Don't hate; collaborate.

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Hey Fintech Nerds 👋,

I'm enjoying the first week of paternity, so called in support from Alex Johnson for a guest Rant. I asked him, "what do you want to scream into the void." The answer? "Don't hate; collaborate." 

I also had some companies and a brief read written before we got our new arrival, so there's a little bonus there below.

Missing longer rants?

My most popular piece this year was “Is payments a race to the bottom,” and if you haven’t read it yet, go ahead and check it out.

Here's this week's Brainfood in summary

📣 Rant: Don't Hate; Collaborate by Alex Johnson

💸 4 Fintech Companies:

1. Jasmine - The Renewable Energy Certificate Marketplace

2. Era - The Open Finance + GenAI "financial advisor"

3. Artis - Trade Finance Receivables Marketplace

4. Pidgin - The RTP connector for banks and CUs

📚 Good Read: Our money in data

Weekly Rant 📣

Don't hate; collaborate - by Alex Johnson

First of all, congratulations to Simon Taylor and his vastly more talented and wonderful wife on the birth of their second child.

Simon – we love you, and we hope you have a fabulous paternity leave!

Second, thank you to Simon for offering me a chance to contribute a short rant to his marvelous newsletter.

Are you ready? 

Here goes …

Fintech companies need to stop whining and start working together.

Look, I get it. It's frustrating that many banks in the U.S. have locked arms in an attempt to slow down or counter fintech innovation.

They share data with each other on bad actors in the financial services ecosystem, data which they use to limit the impact of fraud on their bottom lines. And they won't let you participate.

They have teamed up to create a P2P payments network that has quickly grown to become one of the largest in the market. And they won't let you buy it.

They have been actively working to create an industry standard for sharing consumer-permissioned financial data via an API. And you suspect they may be tilting the API spec in their favor.

Again, I understand – it's super frustrating.

But here's the thing – they're doing this because you're winning. You are gaining a share in the market. You are innovating faster. You are solving real customer pain points. You are (slowly) gaining influence with regulators and consumer advocacy groups.

And because you're winning, you have absolutely no excuse to whine about how unfair all this is.

You don't like that EWS won't let you join its fraud data consortium? Join one of the many fintech-led consortiums that are popping up (preferably one that is wise enough to allow banks to join as well).

You don't like that EWS won't let non-banks offer Zelle? Guess what? Zelle is expensive and riddled with fraud, so don't worry about it (and don't try to hack your way into Zelle … that is the path to the dark side). If you want to offer P2P payments, leverage infrastructure from a provider that doesn't discriminate against fintech (Visa and Mastercard come to mind) and build a superior product. Or, even better, work with other fintech companies to build a P2P payments service that is interoperable across companies!

Are you concerned that FDX is defining a data-sharing standard that may prioritize the interests of banks over fintech companies? Then get off your ass, stop outsourcing this work to the data aggregators (who may not entirely have your best interests at heart), and join FDX as a member and start pitching in!   

Don't hate. Collaborate.

4 Fintech Companies 💸

1. Jasmine - The Renewable Energy Certificate Marketplace

Jasmine is a marketplace for renewable energy certificates (RECs), which are contracts that track any claim for renewable energy benefits or accounting. Generators can sell their certificates, companies can buy to meet their carbon goals and accounting obligations, and traders can market make (much like in the broader energy market). Consumers who generate from solar can also benefit during tax season. 

🧠 This is a relatively early-stage company with some incredible backing. They have visible support from the Department of Energy and a division head from Saudi Aramco. This is a complex and fragmented market that pushes paper certificates around. It's ripe for a marketplace. Everyone is excited about the energy and the opportunity lately. Energy x Fintech x Climate. This is directionally correct. The question will be execution, momentum, and traction with the big orgs. (Oh and whisper this bit; it uses Polygon under the hood; that crazy smart contracty stuff might actually have a use)

2. Era - The Open Finance + GenAI "financial advisor"

Era connects to existing brokerage, transactional, and tax accounts to allow users to ask questions about their money. Users can ask things like, what subscriptions they have or how news (like interest rates) might impact their finances. Era will also be able to move money between accounts and aims to use a freemium pricing model (and not a percentage of assets.)

🧠 Mint is dead; long live the new Era? PFM x GenAI has to overcome the PFM problem. Personal finance management is a niche product that has almost zero examples of home-run success. It is the canonical feature, not a business. Enthusiasts (about 15% of consumers) love it, but everyone else won't bother, especially if they have to pay extra for it. What I fear about Era is they become just another one of those. However, this is an experienced team, and we don't know if conversational interfaces change that for consumers. This product needs to exist and might change how we interact with money. Although I'm setting a timer. T-minus 2 years until a big name brokerage copies+pastes this feature.

3. Artis - Trade Finance Receivables Marketplace

Artis is a marketplace allowing SMB borrowers to secure financing for import or export operations. SMBs have historically struggled to secure financing because banks lending rates are high or don't serve this market segment. 

🧠 Despite a low historic default rate (at 1%), SMB lending is expensive because it incurs high KYC/AML costs and lending to countries with poor credit ratings. Think about it this way. How do you know an SMB in Bangladesh or Nigeria is credit-worthy if you have no data? Artis aims to solve this with its market knowledge and in-house risk assessments. The market is hungry for high-yield private credit, so this is a huge opportunity, but how good is the investor's due diligence? 

4. Pidgin - The RTP connector for banks and CUs

Pidgin provides a simple integration platform and front end for smaller banks and credit unions to FedNow and RTP. Pidgin integrates to the bank's core provider, giving them a dashboard to manage real-time payments, users, and audits. 

🧠 Nice, but niche? The whole world is looking for gold in the "RTP gold rush" since FedNow launched. There's a method to this madness. Form 3 in the UK is a Series C company founded by ex-Barclays payments leadership that now sees more than 50% of the UK RTP volume on its platform. Unlike Pidgin, Form 3 is a cloud-native payments platform with tier-1 banks already using the platform. This model is interesting because it essentially says, let's outsource the payments platform tech stack entirely to a specialist.

Good Reads 📚

1. Our money in data

In the USA, 85% of the population works in the private sector and 15% for the Government in some way. Walmart employs 2.1m people, or about 1.3% of the working-age population. Median personal income is $40,080, household is $74,580. Salary makes 60% of incomes, government 23%, and investments 9%. 25% of Americans have some government income, averaging 65% of income for those who do receive it. 63% of the population has a FICO lower than 750 (non-prime).

🧠 The author spent six months putting the data together on this piece. You should go read it if you work in consumer finance in the USA. At all. 

That's all, folks. 👋

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Disclosures: (1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees. (2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a * (3) Any companies mentioned in Rants are top of mind and used for illustrative purposes only. (4) I'm not an expert at everything you read here. Some of it is me thinking out loud and learning as I go; please don't take it as gospel—strong opinions, weakly held.