’re going to win great[er] share.

Hear more from Jonathan Alloy in the full conversation.

Photo by Andrew Neel

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Intuit Pulls from Mint to Build New Credit Karma Net Worth Tool

Intuit Pulls from Mint to Build New Credit Karma Net Worth Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Credit Karma, Daily news, Mint
  • Credit Karma is launching Net Worth, a new tool that will enable users to view and track their net worth in a single place.
  • Intuit’s Mint business has joined the Credit Karma team to facilitate the new Net Worth tool.
  • At launch, the Net Worth tool will be available to U.S. consumers with credit scores above 720.

Intuit-owned Credit Karma is expanding from credit building into wealth building this week with its new launch, Net Worth. The new tool aims to help the company’s 120 million U.S. members track their net worth, and places Credit Karma one step closer toward its goal of becoming a full service personal financial management platform.

Intuit subsidiary Mint is key to today’s launch and has joined the Credit Karma team to implement the new offering. Mint launched in 2007 to help users keep track of all of their accounts in a single place. The company was one of the first to offer account aggregation in a direct-to-consumer offering.

“Credit Karma’s mission is to champion financial progress for all, but we know that financial progress looks different for everyone,” said Credit Karma CEO and Founder Kenneth Lin. “This next evolution of Credit Karma will combine the expertise and momentum generated by Mint with Credit Karma’s scale and technology, and enable us to help more Americans, in particular those who are faced with a new set of financial challenges and are looking to elevate and protect their net worth.”

At launch, Net Worth will be quite simple. The tool will help members understand the components of their net worth, monitor changes, and track their transactions over time. Future iterations will enable users to protect their net worth, maximize credit card rewards based on spending habits, and view investment insights. Interestingly, each of these secondary iterations comes with potential revenue streams, such as selling insurance, credit card promotional partnerships, etc.

Credit Karma is making Net Worth available to U.S. consumers with credit scores above 720 and hopes to expand the tool to more users over time. “Net Worth was built for U.S. consumers who have already made significant progress on their credit score and are looking for that next financial health indicator to track and take action on, as they continue their financial journey,” said Mint General Manager Ryan Steckler. “Before we can help consumers grow their net worth, we’ve built a seamless product experience that gives consumers a holistic view of all of their financial accounts, directly within the Credit Karma app.”

Photo by Karolina Grabowska

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Coinbase Launches Wallet-as-a-Service

Coinbase Launches Wallet-as-a-Service
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Coinbase, Daily news
  • Coinbase is launching a Wallet-as-a-Service (WaaS).
  • The offering will enable businesses to build web3 wallets for their customers, using only web2 skills.
  • Initial customers for the launch include NFT marketplace Floor, gaming platform Moonray, and token-gated events site Tokenproof.

Digital currency platform Coinbase launched a Wallet-as-a-Service (WaaS) this week. The new offering is aimed to help any company build customizable wallets for their clients, bringing them into the web3 era.

The launch comes after Coinbase realized that web3 wallets were out of reach for many businesses. These on-chain wallets– which help users store digital assets, facilitate transactions, and act as a digital identity– are complex and require technical knowledge. Coinbase’s WaaS aims to simplify things by enabling companies to offer a digital wallet onboarding experience that requires only a username and password. Coinbase will also enable companies to offer the wallet within their own app, enabling in-app transfers of currency or digital assets all in one place.

The WaaS tool enables users to access a web3 wallet using a web2 interface. Also making things easier for those new to web3 is the security. With WaaS, users are not required to manage their own keys. Instead, Coinbase uses advanced multi-party computation to securely divide, encrypt, and distribute keys among multiple parties.

Coinbase has already secured a handful of clients for its WaaS, including NFT marketplace Floor, gaming platform Moonray, and token-gated events site Tokenproof. “Individuals will no longer have to come with knowledge of how the blockchain works in order to interact with the brands they love,” said Tokenproof Founder Fonz. “When users download the tokenproof app, we’ll help welcome them into web3 by creating their first wallet, which will be powered by Coinbase.”

With 1,110 verified users on its platform, Coinbase sees $145 billion in quarterly volume traded and has $80 billion in assets on its platform. The company went public in 2021 and now trades on the NASDAQ under the ticker COIN with a current market capitalization of $14 billion. Earlier this month, Coinbase acquired digital asset management company One River Digital Asset Management in an effort to bridge the gap between financial institutions and the crypto economy.

