FinTech Infrastructure

Democratizing financial technology with a suite of API-based solutions

Overview

Leveraging APIs to develop a wave of new FinTech solutions

Financial Technology (FinTech) is rapidly replacing in-person financial services with software and apps that provide banking, lending, payments, and investment management. The global financial crisis of 2008 led to distrust in legacy banks and opened the door to new consumer-facing FinTechs. This shift in consumer behavior has led to industry demand for FinTech infrastructure, a group of key integrations and application programming interfaces (APIs) that allow companies to build FinTech products and services.

Building infrastructure in-house can be challenging as it may require integrations across multiple organizations that each offer a range of products and services that must be handled separately and on a case-by-case basis. For example, a single bank may offer savings accounts, lending services, mortgages, and credit cards with each product requiring its own technical infrastructure. Therefore, a growing number of FinTech companies are turning to FinTech infrastructure-as-a-service (IaaS) providers. IaaS providers build common infrastructure platforms for a dedicated purpose (such as banking, lending, payments, etc.) which can be used by multiple enterprises to build their respective FinTechs.

What's driving this industry?

Industry Updates

Q2 partners with Plaid to improve digital financial experiences
Sep 21
TrueLayer raises USD 130 million in funding
Sep 21
Airwallex raises USD 200 million in Series E funding
Sep 20
View all updates
Market Sizing

The US FinTech open banking API and payment infrastructure market could reach USD 15.9 - 23.5 billion by 2025

Conservative case

USD 15.9 Bn

Base case

USD 19.3 Bn

Expansion case

USD 23.5 Bn

USD billion0510152025202020212022202320242025
View details

COVID-19 IMPACT

FinTech infrastructure has benefited from a growing number of corporations developing their own FinTechs to meet the Covid-19 led digitization across industries. 

  • TrueLayer’s payment initiation services enabled by Payments API grew 600x in 2020. 

  • Roostify saw 250% YoY growth in the number of applications submitted through its platform in 2020.

  • Stripe fast-tracked support for telemedicine providers in the US to help combat the pandemic. 

  • Flutterwave’s revenue rose over 100% YoY in 2020.

Market Mapping

The financial technology (FinTech) infrastructure industry primarily consists of organizations offering banking and/or payment-related infrastructure services. Large incumbents commonly offer a mix of banking and payments infrastructure while disruptors typically specialize in a dedicated market segment of infrastructure, with only around one-in-ten startups providing services across multiple segments such as Plaid, Amount, and Modulr. The investment and financial management services segment has the smallest number of pure-play startups with a roughly 1:1 ratio compared to more diversified FinTech infrastructure providers.

Most of these disruptors in the growth and early stages with less than one-tenth in seed or pre-seed stages, indicating a somewhat mature industry.

Incumbents
Growth
Early
Seed
Pre seed
Banking services
?
Payment and subscription management
?
Fraud prevention
?
Lending-as-a-service (LaaS)
?
Investment and financial management services
?
Currencycloud
Currencycloud
Currencycloud
Currencycloud
Currencycloud
BBVA
Visa
SoFi
Goldman Sachs
Calyx
Envestnet
Fiserv
Green Dot
The Bancorp
Mastercard
Square
Plaid
Marqeta
MX
Solarisbank
Tink
Cross River
Deserve
TrueLayer
Pollinate
Form3
Deposit Solutions
Mambu
Nymbus
Railsbank
Modulr
Prime Trust
Securrency
Meniga
Omnio
Moven
Bankable
Finastra
Q2
i2c
10x Future Technologies
Lithic
Clear Bank
Ohpen
FintechOS
Unit
Yapily
Mantl
Synapse
Token
Bond
Treasury Prime
ClickSwitch
Solid
Salt Edge
Dapi
Transcard
Cleareye.ai
Orenda
Synctera
Sila
Weavr
Hydrogen
Toqio
Visa
Goldman Sachs
Fiserv
Green Dot
The Bancorp
American Express
PayPal
Mastercard
Square
Stripe
Mollie
Checkout.com
Rapyd
Plaid
Airwallex
PPRO
Flywire
Adyen
Zuora
Flutterwave
Chargebee
BlueSnap
Currencycloud
Thunes
Modulr
Dwolla
Prime Trust
ECOMMPAY
i2c
Nium
Finix Payments
Yapily
Sensibill
Lemonway
Balance
Volt
Imburse
Tilled
Gr4vy
Verituity
Orenda
Qolo
Park Place Payments
Hydrogen
Six Clovers
WhenThen
BBVA
Stripe
Amount
Socure
Prime Trust
Veriff
Alloy
Verituity
Cleareye.ai
Sila
The Bancorp
Plaid
Blend
Amount
Modulr
RooStify
Q2
Rightfoot
DigiFi
Alchemy
Faire
Floify
Pngme
Canopy Servicing
Artis
SoFi
The Bancorp
Plaid
DriveWealth
Solarisbank
Modulr
Prime Trust
Securrency
Moven
FintechOS
Alpaca
Railz
Spinwheel
Banyan
Cleareye.ai
Apex Clearing
Hydrogen

The Disruptors

Payment and card issuing infrastructure providers Stripe, Marqeta, Flywire and Zuora dominate the industry

As the highest valued venture-backed private company in the US (as of May 2021), Stripe is the largest financial technology (FinTech) infrastructure provider in terms of market value with a USD 95 billion valuation following a March 2021 USD 2 billion fundraise. Next comes publicly listed infrastructure providers, Marqeta (card issuing infrastructure provider) and payment infrastructure providers, Flywire and Zuora (payment infrastructure provider), valued at around USD 14 billion, USD 3 billion, and USD 2 billion, respectively, as of August 2021. In addition to funding, these companies also boast strong geographic reach and large enterprise clientele, relative to peers.

