Specialized Infrastructure Wins at Scale
Shamir Karkal, co-founder and CEO of Sila, on the modern payments stack
Scale turns banking infrastructure from a convenience bundle into a chain of brittle operational bottlenecks. A startup can live with one provider that does accounts, KYC, ACH, cards, and support well enough, but a larger program cannot. Once volumes rise, failed ACH returns, card authorization edge cases, dispute workflows, and onboarding false positives each become their own operations problem, which is why bigger fintechs and banks usually end up stitching together specialized vendors instead of staying on one all in one stack.
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The market split reflects this. Marqeta emerged as a focused issuer processor around cards, while Synapse, Unit, Bond, Treasury Prime, Productfy, and others bundled broader banking functions. The bundle wins on launch speed, but focused providers tend to win on depth in one critical workflow.
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The hard part is not just features, it is failure handling. KYC means deciding who gets approved and who gets kicked to manual review. ACH means returns, reversals, and timing windows. Card issuing means authorization controls, tokenization, disputes, and network uptime. Each one becomes a full time job at higher volume.
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That is why migration patterns tend to run in one direction. Smaller fintechs start with a bundled platform because it gets them live fast. As they grow, some move to bespoke stacks with their own ledger, KYC partner, and card processor, or mix platforms like Sila for ACH and Lithic for cards.
The market is likely to keep bifurcating. Bundled BaaS platforms will keep winning new startups that need speed and compliance help, while scaled fintechs will keep pulling apart the stack and buying best in class infrastructure one layer at a time. The long term winners are likely to be the providers that become the default specialist in one painful, high volume workflow.