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The buy now, pay later (BNPL) provider announced a multiyear deal with Mastercard to expand the reach of its solutions. Splitit will leverage Mastercard's network and technology to enable merchants to offer its solutions both in-store and online, and they'll develop new installment products and related offerings together. The firms plan to pilot the partnership in the UK, Canada, and Australia, and intend to expand their collaboration globally, Splitit CEO Brad Paterson told Business Insider Intelligence.
Working together will bolster Splitit's acceptance and Mastercard's offerings to merchants and cardholders:
Mastercard should give Splitit's solutions tremendous reach, building on the firm's existing efforts to boost its distribution. Mastercard's status as one of the leading card networks globally means it's accepted by millions of merchants around the world, both online and in-store. Through this partnership, all of those merchants may gain the option to offer Splitit's solutions, which could expose more consumers to its products and make it one of the best-known players in the BNPL industry. In addition to this collaboration, Splitit has partnered with Visa, Stripe, Shopify, and Magento as a part of its efforts to be available wherever consumers shop, Paterson said. By working with Splitit, Mastercard can deepen its involvement in the BNPL space and boost its appeal to merchants. Mastercard acquired Vyze, a fintech that uses an API to enable merchants to offer credit options to customers, in 2019, and working with Splitit continues its efforts to connect merchants to BNPL products. Giving merchants access to BNPL offerings from firms like Splitit could push more sellers to use Mastercard's solutions because of consumers' interest in such products and their potential to boost conversion rates and average order values. If Mastercard's merchants and their customers show an appetite for Splitit's solutions, the card network might even decide to team up with other BNPL firms in the future to give merchants and consumers more financing choices at checkout.
This partnership comes at an important time for Splitit, as BNPL firms' performances are booming due to the coronavirus pandemic and competition is heating up in the space. Splitit brought in $25.8 million in merchant sales volume (MSV) in May, its largest monthly MSV ever, while competitors like Klarna and Afterpay have seen their merchant bases and sales volume surge as of late too. That's because the pandemic may be boosting consumers' interest in flexible payment options as they deal with issues like unemployment, and the crisis may have driven more merchants to offer BNPL solutions in an effort to maximize their sales as consumer spending plummeted. Additionally, major competitor Klarna just expanded into Belgium and debuted a rewards program. So, with the industry thriving and competitors ramping up their businesses, being able to reach Mastercard's entire merchant network could help Splitit capitalize on interest in BNPL and battle other firms to lead the space as it takes off. Want to read more stories like this one? Here's how you can gain access:
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Inside Mastercard's playbook for attracting fintechs. An exec outlines the strategy that has helped the card giant nab high-profile startups like Brex, SoFi, MoneyLion, and Dave.
Summary List Placement When personal-finance startup Dave was considering switching its card issuer for a...Summary List Placement When personal-finance startup Dave was considering switching its card issuer for a new product, the pitch from Mastercard came straight from the top. The company was preparing to launch Dave Banking, a spending account with a debit card, and mulling its options. The fintech had established itself as an up-and-comer in the space — nabbing a $1 billion valuation and backing from the likes of Mark Cuban — but was still relatively young in its life cycle. However, the youth of the company didn't stop Mastercard CEO Ajay Banga from taking Jason Wilk, cofounder and CEO of Dave, out to dinner in an effort to court the startup's business. The effort left a lasting impression on Wilk, who ended up picking Mastercard to be the exclusive partner of Dave Banking, which launched this July. "Starting so early on the relationship building, you typically only see that from a startup trying to find their first client, not from a company that is one of the biggest companies in the world," Wilk told Business Insider. "That level of optimism from all the way at the top of a multi-hundred billion dollar enterprise has made us feel special and let us know we're building it with a partner that it's not about the short-term win. It's about the long-term relationship building," he added. See more: POWER PLAYERS: These are the 15 execs at Mastercard leading the card giant's strategies in new businesses focused on cybersecurity, data, and analytics Mastercard's aggressive courting of Dave isn't an outlier. The card giant has set its sights on fintechs in recent years in hopes of embedding itself with startups looking to become a core part of the next generation of financial services. For a fintech, partnering with a network like Mastercard and Visa means it can offer consumers things like debit cards. And since Mastercard and Visa operate globally, these partnerships means that fintechs can expand their offerings outside of their base countries. SoFi, Brex, and MoneyLion have all announced new products with Mastercard. And it's not just a