Tern brings finance tech to all with fintech-as-a-service

In recent years, fintech has grown to mean many things to many different people. While the number of fintech companies has continued to skyrocket, alongside digital adoption, record-setting funding rounds and eye-popping valuations, organizations in other sectors and markets have also begun to look into incorporating these services into their platforms.

But not every company has the time, money or motivation to match their desire to implement fintech services. This is a place where a company like Tern, a fintech-as-a-service provider, comes into play.

“We help people launch programs, through our technologies that are connected to a number of different processors and a number of different banks. We offer pretty much every fintech product available,” Founder and CEO Brion Bonkowski said in an interview with FinLedger.

Bonkowski says that Tern has boiled down the main fintech products to include Know Your Customer (KYC) onboarding, virtual and physical prepaid cards, bank verification and payouts. While the company has been offering these four core products since its founding in 2015, Tern now has begun to export these services to customers through the “as-a-Service” construct.

“We’re doing something a little bit different than everybody else,” Bonkowski said, mentioning that while most fintech-as-a-service providers offer their services through APIs, companies still need to hire developers to incorporate the software, work out regulations, and sometimes find their own bank.

“We’re boiling all that down to a very simple KYB (Know Your Business) onboarding process, where a developer will be able to login on a Sunday night with a valid EIN, and KYB themselves onto our platform and start issuing cards immediately,” he said.

Tern offers these solutions through API but also through a turnkey, framework-based system they call widgets. These widgets currently only make up about 20% of Tern’s portfolio, but Bonkowski says that they are being increasingly adopted and expects them to make up 50% of the business by next year and 80% by 2025.

Widgets do not offer the same flexibility as utilizing APIs, or obviously building financial systems from scratch, but offer the benefit of speed if a company wants to quickly roll out financial tools within their existing application.

“You’ll be able to change pretty much everything, like color, texture, gradient, text and whatever. You’ll be able to change all that stuff, but it’s certainly not as flexible as a fully native experience,” Bonkowski said.

Mass payout

Aside from its new fintech-as-a-service suite, Tern is also beginning the launch of its mass payout tool, a fully operational payment issuance platform to pay contractors and pay vendors.

“But what’s different about it, is that you’ll be able to pay somebody via a virtual prepaid card instantly, a physical prepaid card mailed to them, ACH check, wire, cross-border transaction, and more,” Bonkowski said, saying crypto is likely in the future as well.

“If I’m a business and I want to pay my 50 contractors, I put in their email addresses, I put in how much I’m gonna pay them, I hit a button, and they all get an email alert. And then they all come log in, and they pick how they want to be paid, and then that’s saved as a token for repeated use,” he said.

The company recently built the solution, to help TransferMex enable US employers to distribute prepaid cards with same day cross-border remittance capabilities.

“TransferMex is a perfect model of how Tern can deliver speed-to-market solutions, and this program highlights our cross-border capabilities,” Bonkowski stated at the time of that press release. Such a perfect model, that Tern is utilizing the model as a reference implementation for its new solution.

“We have some banks that we’re now reviewing, the opportunities of which banks are going to be for which verticals. But we think that we want to democratize-and-attack. We want to help people be innovative, and we think the whole industry is stifled, slow, and pretty crummy.”

In other recent fintech news, Botkeeper raised a $42 million Series C and added Grand Oaks Capital’s chairman Tom Golisano to its board. JPMorgan also released its report on central bank digital currency, saying a multi-currency network could save corporations $100 billion per year.

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