Pureplay payment and banking infrastructure providers are the highest funded segments in the FinTech infrastructure industry, accounting for a significant share of the highest funded companies. Moreover, lending platform, Blend, as well as the more diversified Plaid and Solaris Bank, also featured among the highest funded.

These disruptors tend to compete with peers on integrations, geographic presence, and services offered within the segment. Notably, disruptors in the banking infrastructure segment tend to benefit over incumbent banks’ infrastructure-as-a-service (IaaS) offerings as disruptors typically do not have conflicts of interest with infrastructure users, which themselves are typically banks and financial service providers.

Banking services

?

Disruptors

?
Funding in USD Millions
Marqeta
Public - Market cap USD 14.5 bn
Plaid
734
MX
450
Solarisbank
403
Tink
308
Cross River
288
Deserve
287
TrueLayer
272
10x Future Technologies
253
Pollinate
218
Form3
217
Deposit Solutions
199
Mambu
183
Nymbus
121
Railsbank
121
Lithic
115
Clear Bank
111
Ohpen
83
Modulr
79
FintechOS
76
Unit
70
Yapily
69
Prime Trust
69
Securrency
64
Mantl
62
Meniga
56
Omnio
52
Synapse
51
Token
50
Moven
47
Synctera
45
Treasury Prime
32
ClickSwitch
19
Solid
18
Bankable
Unknown
Finastra
Unknown
Transcard
Unknown
Q2
Unknown
i2c
Unknown
Watchlist
?
Bond
Sila
Weavr
Salt Edge
Dapi
Hydrogen
Cleareye.ai
Orenda
Toqio

Payment and subscription management

?

Disruptors

?
Funding in USD Millions
Flywire
Public - Market cap USD 5.0 bn
Zuora
Public - Market cap USD 2.2 bn
Stripe
2236
Mollie
928
Checkout.com
830
Rapyd
770
Plaid
734
Airwallex
702
PPRO
370
Nium
280
Adyen
266
Flutterwave
235
Chargebee
218
BlueSnap
165
Currencycloud
160
Thunes
130
Finix Payments
96
Modulr
79
Dwolla
72
Yapily
69
Prime Trust
69
Sensibill
57
Lemonway
40
Balance
31
Volt
28
Qolo
19
Imburse
17
Tilled
13
Gr4vy
12
Verituity
10
i2c
Unknown
ECOMMPAY
Unknown
Watchlist
?
Park Place Payments
Hydrogen
Orenda
Six Clovers
WhenThen

Fraud prevention

?

Disruptors

?
Funding in USD Millions
Stripe
2236
Amount
243
Socure
197
Veriff
92
Prime Trust
69
Alloy
56
Verituity
10
Watchlist
?
Sila
Cleareye.ai

Lending-as-a-service (LaaS)

?

Disruptors

?
Funding in USD Millions
Plaid
734
Blend
665
Amount
243
Modulr
79
RooStify
65
Canopy Servicing
15
Q2
Unknown
Floify
Unknown
Watchlist
?
Pngme
Artis
Rightfoot
DigiFi
Alchemy
Faire

Investment and financial management services

?

Disruptors

?
Funding in USD Millions
Plaid
734
DriveWealth
551
Solarisbank
403
Modulr
79
FintechOS
76
Alpaca
72
Prime Trust
69
Securrency
64
Moven
47
Railz
15
Spinwheel
11
Banyan
10
Watchlist
?
Hydrogen
Cleareye.ai
Apex Clearing

Marqeta

Marqeta is a card issuing platform that provides the infrastructure for enterprises to offer physical and digital payment cards through its open application programming interface (API). It entered the card-issuing market in 2010 and was the first startup to do so in around two decades in the US. In addition to its API and infrastructure, Marqeta also enables its enterprise customers to issue cards, authorize transactions, and manage payment operations. Marqeta noted that its platform is a scalable platform with built-in redundancy, failover, and 99.99% uptime. Moreover, the company has a global presence, with more than 400 employees spread across 12 countries.

Marqeta had issued around 320 million cards as of March 2021, and processed transactions worth more than USD 60 billion through its platform, in 2020. Accordingly, the company’s revenue more than doubled year-over-year (YoY) to USD 290.3 million in 2020; however, it was yet to turn profitable (operating loss of USD 47.1 million). The company expects its year-to-date revenue by September 2021 to reach USD 344-349 million.

