Is Embedded Business Banking Service The Future?

Remember those days when you would meet your personal banker to take care of day-to-day banking activities? Enter 2021 - banking as a function has started to disappear. Now you don’t want to go through the physical pain of visiting the bank for managing credit, wealth, and so on. Embedded business banking is born, therefore. In fact, it has taken over traditional banking to offer convenient functionality and frictionless experience. Consumers today can meet their banking and non-banking needs at one place, thanks to embedded finance. 

One such app that is revolutionising the embedded financial service space is the Stripe Treasury by Stripe. It relies on a banking-as-a-service API for embedding financial services in a platform or marketplace. The best part is that end customers can now pay bills, hold funds, or even earn interest with a single integration. In this article, you’ll get to know more about how businesses can leverage Stripe Treasury to offer a seamless experience to their customers along with case studies.

A Sneak-peek Into Stripe Treasury

If you are thinking whether it’s worth reading more about Stripe Treasury, here are a couple of statistics from the recent Stripe research for you to look at and decide for yourself.

- It takes almost 5 and a half days for an online business to open a bank account
- 23% of businesses have to send a fax before opening a bank account
- 55% of businesses go through the pain of visiting a branch to open a bank account
- 46% of companies complain that banking experience hinder their growth

Both bureaucratic hoops and lengthy application processes stop online businesses from accessing financial services. And, this is what Stripe Treasury tries to address with its banking-as-a-service API that lets you embed financial services on your platform. To make it even seamless for customers, they have partnered with leading financial institutions like Goldman Sachs, Citibank, Evolve Bank and Trust, and Barclays.

What Can Businesses Do With Stripe Treasury? 

The Banking-as-a-Service (BaaS) model opted by Stripe Treasury allows you to create a scalable financial product suitable for your customers. Their partnership with the globally recognized banking institutions makes it easier for you to offer a wide variety of services within your platform. Wondering what kind of services? Starting from wire transfers to creating accounts to paying bills and whatnot. Here is a little more about what you can do on your platform with Stripe treasury.

• Creating Accounts: Once your platform goes through the BaaS API integration, you will be able to create accounts for your users and verify their identity as well. What else? Your business can run KYC checks, OFAC and sanctions screening, and so on, thanks to Stripe’s partnership with leading banks. 
   
• Storing Funds: Storing funds and configuring their properties is one of the building blocks of any financial services. With Stripe Treasury, you will be able to manage a wide variety of properties such as routing number, IBAN address, account number, etc.
   

• Moving Money: Want to add to the convenience of your users? Worry not, Stripe Treasury empowers your platform to do that as well. With the integration, you will be able to offer various funds transfer services such as domestic/international wires, check deposit, same-day ACH settlement, and the list goes on. 

• Paying Bills: Your customers will be able to make one-time or recurring payments as well. Also, they can save vendors or pay to an external address as well. 

• Attaching Payment Cards: Custom payment cards add to the customers’ convenience of spending funds. Needless to say, Stripe Treasury lets you do that as well. You can offer a diverse range of cards to your users including provisional virtual cards and branded physical cards.

5 Banking Use Cases of Stripe Treasury

Want to custom build the most efficient financial product for your customers? Here are 4 banking use cases that help you get an idea of what you can achieve with Stripe Treasury. 

1) Bank Account Replacement: Stripe Treasury allows you to create an account that is not only FDIC insurance-eligible but also earns interest. Such accounts come with various facilities such as remote check deposit, ACH and wire transfer, etc.

2) Open Loop Wallet: Another benefit that your business gets with Stripe Treasury is the convenience of Open Loop Wallet. An open loop wallet is a simple account that stores value and can be topped up. Such wallets add to the convenience of your users shopping within or outside your business platform.

3) Payout Card: This offering of Stripe Treasury helps you provide on-demand workers with immediate access to their earnings. The money is stored in a stored-value account that earns interest like any other account. The account remains connected to the card via Stripe Issuing. Such payout cards have the ability to replace the corporate credit cards issued to employees across the globe. If implemented, this can be an absolute game-changer from the perspective of finance process improvement. 

4) Product Operations Account: This account comes with cards with which on-demand workers can fulfil in-demand purchases along with orders. Users can create interest-earning accounts for each such card and limit spends as well. 

5) Pay Employees and Vendors: This is perhaps the biggest benefit that any business can realise with Stripe on its side. Businesses now can create bank accounts on behalf of their employees without any hassle and easily pay them their wages. On the other hand, Stripe will change the way businesses process vendor payments as well. Once businesses enable payment automation with single ERP integration, they will never have to worry about integrating with different banks across the world for paying vendors every month. 

The entire idea of Stripe Treasury revolves around the idea of making banking functions easily accessible to customers. And, you can even go for customisation as per your requirements. 

How Is Shopify Using Stripe Treasury?

Shopify, the Canadian multinational eCommerce company, uses Stripe Treasury to fuel Shopify Balance which is used by merchants to manage their funds on the platform. Not only they can pay bills but also can easily track the expenses from within Shopify. 

Since Stripe treasury is in its initial phase, it is still invite-only. If your business is based in the US, you can raise a request to participate here. 

Unsure about the right platform to choose for embedded business banking? Let the experienced consultants at NeeVista help you choose the best platform for your embedded financing needs. Don’t hesitate to drop a line here or give us a call at 0424 357 817!