matter of nabbing business from red-hot fintechs. In gaining these clients, Mastercard is also stealing away market share from its main competition: Visa. While both networks have seen declines in total volumes amid the coronavirus pandemic, Visa's market cap remains larger than Mastercard's. In the second quarter this year, Visa processed $2.5 trillion in payment volume and Mastercard processed $1.4 trillion. But the networks don't differ materially in terms of where they can process payments. So courting fintech partnerships often comes down to what the networks offer beyond payment processing, from fraud prevention to consulting-like services for fintechs looking to scale. A Visa spokesperson declined to comment for this story. Mastercard created a team specifically for fintechs One of the key people behind Mastercard's focus on fintechs is Sherri Haymond, executive vice president of digital partnerships at the card giant. In her role, Haymond is responsible for Mastercard's partnerships and business development across all digital channels with US-based companies. That means managing the relationships with tech companies like Apple, Amazon, Google, Lyft, and Stripe, as well as digital merchants. Over the past several years, Mastercard recognized that in the same way digital merchants' needs differ from traditional retailers, fintechs, too, require different service levels when they partner with Mastercard. So in February, a new segment was formed within Haymond's organization focused specifically on Mastercard's relationships with fintechs. "What we've learned, I think initially on the merchant side and now on the fintech side as well, is that these customers expect a different pace. It's very different from a traditional bank or a traditional retailer," Haymond said. And having a dedicated team supporting fintechs keeps Mastercard up to speed on the latest needs of the segment. "This segment alignment enables us to have a really good view into what the ecosystem needs from a product perspective," Haymond said. Read more: SoFi dumps Visa and makes Mastercard its exclusive partner as it gears up to add a credit card alongside its debit card Many of the account managers on the newly-formed team have fintech backgrounds in areas like product development and data science, Haymond said. So as Mastercard looks to add more fintechs to its network, its sales representatives are up to speed on the latest in the fintech space. "Having that whole ecosystem view is enabling us to move more quickly from a deal perspective," Haymond said. "And it's also giving us a lot of insight to bring back to the product team to help the product team be building things, adding features, and also creating things for distribution in ways that this part of the ecosystem wants them to be distributed." Startups treated like big-time clients A big part of Mastercard's selling point, according to the fintechs, is that it treats them like any other enterprise client. Fintechs that Business Insider spoke with didn't cite pricing or products as substantially different between Visa and Mastercard. In fact, none of the startups detailed any missteps or issues they had when previously dealing with Visa. Instead, it's been Mastercard's ability to go above and beyond when working with fintechs. "We've been getting support from Mastercard almost as if we were JPMorgan," said Henrique Dubugras, cofounder and co-CEO of $3 billion Brex. "[Sherri's] pitch to us back then, which turned out to be very true, is that Mastercard believes that startups and digital players are the future of the company," Dubugras said. Dee Choubey, founder and CEO of MoneyLion, told Business Insider what set Mastercard apart was its consultative approach. The fintech has weekly chats with senior executives at Mastercard to help on a broad range of issues, he said. Things like application programming interfaces, fraud tools, and contactless payment tools have become table stakes, Choubey said. What's more critical, he said, is understanding how to properly pull on those levers. "The order of operations. How do you sequence them? How do you put them in front of consumers? What's worked in the past? What are best practices? How do you get top-of-wallet spend characteristics? All of those things," he said. "You can have the best technology, but if you're not storytelling properly for the end consumer, it's not going to work," he added. Dave's Wilk shared similar experiences, adding that Mastercard has gone out of its way to offer all of its resources to help the fintech succeed. "Even if we are having issues with some of our third-party partners, who they are not even directly involved with, they would even sit on calls to make sure that things are going smoothly," he said. "That, I think, is pretty unparalleled service." Both Mastercard and Visa are leaning into the fintech ecosystem As fintechs continue to popularize digital payments, both Mastercard and Visa have built programs aimed to bring fintechs onto their networks. Visa launched its Fast Track program internationally in 2018 and in the US in 2019. Fast Track is meant to streamline the process for fintechs to link in to the company's massive network of payment rails. It also helps companies build their payments stacks with Visa's partners like Stripe, Marqeta, and Very Good Security. Terry Angelos, global head of fintech at Visa, told Business Insider in May that it saw record interest from fintechs in the program in the first half of 2020. It currently has 220 participants globally. But Mastercard's engagement takes it a step further, according