Photo by Lukas

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Ramp Lands $5 Million to Automate Revenue Forecasting

Ramp Lands $5 Million to Automate Revenue Forecasting
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding
  • U.K.-based Ramp raised $5 million in Seed funding for its business forecasting tools.
  • This marks the company’s first round of funding.
  • The round was led by AlbionVC and Eurazeo with participation from Triple Point Ventures and a group of Angel Investors.

Business forecasting company Ramp (not to be confused with business finance automation startup Ramp) raised $5 million in Seed funding this week. The round was led by AlbionVC and Eurazeo with participation from Triple Point Ventures and a handful of Angel Investors.

Ramp, which plans to use the funds to streamline and scale client onboarding, offers businesses forecasting tools to help finance teams enhance revenue predictions. The company aims to replace the Excel spreadsheets many businesses use for revenue forecasting with a more sophisticated tool. Ramp’s technology enables businesses to run scenarios and forecast in a matter of minutes and predict customer behavior, future revenue, and annual growth.

“Our platform dramatically increases the accuracy of revenue forecasting in a fraction of time it would take in spreadsheets,” said Ramp Chief Strategy Officer and co-founder Angus Lovitt. “What took us all a day in terms of number crunching we can now do in minutes. Yet what really excites me about the platform are the strategic decisions we empower businesses to make.”

Lovitt brings his experience from the computer gaming world to Ramp. He helped scale the popular Candy Crush game during his tenure at King Digital Entertainment. Lovitt also carries over his connections to the gaming community. He has brought on a handful of gaming clients– including Space Ape Games, FRVR, Pixel United, and Netspeak Games– to Ramp.

U.K.-based Ramp was founded in 2018 and specializes in cohort-based forecasting. With an ambition to become a tech unicorn, today was Ramp’s first round of funding. “Our long term goal is to position Ramp as a single source of truth for the future of businesses, from which prescriptive and proactive analytics services can stem,” said company CEO Dan Marcus. “We’re at the forefront of this new product category and it’s great to have such renowned investors believe in this vision and join us on this journey.” Marcus described the VC funding process in a recent blog post.

Photo by Sujira Su

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Modern Treasury Unveils Global ACH Payment Tool

Modern Treasury Unveils Global ACH Payment Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Modern Payments and Silicon Valley Bank partnered to launch a cross-border money movement tool called Global ACH.
  • Global ACH leverages local payment rails to enable mutual clients to send cross-border payments.
  • Global ACH differs from SWIFT in that it is less expensive and works better for fast, one-off transactions.

Payment operations platform Modern Treasury has teamed up with Silicon Valley Bank to create a new cross-border payments solution. Global ACH, the new tool, will allow mutual clients to send cross-border payments via local payment rails.

The goal of Global ACH is to provide users an option other than the SWIFT network to send payments internationally. Global ACH enables customers to automate international payments using the local payment rails– equivalent to ACH and RTP– in each country. Leveraging local rails promotes efficiency and helps to lower the costs associated with cross-border payments.

“Payments are in the midst of a massive transformation, and it’s critical that we support our customers with an international footprint in the same way we support them domestically,” said Modern Treasury CEO and Co-founder Dimitri Dadiomov. “Global ACH means providing customers with more choice, greater efficiency, and lower costs. We’re happy to work with Silicon Valley Bank to bring this capability to our mutual clients to help them scale.”

Potential use cases for Global ACH include:

  • Marketplaces that pay out users and suppliers in international markets
  • Shipping and logistics firms that disburse funds to vendors and suppliers abroad
  • Financial services such as payroll and lenders sending funds to international recipients
  • Companies that need to pay large numbers of international suppliers and contractors
  • Software providers offering accounts payable services for clients paying out globally or facilitating remittances

Today’s partnership builds on an existing relationship between Modern Treasury and Silicon Valley Bank. The two currently offer international payment capabilities using the SWIFT network. SWIFT differs from Global ACH in that it works well for fast, one-off international payments. SWIFT is also more expensive than Global ACH. This is why the two anticipate Global ACH to be more popular for companies with recurring international payments and smaller value payouts.

“We are always looking to enhance the payments experience for our fast-growing and innovative clients, many of whom have, or plan to have, an international presence,” said Silicon Valley Bank Head of Payments Kathleen Pierce-Gilmore. “By bringing together the power of SVB’s Global ACH capabilities and the strength of Modern Treasury’s platform, we will enable more of our mutual clients to move money faster, with real-time data visibility and more efficient workflows.”

Founded in 2018, Modern Payments offers APIs to automate money movement while providing control over fund flows with approval workflows, notifications, reporting, and more. The company has raised $183 million and is headquartered in California.

Photo by Pixabay

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