Neobanks Must Become Vertical ERPs
Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs
The strategic point is that neobanks built on a checking account plus debit card are hitting the ceiling of a low margin product. The hard part is not just signing users up, it is getting payroll switched, driving enough card spend, and then earning enough interchange to support acquisition costs. The stronger model is to wrap the bank account inside software people use to run work, bill clients, manage cash, and borrow against future income.
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Chime and Dave proved a consumer neobank can win users with better design and faster paycheck access, but most revenue still comes from interchange and small fees. That leaves ARPU low, while competition pushes CAC up and keeps most neobanks below sustainable profitability.
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Vertical ERP changes the model by owning both workflow and money movement. Instead of only holding deposits, the product can charge SaaS subscription fees, take payment processing revenue, earn interchange on cards, monetize faster payouts, and layer in lending like cash advances or invoice financing.
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Examples already show the shift. Kapital used credit as the hook, then sold a finance dashboard with banking, bill pay, payroll, and expense tools, reaching a mix of about 60% lending revenue and 40% SaaS in 2023. HoneyBook moved from CRM and invoicing into checking and debit products for solopreneurs.
Going forward, the winners in neobanking are likely to look less like standalone banking apps and more like software systems for a defined customer group. The account becomes the center of a broader operating system, and the real value comes from owning the daily workflow that decides where money enters, where it sits, and how it gets spent.