to the fintechs that have switched from Visa. "We found that Mastercard was a lot more supportive in terms of our innovation," said Brex's Dubugras. Beyond Haymond's team, Mastercard has programs within its Accelerate organization like Start Path, a 6-month incubator for startups looking to scale. "Mastercard is a great partner given our approach of building technology from scratch, that in turn allows Brex to deliver superior customer experiences from card rewards, to fraud protection," Dubugras said. "Although the processes we have in place are definitely standardized and they make things happen really efficiently, we really provide a very customized partnership approach with customized solution development and problem solving for each particular partner," Haymond said. How Mastercard's network with partner banks and processors fits in Haymond's team doesn't just work with fintechs, it also has relationships with the partner banks and processors that power fintechs, meaning that product development can happen in faster, more streamlined ways. With Brex, for example, Mastercard also works with its partner bank Radius Bank. "It really streamlines the way that things can happen, when all of the partners are aligned under one account management team," Haymond said. And it's not just about cards. Mastercard's other payments infrastructure, like Mastercard Send, is used by fintechs like MoneyLion to help its customers move money between bank accounts quickly. As Mastercard continues to build new products and solutions beyond cards, its engagement with fintechs and the players that support fintechs, like partner banks, drives the company's strategy. "We develop very deep strategic relationships with these partners and we listen to them," Haymond said. "A huge part of my team's role is to take in all of that feedback and understand what's important to these partners and understand what their priorities are and that in a big way informs our product roadmap." Haymond says mission alignment is Mastercard's biggest differentiator One of Mastercard's biggest differentiators, Haymond said, is that its own corporate missions, like pushing for inclusive financial growth, are aligned with those in the fintech community. "It's really been the reason that we have been winning, because we're really aligned on this idea of inclusive growth and financial inclusion," Haymond said. From getting gig workers paid quickly to prioritizing environmental issues, Mastercard leverages its corporate responsibility strategy in its engagement with fintechs. Aspiration, an environmentally-focused digital bank, for example, chose Mastercard because of its shared prioritization of green initiatives, Haymond said. And getting involved with fintechs on non-card related initiatives gives it an edge when it comes time to bid to become a fintech's card network as it already has a seat at the table, Haymond said. "Oftentimes the partners that are active in the fintech community are doing what they do because they've set out to achieve a certain mission," Haymond said, "and that mission happens to be the same as ours. It's not something that we just talk about, it's in the fiber of what we do and what we care about." Got a tip? Contact this reporter via email at email@example.com, Signal (801-824-5318), or direct message on Twitter @shannen_balogh. Read more SoFi dumps Visa and makes Mastercard its exclusive partner as it gears up to add a credit card alongside its debit card Investors say these 38 fintechs are the next generation of breakout B2B stars, following in the footsteps of Plaid and Stripe The CFO of Visa maps out 2 areas it's investing in beyond cards to keep up with fintechs that are transforming the payments gameSEE ALSO: Visa's fintech chief lays out how a new program to bring startups on board in just a few weeks will help tap a $185 trillion opportunity SEE ALSO: Fast-growing lending app MoneyLion is joining the fractional trading craze and thinks it will democratize investing in pricey stocks like Amazon SEE ALSO: JPMorgan slashed how long it takes to test out fintechs from 9 months to 3 weeks with a new process that could save it millions as it looks to buy, invest in, or work with more young companies Join the conversation about this story » NOW WATCH: Why electric planes haven't taken off yet
THE SUBSCRIPTION PAYMENTS ECOSYSTEM: Consumers' rising interest in subscriptions is driving merchants to offer these services — here's what solutions providers need to know to capitalize on the opportunity
Summary List Placement This is a preview of the Business Insider Intelligence Subscription Payments Ecosystem premium...Summary List Placement This is a preview of the Business Insider Intelligence Subscription Payments Ecosystem premium research report. Purchase this report here. Business Insider Intelligence offers even more e-commerce and payments coverage with our Payments & Commerce Briefing. Subscribe today to receive industry-changing retail news and analysis to your inbox. More and more merchants are introducing subscription services to take advantage of consumers' growing appetite for the services and to reap the benefits of recurring revenue. Business Insider Intelligence estimates that B2C e-commerce, video streaming, and music streaming alone will bring in over $54 billion in payments volume in the US in 2020, highlighting the market's value. With additional opportunities in industries like health and fitness, video games, and transportation, there's ample opportunity for merchants to attract revenue and for subscription solutions providers