Why Bank Redundancy is Challenging but Essential to Payment Companies

Screen Shot 2013-07-23 at 11.12.39 AMBanks provide underlying infrastructure to payment companies including trust accounts, prepaid services, bank transfers, card acquiring, connections to networks. Although essential relationships, they can also be challenging to develop.


One reason it is challenging to establish these relationships is that banks need to be cautious regarding their customers and they also need to be sure the customer’s requirements are a good fit for the banks service offerings.  Many times payment innovators struggle to establish one sponsoring bank – so getting more than  one is even tougher. But this redundancy is essential.


I learned this the hard way as many in the industry have. Unfortunately at the beginning of the prepaid card industry (2006),  banks were jumping in. They frequently found once they started that the business was tough. At the time, my company was offering a mobile wallet with two types of account – mobile prepaid without a card, and mobile prepaid with a companion card. Great offering. The bank relationship started out fine – but ended suddenly when the bank made a quick decision to exit prepaid.

We were devastated. We had other bank relationships but none willing to support prepaid. As we dealt with the implications of this decision I vowed to never have a single source for any banking feature. Hard to implement, but easier than unwinding a live service while we brought up an alternative source.




About Carol Realini

Serial Entrepreneur, Mobile Payments and Banking Pioneer, Author, Board Member Carol Realini is a successful Silicon Valley executive and expert in financial service innovation. She has worked with leading financial institutions including MasterCard and Citi, as well as numerous multinational and regional banks, to change the way banking is conducted. In 2011, as a Technology Pioneer attending the World Economic Forum, she led discussions on alternative banking at their meeting in Davos. A serial entrepreneur, she has been recognized as one of the 50 Top Women in Technology by Corporate Board Member magazine. Carol is a huge believer in the potential of mobile banking and payments to create financial inclusion - where everyone with a mobile phone has access to affordable financial services that empower their life and work. To understand Carol's vision please watch the WEF video (click on the weforum.org link below). Carol also mentors entrepreneurs providing wisdom and lessons learned from her four successful startup experiences.
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