The Issuers Report 2023: FinTechs’ Instant Payments Mismatch

ALPHARETTA, Ga, Sept. 5, 2024 – Ingo Payments, a trusted leader in account funding and disbursements solutions defined as Money Mobility, announced its acquisition of Deposits Inc., a provider of modern banking software tools and infrastructure. This acquisition accelerates the launch of its Modern Money Stack, which will enable banks, fintechs and brands to transform money flows into full, feature-rich accounts that foster new relationships, revenue streams, and utility, delivered in a modern, modular, compliant and cost-efficient way. In 2023, 85% of new accounts were opened with digital-only banks, and 75% of traditional banks sought capabilities beyond their legacy core systems. Meanwhile, non-financial companies and fintechs are striving to embed financial products into their customer experiences. The surge in demand for embedded financial services, coupled with a challenging regulatory environment, highlights the critical need for modernized banking and payments infrastructure, purpose-built to safely power financial innovation. Founded 23 years ago in partnership with a traditional bank, Ingo operated twelve bank branches serving the underserved Latino population in Atlanta. This history is part of Ingo’s long track record of enabling financial institutions to innovate in financial services, compliance, and risk management. Today, leveraging its Money Mobility platform, the company manages operational compliance and processes billions of dollars in money flows annually for some of the country’s largest enterprises and banks across highly regulated industries, including banking, fintech, lending, insurance, trucking, hospitality, and gaming – all enhanced by its innovative fraud risk, underwriting and guarantee services. With its acquisition of Deposits, Ingo has created a modern, modular, bank-grade, end-to-end platform that connects money in and money out through its Modern Money Stack. This stack includes a processor-agnostic side core and the tools necessary for banks to confidently meet regulatory obligations, reduce third- and fourth-party risk, and offer modern financial services to their customers. Underpinned by a bank-grade ledger, it provides banks with visibility into real-time account balances and provides control over customer onboarding workflows, issued accounts, payments orchestration, velocity and fraud controls, sanctions screening and customer relationship management. For financial services innovators, it reduces operational complexity and cost, and offers no code, low code, API, SDK, SSO and custom SaaS integrations supporting an array of account issuing, money mobility and user experience features. “With Deposits Inc.’s innovative software tools and banking infrastructure now integrated into Ingo’s platform, we are uniquely positioned to offer a vertically integrated solution that combines issuing, compliance, risk, and money mobility capabilities under one roof,” said Joseph Akintolayo, CEO of Deposits Inc. “This partnership is the next logical step in our vision of empowering institutions with the technology they need to not just manage transactions, but to create meaningful, lasting relationships with their customers.” “The future of payments is about turning transactions into relationships that impact overall economics, money flows and customer experiences. The launch of our Modern Money Stack enables banks and enterprises to manage complex, multilayered payment flows and, optionally, turn a payment into an account or wallet–powered by our proprietary money mobility capabilities–that becomes the basis for a relationship and a broader ecosystem, adding value to both the issuer and the account holder,” said Drew Edwards, CEO of Ingo. Ingo Payments’ acquisition of Deposits Inc. closed on August 30, 2024. Waller Helms Advisors acted as exclusive financial advisor to Deposits, Inc. About Ingo Payments Ingo Payments, an Ingo Money Inc. brand, enables banks, fintechs and brands to build, launch, and scale innovative financial experiences through its bank-grade, compliance-first end-to-end platform, complete with money mobility capabilities built on top of a modern money stack, that provides the foundation for account funding, mobile deposits, payouts, digital wallets, bank account creation, card issuing, PFM, and rewards solutions across a wide range of industries and use cases. By vertically integrating issuing, payment processing, and risk underwriting services, we help clients reduce third-party risk, operational complexity, and cost, while accelerating time to market. Learn more at ingopayments.com. About Deposits Inc. Deposits Inc., founded by Joseph Akintolayo in 2021, is a pioneering fintech company providing modern banking software and infrastructure. With a mission to democratize access to modern financial services, Deposits Inc. offers a suite of modular, API-driven solutions that enables banks and organizations of all sizes to rapidly build and deploy customized financial products and deliver exceptional financial experiences through its flexible, scalable technology platform. For more information, visit deposits.inc.

