Plaid and Railsbank enter partnership

Open Banking platform Plaid and banking-as-a-service platform Railsbank have announced a strategic partnership that will help companies “embed finance into their customer journey”. 

Through the partnership, Railsbank customers in the UK will gain access to Plaid’s payment initiation API to accept instant bank payments directly within their app or website, allowing instant account-to-account transfers to take place and providing a low-cost alternative to cards. 

Nigel Verdon, co-founder and CEO of Railsbank, said: “This partnership is all about making it easier for any company, or brand, to embed finance into their customer journey.  

“We are creating one of the major building blocks that makes embedded finance a viable proposition for virtually every company, or brand, in business today. We are delighted to be working together with Plaid on what is a huge step forward.” 

Railsbank customer ikigai, a challenger bank, will use payment initiation as a “key function” of its investment management offering, helping to speed up transfers from a user’s bank account to their investment account. 

Maurizio Kaiser, co-founder of ikigai, said: “The new partnership gives ikigai access to a best-in-class payment initiation solution to streamline our account funding capabilities, and a seamless experience for our clients.” 

According to Plaid, which raised $425m in a Series D funding round in April, a recent survey by Lightyear Capital forecast that embedded finance will grow from £16 billion in 2020 to £164 billion in revenue in 2025. 

Keith Grose, head of international at Plaid, added: “The true scope of the embedded finance opportunity is just starting to take shape, but it is already clear that Open Banking payments will emerge in many more places in the years to come.  

“As fintech-powered payments and digital wallets gain prevalence, more companies will seek to leverage the power of APIs through partnerships like Railsbank and Plaid to make it easier to move money online.” 

Railsbank recently hired ex-Currencycloud CEO John Hammond as chief commercial officer.