BankingStripe Treasury launch shows there are now “genuine alternatives” to traditional banking

Stripe Treasury launch shows there are now “genuine alternatives” to traditional banking

The news of leading banks partnering with Stripe Treasury points to a seismic shift in banking, say market participants.

Stripe unveiled Stripe Treasury on December 3 as a means of offering financial services to leading ecommerce merchants.

Stripe Treasury will work with Citigroup, Goldman Sachs, Barclays and other financial institutions to offer debit cards, bank accounts and other products to the online merchants and vendors who rely on Stripe’s payments processing platform.

Myles Stephenson, CEO of Modulr finance, said that banking is in the midst of a transition period, with fintech offering a genuine alternative to traditional banks: “Five or ten years ago, if you’d have suggested you wanted to use server desktop computing rather than the cloud, people would have been critical, whereas today the opposite is true, with almost everyone using cloud computing. We can draw similar parallels with banking. If you were to ask treasurers and CFOs outside of the fintech bubble, about 99 percent of people would say they would use a traditional bank, but that’s starting to change” he said.

“It’s not about saying banks are bad, it’s about acknowledging that there’s a transition in the market and that there are different ways of doing things. What Stripe are doing is good validation that an alternative is available and that it’s very plausible.”

Stephenson added that there could be a rise in similar functions internationally as countries push for changes to regulations: “There are further opportunities in Europe, but not yet the US. The way they’ve got to execute it in the US is partnering with banks, what we’ve managed to do here is slightly different because the regulatory environment has changed. [In the UK] we don’t need to partner directly with a bank because we have the infrastructure internally, through having direct access to the Bank of England. This shows that alternatives can exist in true competition without banks having to work with them.”

Elsewhere, UK-headquartered TransferWise recently announced that they have been granted a license to access Australia’s real time payment system by the country’s Prudential Regulatory Authority.

TransferWise was the first non-bank to get access to the UK’s faster payments system, including a settlement account with the Bank of England.

The company is also looking to become one of the first non-banks to connects to the Singapore Fast network, after the country’s central bank confirmed it would open up direct access to the nation’s real-time payment plumbing to non-bank financial institutions (NFIs).

Adam Moelis, CEO and founder of Yotta Savings, said that a shift away from traditional banking could be beneficial for businesses: “With the rise of banking as a service platforms, many non-financial companies are integrating banking into their products that never could have before. We’ll also see a lot of niche financial products that target a very specific group of people,” he said.

“Traditional banks have a lot more competition now, and I think we’ll continue to see a major shift away from traditional banks towards digital options.”

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