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May 06, 2021

Partnering with Railsbank to power the next generation of financial needs

Farid Sedjelmaci & Richard Kotite

As digital finance has grown, embedded finance is changing customer experiences and empowering businesses to develop innovative models that people can engage with their money on their terms. From digital wallets like Apple, Google, and Samsung to embedded point of sale lending like Peloton’s partnership with Klarna, it’s clear that where and how people interact with their finances is undergoing a massive shift. As a result, a new generation of companies outside of financial services are providing new products and services to allow people to better access and manage their money in a more personalised manner.

There’s a huge, nascent opportunity: a recent report by Lightyear Capital, estimates that embedded finance will grow from £16 billion in 2020 to £164 billion in revenue in 2025. Together, Banking-as-a-Service platform Railsbank and Plaid will make it easier for any company—inside or outside of financial services—to take advantage of the massive embedded finance opportunity. With easier embedded finance, companies can offer innovative payment products that attract and retain customers, boost engagement, and simplify money movement, from digital wallets to online savings accounts. 

Through a strategic partnership, Railsbank customers in the UK will gain access to Plaid’s Payment Initiation API to accept instant bank payments directly within their app or website. With Plaid’s API, Railsbank customers—in fintech and beyond—can enable instant account-to-account transfers and create innovative payments journeys. As a result of the partnership, Railsbank customers have all the benefits of Plaid’s PIS product, without having to onboard with two separate service providers. 

The partnership also offers added benefits to customers like increased conversion and higher confidence though instant confirmation of a payment’s status. With Payment Initiation, people don’t have to enter card numbers to fund accounts and pay from them, reducing the possibility of payment failures and eliminating any uncertainty of whether a payment has completed. In addition, companies can reduce friction and improve customer loyalty thanks to a smooth, holistic user experience.   

For companies like ikigai, a challenger bank that combines wealth management and banking into one digital account, a quick, simple onboarding process is critical. ikigai leverages the power of Plaid and Railsbank to speed up and simplify their account opening process and reduce the cost and speed of transferring funds into ikigai accounts. Plaid’s flow results in 75% fewer clicks when compared to a manual account transfer, reducing the time of account opening by 50%. 

"The new partnership gives ikigai access to a best-in-class payment initiation solution to streamline our account funding capabilities, and a seamless experience for our clients. While the benefits are clear, for challenger players such as ourselves, open banking can mean a significant operational hurdle with substantial time investment needed to meet them. With Railsbank’s, and now Plaid’s, operational support, we’ve been able to tap into those benefits, allowing our clients to easily top up their accounts through open banking, while still focusing our full attention on ikigai’s growth. We're excited to see how this partnership grows and takes us closer to redefining the future of wealth.” - Maurizio Kaiser, co-founder of ikigai

The true scope of the embedded finance opportunity is just starting to take shape, yet the significant opportunities it can provide are already becoming clear. Looking ahead, this partnership marks a significant milestone in Plaid’s journey to provide people with access to the financial products and services that leverage the full spectrum of benefits that open finance can bring. 

If you’re building financial services products–whether they’re standalone or embedded–reach out to Plaid's team to learn more about how the power of Plaid and Railsbank can help.