These last ten years have seen disruptive tech startups begin to change the face of American banking and finance. But most of the big changes have been aimed at tiny slices of the space dominated by the biggest incumbent banks. While Square, Stripe, SoFi and Robinhood have started to change the way Americans save, borrow, and manage their money, one financial space has remained relatively glacial in its progression: credit cards.

But last year, Railsbank entered the U.S. Fintech space with a new offering: a Credit-Card-as-a-Service. The London-based global open banking platform’s service means a whole new class of disruptive Fintechs can employ the turnkey service and launch a card. In an area where metal cards and deceptive rewards schemes are considered “innovation,” the new entrants bring them a promise that American credit cards can finally be valuable tools for American consumers.

As Unifimoney planned its credit card, we knew that Railsbank would be the ideal partner. So, we signed on to be its first U.S. customer and its first Credit-Card-as-a-Service customer. We gave Railsbank CEO and co-founder Nigel Verdon a call to learn more about how Railsbank hopes to spur innovation in the U.S. credit card space and why its international reach makes the choice for Fintechs “with ambition to grow.” This is what he had to say:

What spurred Railsbank to enter the U.S. Fintech space? 

So, it's not as if we were all super clever and super strategic. It all started with Dov Marmor, who now runs North America for us as Chief Operating Officer. He phoned me up and asked me for a job reference. And I said, 'I won't give a job reference; I'll give you a job. Can you figure out what we need to do to enter the U.S. market?' And he went out and did it. 

There were a couple of intriguing macro events as well. Some of the competition in America was bought — Galileo was acquired by SoFi which meant a lot of lending teams won't go anywhere near them now. And also SynapseFI was having its own issues. So it seemed to be a space that we could enter.

We identified that there was an underlying demand for Credit-Card-as-a-Service: a turnkey service solution that let people launch a card in six to eight weeks, as opposed to fitting all of spaghetti together themselves and maybe taking years. So, we went out and built our own unique Credit-Card-as-a-Service product. This allowed us to enter the North American market with a differentiated proposition. And now we'll build out the rest of our products for our U.S. customers.

Your Credit-Card-as-a-Service offering was especially fascinating to learn about. What could it mean to the payments space in the United States if the barrier to entry is lowered for disruptors?

There still is some barrier to entry, which I think is a good thing. You have to be super careful, especially in credit: you've got to work with good, responsible companies. But good doesn't necessarily mean big — it just means high-quality, well-funded businesses that know what they're doing and have a high likelihood of success. 

But before we arrived, we saw that there was an unnecessary barrier to entry in the American payment space as well. What we observed was that everybody had made it incredibly complex — they'd have pricing structures that are ten pages deep, and like a shell game, with more and more hidden costs. So we just said, let's make it turnkey. Let's get pricing down to five lines of pricing that show the customer how they can make money, and then they can decide if they want to use us. And that's it. It's all about transparency, simplification, and just taking the stress away. 

We did the same with other products in the UK, in Europe and in Southeast Asia. We distilled Banking-as-a-Service down to four simple things: issue an account, receive money, send money and collect money. We worry about all the rest. Is it UK Faster Payments, is it Swift, or is it ACH? Those are all things we take care of on the back end.

How does the international reach of Railsbank give it an advantage over other Banking-as-a-Service providers?

I'll use the example of Monzo. When they launched they spent about 1.8 million bucks to build all the infrastructure and then started getting customers in about 18 months. Then they had to do the same thing over again when they went to the U.S., and again and again in Europe and in other regions. With us, if you integrate once then it's just a six-week process to light up a new country. The APIs are the same and the experience is the same. It's just different contracting, some different localization standards, KYC, identity and compliance. But that's it. 

What we designed at Railsbank is a global experience with localized rails. We've taken all the pain out of trying to understand the local market. You get one experience and we do a localization for you. 

For example, we have one customer Wagestream, which launched with us in the UK because they saw we could deliver a frictionless deployment into the payroll process. And now, we're launching them in Australia. People with ambition to grow can grow on us. 

Given your global view on Fintech, I’d be fascinated to know how you see the next five years in American Fintech looking. What interesting developments from Asia and Europe might make their way to the U.S. market and what new tech or offerings could lead to a tangible change for the American consumer?

There's an awful lot of entrenched friction, so I don't think there will be much of a change for the U.S. consumer. For example, the real innovations are coming from apps in Asia like WeChat and Grab. The reason apps like those have been able to grow so fast is because there was no intrinsic infrastructure. There was no acquiring network in China, so WeChat built it with software. 

Now, in the U.S., all acquiring networks and payment networks are all hardwired, with a huge amount of vested interest: Visa, MasterCard, Bank of America, Merrill Lynch, Citibank, and more. So, it's going to be quite difficult to dislodge much of that and bring along some of the innovations introduced by Chinese companies, which were operating on a greenfield site. 

In the U.S., the next innovation that will evolve the payment space is going to be the adoption of instant payments, like UK Faster Payments. That will be a massive change for the U.S. in everything from bill payments, checking, risk, settlement and more. But the U.S. needs to be aware that, early on, fraud will go through the roof. Wherever there's been instant payments, fraud has been colossal. It's now under control in the UK, but Hong Kong had to pull it because of fraud after the first launch. 

The second one, which, again, there's a lot of vested interest against, is getting a National E-Money charter. This is more a political than a technological hurdle, but if somebody cracks that on the U.S. regulatory side, that will be an amazing step forward and will open up the U.S. market considerably. It would be a massive change for the U.S. consumer, but a change like that with a system consisting of 52 state regulatory infrastructures would be a difficult sell!