March 8, 2022
Client management, operations, technology, treasury - is it possible that all the moving parts that make up your successful organization are being held back? And, even worse, that it’s going unnoticed and unquestioned? It’s time to lift the veil and see the spiderweb for what it is; a costly trap of operational, treasury, risk, and compliance headaches.
The term ‘spiderweb’ has been coined by the team here at Qolo as a metaphor for the complexities faced by fintechs today when it comes to managing their payments infrastructure. But, this is by no means a phenomenon experienced and witnessed by the Qolo team alone - far from it. The spiderweb problem is common to all fintechs who rely on payments, and has become so normalized that it’s simply accepted as the way it must be.
Here at Qolo, we are close enough to the industry to have experienced the problems fintechs face, yet far enough away to see a different path forward – a path where fintechs can finally demand more from payments partners.
That’s why we want to help companies see the spiderweb for what it really is.
So, what is it?
The spiderweb is the tangled mess of connections that fintechs create - out of necessity - to the various stakeholders required to make their payments infrastructure work. Each relationship with a payment provider or bank, for example, requires multiple connections to satisfy technical, regulatory, and operational compliance. And, aside from carrying risk, each of these connections requires budget in terms of both people and time. The financial burden also becomes hard to ignore when you consider the multiple reconciliations needed, which open up a business to human error risk, as well as the different minimum funding and reserve requirements that vary by payment type.
Why did this happen?
To put it simply, we are experiencing our industry’s growing pains – from the advent of new card types in the early 2000s to the genesis of the modern payments as we know them.
Before this point in time, payment options were much simpler and limited to credit and debit cards, Automated Clearing House (ACH), and wire transfers. Innovative companies then started to push the boundaries and explored different offerings.
During any period of intense innovation, we enter into uncharted territory – and, by definition, that means there is no clear path forward. As a consequence, payments players focused in on siloed offerings of newer, innovative payment types rather than understanding the client needs as a whole. This resulted in fragmented offerings and niche providers. This was manageable in the early days when offerings were limited and before fintech was even a word. But, fast forward to the multidimensional needs of modern payment innovators, and this ‘specialization’ approach becomes a detriment. Add in new payment types like push to card and real-time payments, and the complexities fintechs face when building out their payments ecosystems become a nightmare.
How to get untangled
The spiderweb is the quintessential use case for why Qolo was born. We experienced this in the early days of the fintech boom, and witnessed how innovators increasingly became trapped in the web of connections. We searched for answers, but found only excuses. There was no solution for modern fintech.
So, we built one.
Qolo offers a sophisticated solution to the spiderweb: a single, integrated payments platform that is a first-party provider of all major payments services.
Qolo’s unique capabilities include card issuing, card acquiring, next generation account structures, integrated reconciliation, unified risk and fraud management, and a multitude of payment types. Integration with our API-first, omnichannel platform allows our clients to focus on their business and leave the payments to us.
In practice, this means that fintechs can avoid the myriad of technical, reporting, and compliance issues that come with the spiderweb. For the bigger picture, the single connection solution means that fintechs can streamline their payments infrastructure as well as overall business operations. By eliminating multiple connections, fintechs eliminate the associated costs in regards to operations, people, compliance, and risk. Furthermore, development is streamlined and time to market is reduced.
Long gone are the days when the spiderweb can remain invisible and inevitable. If it is broke, fix it. We did, and we’re on a mission to get fintechs unstuck once and for all.
Qolo has the unique integration capabilities to help ambitious fintechs optimize their payments infrastructure.
Demand more. Set up a meeting with us.
Darren Beyer, is a founder and Chief Product and Strategy Officer at Qolo, the omnichannel payments platform for Fintech.