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Highlights

 

Welcome to another episode of Category Visionaries, the show that explores the future of tech with innovative B2B founders. In today’s episode, we’re speaking with Shamir Karkal, Co-Founder and CSO of Sila, a Money API platform that has raised over $20 million in funding.

Key topics discussed in this episode:

  • Shamir’s journey from co-founding one of the first neobanks, Simple, in 2009 to starting Sila in 2018 with the mission of making it easier for innovators to build and ship financial applications
  • The challenges of building a neobank in the early days of fintech, including finding bank partners, vendors, and building the necessary technology infrastructure
  • The current state of challenger banks and neobanks, with Shamir noting their strength in serving narrow sets of customer needs but limitations in breadth of functionality compared to traditional banks
  • A brief history of the US payment system, from the early debates over a central bank and the gold standard to the creation of the Federal Reserve in 1913 and the development of various payment networks like cash, cards, checks, ACH, and Fedwire
  • Sila’s core product, a RESTful HTTP API platform that enables customers to build financial applications with features like KYC/KYB, digital wallets, virtual bank accounts, and ACH payments
  • The inner workings of the ACH system, its limitations as a non-real-time payment network, and the upcoming launch of the Fed’s real-time payment system, FedNow, in 2023
  • Sila’s growth, with close to 100 customers, 50+ live on the platform, and 5-6x year-over-year transaction growth
  • The importance of staying focused on product, customers, and the mission amidst the noise and cyclical nature of the fintech industry
  • The three-year vision for Sila, which includes supporting more payment systems like FedNow and RTP while continuing to improve and streamline the customer experience for existing payment rails

Actionable
Takeaways

Identify and Address Infrastructure Gaps:

Look for opportunities to build platforms and tools that simplify and streamline the process of developing financial applications, addressing the pain points faced by innovators in navigating complex payment systems and regulatory requirements.

Focus on Narrow Use Cases and Expand Over Time:

When building fintech products, prioritize serving specific customer needs and use cases exceptionally well, rather than trying to match the breadth of functionality offered by traditional players from the outset. Expand your feature set gradually based on customer demand and strategic priorities.

Stay Informed About Payment System Developments:

Keep a close eye on the evolving payments landscape, including the launch of new real-time payment networks like FedNow, and adapt your product roadmap to support these systems as they gain adoption.

Persevere Through Industry Cycles:

Recognize that the fintech industry, like many others, is subject to hype cycles and market fluctuations. Stay focused on building and shipping products that solve real customer problems, and trust that success will come with time and consistent effort.

Prioritize Customer Experience in Payments:

When building payment functionality into your product, pay close attention to edge cases and error scenarios, striving to make it as easy as possible for customers to troubleshoot and resolve issues. A smooth payment experience is critical to customer satisfaction and trust.

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