By: Manuel Steremberg

Payment processing integrated with Banking as a Service allow for cutting edge last mile financial solutions.

In 2020, Angela Strange of Andreessen Horowitz boldly declared, ‘Every Company Will Be a Fintech Company.’ Fast forward to 2024, and her prediction has become a reality. The landscape of business has undergone a transformative shift, driven by the rise of Open Finance, instant payments like PIX, Tokenization, and the ‘As a Service’ business model. This transformation has given rise to a multitude of companies and services capable of empowering regular businesses to adopt banking-like functionalities and address the evolving needs of the last mile.

Digital wallets have become ubiquitous, with tech giants like Apple, Google, and Samsung joining traditional players like PayPal, Zelle, and Venmo in the space. E-commerce platforms such as Amazon, Shopify, Walmart, and AliExpress have embraced digital payments, subscription billing, and installment financing, offering services like Amazon Pay, Shop Pay, Walmart Pay, and Alipay, along with payment facilitators like Klarna and Afterpay.

In the gig economy, platforms catering to industries ranging from ridesharing and food delivery to freelance work and short-term accommodation have flourished. These platforms provide tools for instant payouts, earnings tracking, and financial management, empowering workers in diverse sectors such as pet care services, landscaping, merchandising, and wellness.

The pace of change is accelerating to the point that some industry experts predict that digital wallets will surpass debit cards in US stores, according to Payment Dive (3/24/24). Reuters also reported (4/2/24), that Pix has exceeded the combined volumes of credit and debit cards, signaling a significant shift in customer payment preferences.

However, the logistics of transferring funds from payment methods to accounts or wallets require adherence to regulations and industry standards. While costly, the barriers to entry and differentiation in this space remain relatively low.

For business owners, the question arises: Which areas should remain core competencies, and which ones can be outsourced as a service? In today’s competitive landscape, possessing profound industry expertise and understanding consumers is paramount. However, the software services needed to achieve this are vast and constantly evolving.

Enter Payments Service Providers (PSPs) and Integrated Payment Providers (IPPs). While PSPs facilitate electronic payment transactions, IPPs offer advanced capabilities to seamlessly integrate payment processing with various business processes. IPPs extract data from disparate sources, mitigate manual errors, ensure compliance, reconcile payments with invoices, streamline operations, and offer value-added services.

IPPs typically offer white label solutions, including customizable digital wallets and payment platforms, along with a range of other services tailored to enhance payment offerings.

FitConnect, the latest evolution of Fitbank, exemplifies the capabilities of an Integrated Payment Provider (IPP). By leveraging FitBank’s robust multi-rail payment platform, FitConnect delivers cutting-edge solutions that go beyond payment processing. With Banking as a Service, partners can comprehensively manage the last mile experience for end users. FitConnect offers a suite of 40 services, allowing for over 1,500 different combinations to meet the needs of clients across various industries. From credit services to digital bank accounts, customer onboarding, real-time KYC processes, digital wallets, and access to over 12,000 billers, FitConnect empowers businesses and individuals alike with a powerful and customizable solution suite.

In an era where businesses are rapidly embracing fintech innovations, the ability to address the last mile needs of customers has become a crucial competitive advantage. FitConnect, as an example of an IPP, demonstrates how the integration of payment processing and Banking as a Service can empower businesses to thrive in this ever-evolving financial landscape. By offering a comprehensive suite of solutions tailored to diverse industries and individual needs, IPPs like FitConnect are at the forefront of driving innovation and shaping the future of finance.