to add more volume. But merchants have to be prepared to handle potential pain points resulting from subscriptions' recurring payments. Subscription payments are defined as payments that recur on a scheduled or usage-based basis for products, memberships, services, and more, offering new and consistent revenue opportunities for merchants. And because subscription payments see consumers enter their payment information once and have the same account charged in the future, consumers aren't present to address any problems after that point, potentially causing merchants and payments providers to lose volume that will be difficult to recover. Several types of solution providers are jumping at the opportunity to help merchants handle subscription payments in order to take advantage of the model's rise themselves. These firms fall into three groups: payments providers like Stripe and PayPal that already handle merchants' payments and are offering additional solutions specific to subscriptions; subscription-dedicated solutions providers, such as Ordergroove and Recurly, that don't process payments but do offer tools that help merchants with many stages of the subscription process, including payments; and merchant platforms, like BigCommerce and Shopify, that offer merchants access to multiple subscription solutions providers or their own suite of offerings. All of these providers have the potential to rack up volume and revenue by becoming merchants' choice to handle their subscription programs. In The Subscription Payments Ecosystem, Business Insider Intelligence examines the size of the current subscription payments opportunity and discusses what's driving its growth. We then evaluate the top types of subscription payments solutions providers, as well as their strengths and weaknesses, before analyzing the subscription payments process and what makes it unique from a standard one-time payment. Finally, we make recommendations for both solutions providers looking to facilitate subscription payments and attract clients, and merchants that offer subscription products and want to maximize their performances with solutions and efficient payment processes. The companies mentioned in this report are: ACI Worldwide, Adyen, Amazon, AMC, American Express, Apple, The Atlantic, Automated Clearing House, BarkBox, BigCommerce, Birchbox, Blue Apron, Braintree, Chargebee, Chargify, Discover, Disney, Dollar Shave Club, EMVCo, Fusebill, GoCardless, Global Payments, Grubhub, Harry's, HBO, HelloFresh, Hulu, JCB, Loot Crate, Lyft, Mastercard, Magento, Mailchimp, MoonClerk, Netflix, Nets, The New York Times, Ordergroove, Pandora, Panera Bread, Patreon, PayPal, PayWhirl, Peloton, PlayStation, The RealReal, Rebillia, Recurly, Rent The Runway, Shopify, Spotify, Square, Squarespace, Stitch Fix, Stripe, Target, Tidal, TSYS, Uber, UnionPay, Visa, The Wall Street Journal, Walmart, Weebly, Wix, WooCommerce, WordPress, Zoho, Zuora, 24 Hour Fitness, 3dcart. Here are some key takeaways from the report: Consumers and merchants are both interested in benefits from subscriptions, increasing the popularity of services using the model to the point that they're attracting millions of dollars of volume each year across a number of industries. Merchants are jumping at the opportunity to offer subscriptions because their recurring format can support unique offerings and rack up more revenue, while consumers are attracted by the convenience, savings, and access they can offer. As more merchants start providing subscriptions, a number of firms are looking to tap into this market to capitalize on the industry's growth potential. Each type of solution provider offers its own strengths and weaknesses — but all of them have the chance to succeed. Solutions providers and merchants alike need to understand the best practices for their segments in order to succeed in subscription payments. Providers must find ways to limit churn and find new ways to improve and innovate their processes. At the same time, merchants should consider whether they would benefit from developing their own subscription solutions, while also looking for new opportunities to attract subscription revenue. In full, the report: Lays out the volume opportunity subscription payments offer both merchants and subscription solutions providers across industries. Considers why the subscription opportunity is growing by looking at why the subscription model appeals to merchants and consumers. Discusses the three types of solutions providers targeting the subscription payment opportunities and their strengths and weaknesses in doing so. Examines how the subscription payment process differs from a one-time purchase. Highlights the main pain points of handling subscription payments for merchants and solutions providers and offers way firms can address them. Provides recommendations for solutions providers and merchants that can enable them to maximize their performances in the subscription payments space. Interested in getting the full report? Here's how to get access: Business Insider Intelligence analyzes the payments and commerce industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report. Sign up for the Payments & Commerce Briefing, Business Insider Intelligence's expert email newsletter keeping you up-to-date on the people, technologies, trends, and companies shaping the future of consumerism, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
One-click checkout startup Fast used this pitch deck to nab $20 million from investors like fintech giant Stripe. Here's a look at its vision for taking on Apple Pay.
