Community banks and credit unions strive to build solid relationships with the consumers and small businesses that form the bulk of their accountholder base, but almost every community bank and credit union has a small collection of larger businesses that provide critical revenue and receive a lot of attention from branch staff, lending officers, and senior managers. Chances are, when you read that last sentence, one or more of your organization’s key commercial accounts came to mind. You know these businesses because they are your most profitable relationships and the provider of a meaningful percentage of your business. They are your MVPs (most valuable patrons).Even though these businesses and organizations may only be local or regional, they often go head to head with nationally known competitors in the fight for market share. This competition with much larger entities drives service needs that often stretch your organization’s people and products. What’s more, they often push you technologically, especially when it comes to payments.
For instance, these MVPs – some of which might be locally-based fintechs or technology startups –may have a mobile app that needs embedded payment capabilities customers can use to pay for services. They almost certainly want to automatically debit monthly fees/dues/bills from their customers’ accounts. Their back-office staff is probably already remotely depositing the checks they receive, and they may also want their account reps or field agents to accept checks or cards directly through their mobile devices during face-to-face encounters with customers.
The MVPs may have asked you to help them enable their website to accept payments, display bill amounts and due dates, and generate notices before bills are due if they haven’t already secured these services from a provider like PayPal or Square. Your savvy customers are looking for more efficient ways to collect payments from customers and make payments to suppliers, including leveraging real-time payment solutions like Zelle® and RTP® or the soon-to-be-rolled-out FedNow® service. And they are almost certain to demand that these services leverage an easy integration process that lets them tie directly into their company’s internal business systems so they can reduce operational costs and streamline payment processing. They would also appreciate live data feeds and historical reporting tools that help them optimize platform usage and boost their bottom line.
In short, these MVPs want payments as a service (PaaS) and they want you to provide it. And if you can’t, they’ll find a bank or credit union that can.
Here’s some good news: Jack HenrySM is utilizing its broad collection of payments products as the basis for a comprehensive PaaS offering that makes it easier for banks and credit unions to provide embedded payments capabilities for their MVPs. These services are already in use today by a host of nationwide fintechs, businesses, and organizations. This PaaS solution will include products and functionality from Jack Henry Payments groups like Enterprise Payment Solutions™ (EPS), iPay Solutions™, JHA PayCenter™, and JHA Card Processing Solutions™ (CPS). It will include deep developer resources such as documentation, use cases, and sample code, with active plans for a sandbox environment and even the option to generate fully formed, re-usable code modules. The PaaS suite will also include SmartSight®, Jack Henry’s business intelligence tool for driving actionable insights through analysis of historical payments data. (SmartSight is being expanded to include data from all Jack Henry payments products.)
In short, PaaS is a powerful collection of payment capabilities that will serve your organization, your largest and best business customers, and fintech clients so you can increase stickiness and drive new revenue opportunities for your most important relationships.
It’s no secret that fintechs and big tech companies have been encroaching on the banking space for quite some time. Public perception may be nudging businesses to engage large fintech providers – as opposed to financial institutions – to meet their payments needs. In a world where the protective walls around the banking industry are collapsing, community banks and credit unions will need solutions like PaaS to remain competitive.
While we may not have used the phrase “payments as a service” in the past, most of Jack Henry’s PaaS functionality is already available today. Early adopter banks and credit unions are leveraging these API-based payment components to help win and keep their largest and most aggressive tech-savvy depositors. The digital services battle isn’t just against pure technology giants – your organization may already be losing ground to local competitors.
Jack Henry will continue working to provide the technology solutions financial institutions need to maintain and grow their market share. More information about PaaS will become available over the next few months. Banks and credit unions that want to keep pace with their competitors in today’s constantly evolving financial services market should reach out to their account representative or sales associate to find out how PaaS can help secure their most important clients.