Visa-backed Railsbank teams up with Plaid for embedded finance

Banking-as-a-Service platform Railsbank and Plaid have joined forces enabling companies in the UK to instantly accept bank payments within their app or website. 

The strategic partnership brings Plaid’s API for initiating a payment directly into Railsbank’s platform that powers account-to-account transfers including bank and card payments, subscription purchases and paycheck advances.

Through Plaid’s Payment Initiation API, Railsbank customers, which includes the likes of digital banking app Sync., digital insurer SingLife and money management platform Ikigai, can directly embed open banking-style payments into digital flows without having to go through a separate onboarding process.

The partnership also offers added benefits to customers like increased conversion and higher confidence through 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,” Plaid said in a statement.

The aim of the partnership between Plaid and Railsbank is to help firms to tap the embedded finance opportunity. A recent Lightyear Capital report revealed that embedded finance revenue will jump to $227.5bn in revenue in 2025 from $22.2bn in 2020.

Challenger banking and wealth management Ikigai has already seen the benefits. Ikigai co-founder Maurizio Kaiser said: “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.

“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.”

Plaid added that the partnership marks a “significant milestone” in its journey to provide consumers with financial product and service access that will use open finance benefits.

Further highlighting the benefits of open finance, Plaid head of international Keith Grose said, “The true scope of the embedded finance opportunity is just starting to take shape, but it is already clear that Open Banking payments will emerge in many more places in the years to come. As FinTech-powered payments and digital wallets gain prevalence, more companies will seek to leverage the power of APIs through partnerships like Railsbank and Plaid to make it easier to move money online.”

Commenting on the association, Railsbank co-founder and CEO Nigel Verdon said, “This partnership is all about making it easier for any company, or brand, to embed finance into their customer journey. We are creating one of the major building blocks that make embedded finance a viable proposition for virtually every company, or brand, in business today.

“Together we are making it simpler for any company to take advantage of the golden opportunity that changing consumer demand and Open Banking presents, enabling them to deliver innovative financial services that attract and retain customers and boost their bottom lines.”

Founded in 2013, Plaid is used by a host of digital financial apps and services including Betterment, Expensify, Microsoft and Venmo, to make it easy for consumers to connect their financial accounts with the apps and services they use. The company has serviced more than 11,000 financial institutions across the US, Canada and Europe.

The partnership with Railsbank comes less than two weeks after Plaid and Paysend announced their collaboration to speed up digital transfers. Furthermore,  Plaid recently secured $425m in a Series D financing round to scale its platform, raising its valuation to $13.4bn.

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