One-click login and checkout startup Fast just raised a $20 million Series A led by the...One-click login and checkout startup Fast just raised a $20 million Series A led by the $36 billion fintech giant Stripe. Fast's one-click login product is live, and in the coming weeks, it will roll out it's checkout product. Fast's existing investors include Global Founders Capital, Index Ventures, and Kleiner Perkins. Fast's co-founder and CEO Domm Holland told Business Insider that the key to a pitch deck is to keep it simple, go sparse on text, and leave opportunities for investors to ask questions. Here's the 15-slide pitch deck the startup used to raise its Series A. Check out Business Insider's Pitch Deck Library here. Password management and online checkout have always been pain points for online shoppers. Fast, a one-click login and checkout startup, is looking to solve that problem. And it just raised a $20 million Series A led by the $36 billion fintech giant Stripe. "The issue that we're actually solving is that there's basically a missing layer of the internet, which is the identity layer," Domm Holland, co-founder and CEO of Fast, told Business Insider. Fast integrates with online merchants to offer customers the ability to log in and checkout with one click. The first time a consumer sees the Fast checkout button, they can sign up for free. After that, they can check out with one click everywhere they see the Fast button. So to grow its user base, Fast will look to integrate with as many online merchants as possible, from e-commerce retailers to online media companies. While Fast's one-click password product is already live, with this latest fundraise, it will now roll out one-click payments and checkout features. "Much of our growth over the next 12 months is basically putting the button on as many websites as possible," said Holland. Part of that growth will come through its partnership with Stripe, as starting next month, all of Stripe's merchants will be able to integrate Fast into their checkouts. Long-term, the startup will look to build more online shopping products for consumers, like order tracking and returns management across different online stores, Holland said. To be sure, Fast isn't the only one looking to solve this problem. PayPal, for one, offers a one-click checkout product, and credit card issuers like Visa and Mastercard have partnered up on a one-click checkout, too. But Holland says that a key differentiator for Fast is its platform-agnostic approach. Apple Pay, which also integrates into merchant check-out windows, is Fast's biggest competitor, Holland said. But its checkout product can only be used by iPhone users and when shopping online, only on Apple's Safari browser. Fast's Series A, which closed at the end of March, comes at a time where venture investors are shying away from early-stage companies, focusing much of their capital on existing investments. But founders could take this opportunity to meet with as many people as possible, albeit virtually, realizing that relationships may take longer to build, Holland said. For founders looking to raise, keeping potential investors in the loop is also key. "You want to be lines, not dots, and you want to show traction," said Holland. "The first thing I always say to anyone who's going to be fundraising is start putting out investor updates and send them to everyone who you would want to have in the round." And while it's easy to try and answer all possible questions in a pitch deck, Holland instead advises to keep it light on text. "You should be structuring a pitch deck in a way that you actually know what question they're going to ask you because it's missing a bit of information that you expect that they will want," Holland said. Not only will this keep investors engaged, it will also demonstrate the founders' ability to articulate the pitch and answer questions live, Holland added. Stripe's funding comes just months after Fast's November seed round, which was led by Index Ventures with participation from Global Founders Capital and Kleiner Perkins. Here's the 15-slide pitch deck it used to raise its Series A.SEE ALSO: Startup QuadPay is dramatically expanding its reach by partnering with payments giant Stripe to offer shoppers the ability to buy now, pay later at any store SEE ALSO: $35 billion fintech Stripe just inked a deal with hospitality PoS-maker Lightspeed — and it's a case study in navigating the tricky world of payments SEE ALSO: 4 top VCs explain why Stripe, Square, and Finix are going to be big winners in a post-COVID-19 world