The New Payments Era
I’m excited to have joined the March Capital team this past fall ahead of our $450M final close of March Capital III. I spend most of my time helping build out our views around fintech and the emerging areas we want to invest in, current portfolio companies include Earnin, BillDesk, and Forter.
With all that’s going on in the market, it’s a thrilling time to be a fintech investor, and we’re excited to showcase a few themes we’re tracking at The Montgomery Summit presented by March Capital, on March 3rd and 4th, via our FinTech Tracks: The New Payments Area, Reinvention of the Bank and The Next-Generation CFO Stack.
Starting with the New Payments Era [more to come on the other two], we’ll be joined by Hans Morris, Managing Partner at Nyca Partners (who formerly was the President of Visa and CFO of Citi), in examining the rapidly evolving payment infrastructure landscape. Accompanying him are Finix, Fidel, and Finlync, all companies helping rewrite payment infrastructure.
In the past 45 years, payment rails in the US have largely gone unchanged; the ACH network and paper checks respectively still account for 66% and 26% of the $100 trillion in annual payment. When we compare this with disrupted industries such as media (where streaming services and user created content have taken over) or IT infrastructure (where we’ve seen the rapid adoption of cloud compute and storage), we see how 90% of financial services operates on legacy infrastructure.
Over the past 18 months, we’ve seen a massive wave of early stage fintech companies that are making payments faster and more secure. Companies such as Sila are helping fintech companies create better user experiences by offering a complete API solution that offers instant payments, KYC/AML and advance integrations all in one platform. Nivelo makes payments more secure by helping businesses verify that senders have the money they claim to have and that receivers are who they claim to be, while Orum provides a platform for frictionless money movement by leveraging a predictive funds solution.
In addition to getting payments processed quickly and correctly, companies also want to use payments data to make more informed decisions. Fidel leverages granular real-time transaction data from major card networks to help companies understand customer behavior and to build more personalized experiences, while Finlync gives corporate finance and treasury departments complete and direct control of their data.
Today, API first companies are rewriting the rules of payment infrastructure. Plaid kicked off the revolution by unlocking transaction data, and since then, the API economy has continued to transform financial services, enabling virtually any software company to offer financial products and data directly to their end customers.
Alongside the rise of embedded finance, we’ve also seen new payment monetization strategies emerge via innovative payment facilitator models (“PayFacs”). Exciting companies like Finix are helping software companies set up their own payment processing systems in-house in order to monetize on transaction volume.
We hope you can join us for the 18th Annual Montgomery Summit on March 3rd and 4th where we will hear from some of the companies mentioned above, along with many others, share their views on the rapidly changing landscape. To register , please click the following link: https://cvent.me/mqWNGX. If you have any questions, please contact info@montgomerysummit.com.