There’s moving money and then there’s money mobility. One represents the current state of how money moves in and out of accounts. The latter is the cornerstone of today’s announcement that money mobility platform Ingo Payments has acquired cloud-based banking platform Deposits Inc. By integrating Deposits, Ingo Payments is enhancing its platform into a cutting-edge, bank-grade system. This integration introduces a proprietary ‘money stack’—a suite of features that seamlessly connects ‘money in’ and ‘money out’ processes. With these new plug-and-play tools, both banks and non-bank issuers can effortlessly transform payments into dynamic, feature-rich accounts, unlocking new opportunities for customer engagement and revenue generation. “This was literally a missing piece in our [platform] that powers the money in and money out [of an existing account],” Ingo Payments CEO Drew Edwards told PYMNTS CEO Karen Webster in an exclusive interview. “I’ve talked many times about how an account, a bank or a wallet is a place to store money, but in today’s world it must be easily created and funded digitally. It’s also a place to spend money from and there’s risk associated with it. You have to be really good at risk management. With this combination, we get the part in the middle. That’s what Deposits has built: a modern money stack for ledgering and issuing accounts, now in the middle of the Ingo Payments money mobility platform.” For banks and corporates, the ‘money stack’ offers a powerful tool to transform simple transactions into long-term customer relationships. The Deposits software, with its low-code and no-code capabilities, cloud-based ledgering, and streamlined APIs, makes it easier than ever to manage and track transactions. This simplifies the process, allowing institutions to focus on growth and customer satisfaction without being bogged down by technical complexities. “Our platform offers a comprehensive suite of APIs and tools that make it easy to deploy powerful financial solutions,” said Joseph Akintolayo, CEO of Deposits. “When we talk about the ‘money stack,’ we’re referring to the full spectrum of capabilities—everything from account creation to compliance—that businesses need to bring their products to market quickly and effectively. Partnering with Ingo Payments, we’re paving the way for a future where financial innovation is seamless and accessible.” Edwards said the acquisition will amplify the capabilities Ingo Payments already provides to a diverse set of industries, including banking, fintech, lending, hospitality, insurance, gaming and trucking. From Great Idea to Go Live Edwards used the example of a restaurant to describe the new Ingo Payments platform capabilities. More than 90% of restaurants still pay out cash tips at the end of a worker’s shift. Consider a restaurant that would like to eliminate the friction associated with cash payouts and pay directly and instantly into a worker’s bank account. Edwards said that with the Deposits acquisition, Ingo Payments will expand the available options to include new instant-issue accounts for workers that open up new revenue streams and opportunities to make it more cost effective for the restaurant and the worker. And, with Ingo powering some of the top restaurant operating systems in market today, the cloud ledgering that will now be integrated with inbound and outbound payments, as well as new accounts and complex money flows within this multi-layer ecosystem, can be tracked seamlessly.     In this use case, digital tipping becomes the baseline for a new branded account that simplifies payouts for the restaurant operator, enabling a true cashless experience that is portable as the worker changes jobs.  Edwards emphasized, it also turns what was formerly cash in an envelope into a new relationship with that worker and an ecosystem among the restaurants that becomes the basis for monetizing payments in new ways. Future-Proofing Money Movement and Money Stacks The Ingo Payments/Deposits integration creates a proprietary and modern money stack that brings together core and non-core capabilities such as digital experiences for embedded account creation, ledgering, funding accounts, accessing accounts, risk management and compliance — as part of a money stack that exists inside of the Ingo Payments money mobility platform. The platform is “processor-agnostic, core-agnostic and open-banking-agnostic”, helping banks and corporates leverage the power of creating new feature-rich account-based relationships that meet modern consumer expectations. These include receiving money from relevant form factors, including checks, and sending money to relevant destinations including P2P, Me2Me and bill payments. Edwards and Akintolayo use the term “proprietary” to mean, “ownership,” and with that the reduction in the number of third- and fourth-party integration and partners that banks and corporates have to manage from a risk perspective .  “You can’t outsource the core responsibilities of banking,” said Drew Edwards. “Banks are ultimately accountable for compliance, whether they use third parties or not. Our approach minimizes reliance on external partners, reducing the complexity and risks associated with compliance, and allowing banks to maintain tighter control over their operations. Ingo has been helping banks successfully do this for over 20 years and this expands on that capability.” Reducing the number of “layers and players,” and especially those that Edwards and Akintolayo consider core, makes the money movement and the money storage components easier for regulators, easier for banks, easier for even FinTechs to manage and to do it right, he emphasized. The Modern ‘Core’ Edwards also noted the potential for Ingo to now solve a big problem for banks, which is modernizing legacy infrastructure. “It’s our point of view that the bank is at the center of the banking side of this,” he told Webster. “One of the things that we see changing is more and more financial institutions adopting a platform like ours for their own use, for their own direct customers, not just their fintech partnerships. Everything from account creation to managing incoming and outgoing funds can be upgraded.” Ingo Payments’ new Deposits capabilities reduce the barriers to entry for banks and corporates handling the heavy lifting of compliance, regulatory requirements, and technical aspects. The platform offers ready-to-use, customizable components that require minimal to no coding skills, tailored for financial technology applications such as receiving payments, storing money and managing disbursements. Banks and corporates can quickly launch financial services that are specific to their needs without forcing a one-size-fits-all solution. It focuses on compliance and customization, Akintolayo said, allowing businesses to translate their brand and values into the digital financial world. “This is a game-changer for traditional financial institutions,” Akintolayo emphasized. “It empowers them to leap into the digital age, meeting the modern expectations of consumers and small businesses alike. With our integrated platform, they can quickly adapt to and thrive in today’s fast-paced, digital-first economy.” Read Press Release

