Payments

Inside Moov’s two-sided approach to partnerships

The startup offers payment tools for non-financial brands, but it’s able to strengthen its offerings by allowing a host of fintech companies to contribute to its open-source libraries.

As embedded finance takes off, Moov is focusing on building a payments toolset that other companies can tap into without having to “learn all of the stuff,” says co-founder and CEO Wade Arnold.

The company focuses on helping developers add capabilities to accept, store and disburse money. 

“Payments and stored value is a feature of tech companies now. It’s not just for payments companies anymore,” says Arnold. “We saw this explosion of optionality of how people want to be paid in that triangle of risk, speed and fees.”

Moov, which has so far raised $33 million, began in 2017 as an open-source platform allowing companies to “deploy basic financial service solutions to seamlessly receive funds, store value and remit payments.” 

Many known fintech companies, including HMBradley, Atomic, Bank, Novo, and others contribute to its open-source libraries, and the company’s open-source Slack community has grown to more than 2,000 members. Over the past year, Moov has provided its payments-as-a-service offering to other (non-financial) companies that are looking to add payments functions within their platforms. The program is currently in beta.

“We’re 100% focused on servicing the software engineer and the non-financial services platforms, and right now, the typical use cases may be the yoga studio as a service, or the pet daycare as a service or law office as a service,” he says.

FinLedger spoke with Arnold about the company’s business model and client strategy. Answers have been edited for clarity.

At a high level, what sort of user experience did you seek to create when you established Moov?

We saw things like the Starbucks card, and Uber money and Cash App, and said, “Hey, these things are actually very similar in technology and architecture standpoint, and they provided an amazing user experience. Let’s build a platform.” 

Aren’t a lot of players doing this? How does Moov differentiate?

We’ve taken business from Stripe, so in that way, we’re competitive. But Stripe is the world’s best at accepting anonymous e-commerce checkout globally. 

[For example, with one customer] the money came into Stripe, and then they needed to store it. So then the money “ACH’d” out of Stripe to their bank, and then they needed to disburse it, so then the money went [through] Forte or Marqeta.

If you think about that timeline, it’s about a week and a half that it took to settle the money into Stripe, give it to their bank and forward it off through these other ways of disbursing it. If you’re building a two-sided marketplace like Uber of X or DoorDash of Y, bringing money in and storing it for a short period of time, and disbursing it is a complex funds flow that normally requires three vendors. There’s going to be a lot more of these shared economy platforms, so we thought “let’s go build a solution specifically for that.”

Got it. So one of your differentiators is offering a full payment flow of send, receive, disburse and hold capabilities. I understand that you’re working with a handful of customers in beta right now. What types of businesses are they?

One is Flashtract, and their software does loan disbursements for commercial construction companies. Others include [e-wallet and e-remittance provider] Remitap, [bill payment platform] SimplyPay, as well as real estate back-office and political donation platforms.

Moving to your open-source platform, what kinds of companies are using it and contributing to it?

Thousands of companies are using different libraries. We’ve had to test cases [and] you have  companies ranging from startups to Bank of America to PayPal using those libraries in production. 

I understand that you also have some well-known fintechs – like Bank Novo and HMBradley – using the open-source platform. What added value does that offer?

Companies like you just mentioned are contributing to the open-source [libraries]. They do not pay us for that. But they are adding their use cases and their edge cases back to the libraries. And then we’re going after the non-HMBradley [companies]. HMBradley is rebuilding their entire bank stack internally using Moov for some of the critical pieces, but most software developers don’t want to do that. They just want a more turnkey solution.

If your open-source partners don’t pay you, how do you make money?

We charge a platform fee that gives you X number of users that have KYC (know your customer) KYB (know your business) and X number of transactions on top of that.

What’s next for Moov?

Our big change over the next six months is we have committed to doing merchant acquiring and we’ve become a PayFac (payment facilitator) allowing card acceptance and card tokenization. It’s a feature but an important one for us, and going into next year, we’ll be able to issue directly on top of that wallet, so adding cards is the big next phase for us.

What keeps you up at night?

I would say the thing that worries me the most is what Venmo and Square are doing. There [are] massive closed-loop networks that have critical scale. We’re very dependent on open payment networks like Visa, Mastercard, The Clearing House and FedLine. [If transactions] stay inside of their closed-loop network, it’s not possible for us to compete. 

Seeing Venmo and PayPal really double down on creating that super app to me is the most scary thing that’s happening inside of payments right now.

So you’re suggesting the growth of crypto is not a concern for you?

We love crypto! That’s optionality. The more options that users have, the more important it is for a company like Moov to exist.

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