In March 2020, upon earning the certification to process payments in 10 Asia-Pacific nations, Marqeta expanded its operations to Australia in partnership with Klarna (a buy now and pay later platform) as the first step of its Asia-Pacific expansion. The company was also chosen by Google in July 2021, to power the virtual “Google Play” balance card.

Marqeta raised an undisclosed sum as an investment from MasterCard in October 2020. Along with the investment, MasterCard intended to extend its partnership with Marqeta, which commenced in 2014, to expedite Marqeta’s international expansion, launch additional card programs, and launch new products. This investment came on the heels of a USD 150 million funding round in May 2020 at a valuation of USD 4.3 billion.

In June 2021, the company was listed on the Nasdaq and raised USD 1.2 billion through its IPO, at a valuation of USD 15.2 billion (more than thrice its valuation from a year ago). Marqeta boosted its senior management by appointing software design and engineering veteran Randy Kern as its new Chief Technology Officer (CTO) in July 2021. Kern will be in charge of scaling the engineering team and leading technological advancements.

Segment:
Banking services
Total funding:
USD 530.1 million
Competitors:
TransCard, Lithic, Railsbank, Deserve
Disruptor Funding History

Banking services:

Marqeta
Plaid
MX
Solarisbank
Tink
Cross River
Deserve
TrueLayer
10x Future Technologies
Pollinate
Form3
Deposit Solutions
Mambu
Nymbus
Railsbank
Lithic
Clear Bank
Ohpen
Modulr
FintechOS
Unit
Yapily
Prime Trust
Securrency
Mantl
Meniga
Omnio
Synapse
Token
Moven
Synctera
Treasury Prime
ClickSwitch
Solid
Bond
Sila
Weavr
Salt Edge
Dapi

Payment and subscription management:

Flywire
Zuora
Stripe
Mollie
Checkout.com
Rapyd
Plaid
Airwallex
PPRO
Nium
Adyen
Flutterwave
Chargebee
BlueSnap
Currencycloud
Thunes
Finix Payments
Modulr
Dwolla
Yapily
Prime Trust
Sensibill
Lemonway
Balance
Volt
Qolo
Imburse
Tilled
Gr4vy
Verituity
Park Place Payments

Fraud prevention:

The Incumbents

In-house development of banking and payment infrastructure

Incumbents in the financial technology (FinTech) infrastructure space are typically legacy banks, FinTechs, and payment service providers.

Large incumbent banks usually develop FinTech infrastructure in-house for their own use and as a product offering to third parties while also investing in FinTech infrastructure disruptors. Through these investments, banks gain access to modern technologies including cloud-based computing and the latest insights and analytics tools for customer banking data.

Leading global payment and card service solution providers, Visa, American Express (Amex), Mastercard, and PayPal offer payment gateways and integrations to provide full-stack and/or white-label infrastructure for enterprises. They also commonly partner with, or acquire, banking service FinTech infrastructure providers to enhance their own payment offerings as banking capabilities play a central role in enabling online payments. Through these partnerships and acquisitions, payment infrastructure users can gain financial insights on transactions and increase the speed of fund transfers and payments through banking verification tools.

Legacy FinTechs offering solutions directly to end-users typically enter the market through acquisitions and investments. However, FinTech incumbents acquiring infrastructure providers in a segment that they already operate in may lead to a conflict of interest as clients of the subsidiary may end up competing with the infrastructure provider’s parent company. For example, SoFi’s acquisition of the infrastructure provider Galileo was seen as a potential conflict as Galileo’s customers (which included SoFi) were also directly competing with SoFi in the digital lending space.

In-house development

Acquisition

Investment

Partnerships

BBVA
check
check
Visa
check
check
check
SoFi
check
Goldman Sachs
check
check
check
Calyx
check
check
check
Envestnet
check
check
Fiserv
check
check
Green Dot
check
check
The Bancorp
check
check
American Express
check
check
check
PayPal
check
check
check
check
Mastercard
check
check
check
check
Square
check
check
BBVA

BBVA is a global bank based in Spain that offers diversified financial services in over 30 countries. The company first gained exposure to the FinTech infrastructure industry by participating in the Series B funding round of the German banking-as-a-service (BaaS) platform, Solarisbank, in March 2018, as part of a broader goal of enabling digital transformation. 

In August 2019, its in-house BaaS platform, “BBVA Open Platform”, was launched out of beta, and included APIs to integrate banking services such as moving money, account origination, identity verification, and card issuances. The company claims it was the first bank in the US to offer a full suite of BaaS products. Although the platform lets users circumvent the process of obtaining a banking license, internal compliance and security checks are still required before using the infrastructure. 

Open Platform had a six-month beta period with dozens of businesses registering their interest to work with BBVA. The platform also offers a testing environment for enterprises to work through their proposal before signing up for the launch. The BBVA Open Platform is part of BBVA’s overall global movement to encourage open API platform banking usage. Other related offerings include the “BBVA API Market” in Spain, and a number of APIs rolled out in Mexico. 

Notable Investors

Funding data are powered by Crunchbase

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