In the restaurant and hospitality industry, loyalty goes beyond just customer relationships—it’s about the commitment and reliability of the workers who keep operations running smoothly. As this workforce undergoes a transformation, innovations like instant digital payouts are emerging to tackle longstanding challenges such as income stability, employee turnover, and overall job satisfaction.  The recent partnership announcement on Wednesday (Aug. 28) between Kickfin and the Toast Partner Ecosystem underscores this shift. Now, Toast customers can instantly calculate tip distributions and send payments directly to employees’ preferred bank accounts, eliminating the need for cash or pay cards. This development is quickly establishing instant digital payouts as the new standard for the restaurant industry.  “What we’ve seen is that operators have been spending close to an hour each shift actually doing the calculations, dividing up the cash tip pool, trying to understand what each and every employee is making,” Justin Roberts, Co-Founder at Kickfin, told PYMNTS’ CEO Karen Webster during a conversation with Drew Edwards, CEO at Ingo Payments. “Tipping is here to stay, and it’s only becoming more complex. The expectation for instant and flexible payout options is just beginning and is trending strongly upward,” Edwards added.  Data from PYMNTS Intelligence shows that 62% of restaurant workers prefer to receive their tips on the same day, with 37% wanting them immediately, reflecting a broader industry move toward cashless transactions.  Revolutionizing Payouts in the Hospitality Industry  Traditionally, cash dominated the tipping economy, making it simple to divide earnings at the end of a shift. However, the rise of credit card transactions has complicated this process, leaving many establishments still tied to the outdated method of cash payouts. The friction and risks associated with cash handling have led operators to seek digital solutions. By integrating digital payout systems into restaurant point-of-sale (POS) platforms, operators can reduce the time spent on end-of-shift calculations from nearly an hour to just 60 seconds, Roberts noted.  “Cash is no longer naturally flowing into businesses; many are paying companies like Loomis to deliver cash by truck every day,” Edwards said, highlighting the inefficiency. He also noted that despite these changes, 90% of restaurants still pay their workers in cash, a practice that is becoming increasingly outdated.  Both Edwards and Roberts emphasized that the growing demand for instant digital payouts is not just a convenience but an essential feature for modern hospitality businesses.  “When we launched this product in partnership with Ingo, our goal was to replace cash,” Roberts said. “From the employee’s perspective, it’s about making it easy for them to be rewarded immediately after their shift.”  The rise of digital tipping is not just about speed—it’s also about managing the increasing complexity of tip distribution. In many establishments, tips are shared not only by the front-of-house staff but also by those working behind the scenes, such as cooks and dishwashers.  The ability to instantly transfer funds directly to a worker’s bank account represents a significant leap in efficiency, job satisfaction, and employee retention. Access to immediate earnings helps workers manage daily expenses, avoid high-interest payday loans, and improve their overall financial well-being.  The Future of Instant Payouts and Embedded Finance  As digital tipping gains traction, the integration of embedded finance within these platforms is expanding opportunities for managing the flow of money. Edwards explained that real-time management of fund inflows and outflows requires sophisticated controls and risk management, particularly as transaction volumes grow. Offering a variety of payout options, including card issuance, adds flexibility and convenience for both workers and operators.  “These workers are accustomed to leaving work with cash in hand, and they want immediate access to funds they can spend,” Edwards noted. This is particularly important for employees who may not have a bank account, such as teenagers, which presents additional challenges.  To address these needs, Kickfin and Ingo are exploring solutions like issuing new virtual accounts for workers. This approach not only meets the demand for alternative banking options but also provides a strategic opportunity to penetrate the quick-service restaurant sector, where tip amounts may be smaller but the demand for digital payouts remains strong.  “When you can instantly set up a new account and continuously fund it for workers in a high-turnover environment, especially when those workers rely on that income, you create the foundation for a highly profitable relationship,” Edwards said.  Expanding Beyond Restaurants  While restaurants are a primary focus, the application of digital tipping and instant payouts extends to other service industries as well. Spas, salons, and other personal service providers also depend heavily on tips, and their employees are seeking the same level of immediacy and convenience in their payments.  “Our partnership with Ingo is always focused on finding new opportunities,” Roberts said, pointing out that other industries face similar challenges to restaurants in terms of tip distribution and payout efficiency, making them ripe for expansion.