FinTech Is Anyone’s Game
Where once the price of entry into Fintech was sky high due to difficulty in obtaining data, needing to build out intense PCI compliance, or having to hire in big talent with a ton of experience in FinTech, now startups can take advantage of API’s offered by a number of innovative FinTech companies to launch their amazing ideas in mere weeks as opposed to months or years.
Last spring I was in San Jose for the FinovateSpring and Apps World conferences. While in town I participated in a FinTech panel about how API’s have simplified entrance into the FinTech space. I was blown away by the API’s that are available to us techies in FinTech that I’d never hear of and thought I’d share some of the products we discussed as well as a few examples of how they’re being leveraged.
Bill Payment API's
Rewind a few years in my entrepreneurial journey. I was in year two of what was becoming a very frustrating startup experience. We had built Comfy - an app to help college students find an apartment - and we couldn’t find a great way to make money. We decided to pivot and allow our users to pay rent through the app. The reasons were two fold:
1) We were desperate to make money and we felt we could make money on rent payments.
2) Our customers used Comfy for about a month and were done with it. We were hopeful that if they kept using Comfy to pay rent they would use us the next time they wanted to find a place to live.
The problems? How are we going to actually process rent? We didn’t know the first thing about PCI compliance or processing money. Even if we did figure out how to do all of that, did we have enough money left to build out the solution and still successfully pivot?
Fast forward to the present. Over the last couple of years we’ve figured out how to process money, get PCI compliant, and pay out to over 4,300 different vendors on behalf of our customers. Our database of vendors include everyone from your local utility provider to your cell phone, insurance, or coffee subscription. Unbill - an app that splits and actually pays bills for roommates - was born out of all the stress and failure of the Comfy product. We spent lots of money and learned a ton. Then we asked the question, “what could other people do with our tech that we haven’t even thought of?"
We were overwhelmed by the response. Roommate matching companies reached out wanting to offer bill splitting and rent payments to their customers to keep them in the app after finding a roommate. Mobile banks wanted better ways to offer bill pay to their customers than the traditional bill pay offerings. Property management companies wanted to offer rent and bill payments in their mobile applications. To-do list apps wanted to let their users tap to pay their bill instead of go out of the app to pay the bill then come back to check it off their list.
We couldn’t believe the possibilities, and we hear better ideas every day from companies looking to add bill pay to their apps/websites. You can find out more about the Unbill bill payment api here.
After Money 20/20 this year I feel confident that API's will lay the essential ground work for innovation in FinTech during the years to come. A comment from Mike Quindazzi at Money 20/20 captured the major FinTech growth opportunities that I believe will be fueled by easy to access API's.
Financial Data API's
There’s obviously a lot more to FinTech than payments. Think RobinHood, WealthFront, Personal Capital, Betterment, and more. Their tech is incredible! I used to ask myself how they get the data they need to do what they do. I wondered how much time it would take to put all that together.
Well when you use Xignite - which all of them do - you can access that data pretty easily. The amount of data Xignite exposes is mind boggling. Better yet? Their API’s are super easy to integrate with and simple to understand. During my panel with the Xignite CEO he was asked how easy their API’s are to understand and integrate with. His answer? “If your grandma can’t understand it, it’s too complicated" Ease of integration with FinTech API's was an important theme this year at the Money 20/20 conference as captured by Mauricio Figueroa below:
Here is one more example of how companies are using Envestnet Yodlee and Plaid. Ever wondered whether you actually use all the data on your cell phone plan and could move to a lower rate? Or whether you pay more than your neighbors for electric? Or if you really got that discount the cable company promised? A couple of new startups are using API’s from Envestnet Yodlee and Plaid to do just that.
If you’re working on a FinTech company that relies on data and haven’t taken a look at Xignite, Envestnet Yodlee, or Plaid you’re crazy and you may be adding months to your build out schedule.