FinTech news in digital services category

The margins might be thin on any digital payment — one reason why even a company that looks like it’s growing and doing a lot of business might still fail: The numbers need to be huge to work out in its profitable favor — but this is why so many payments companies work on vast scale, and why building in a number of extra valued-added services in hopes of them getting picked up by customers (and customers’ customers), as Stripe is doing here, is smart business, one way that it hopes to sustain itself for the long (and likely public) haul. Stripe has been making a number of acquisitions to bring in extra functionality into its platform to close up some of the gaps — for example almost exactly a year ago it acquired TaxJar to help automatically calculate sales tax and provide related tools to its customers — but it looks like Financial Connections was built in-house, but powered by MX and Finicity (as pointed out by Mary Ann here). Stripe’s selling point for these tools, beyond a more seamless integration with its other products, is that it helps its customers make more transactions. Details like these can in turn be used to help underwrite risk for loans; to track spending patterns and automatically pay bills; and more — in other words, financial data that’s useful or necessary to run financial transactions over other Stripe services like Stripe Connect, ACH payments or Stripe Capital-powered loans. Just yesterday, I wrote about an interesting startup called Kevin (okay, kevin.) that’s building a whole new set of payment rails and APIs for account-to-account payments that link straight into bank accounts, bypassing card rails and legacy account-to-account payment methods that are harder to implement.