Are companies like Synapse, Marqeta, Productfy, Unit, and Bond offering banking-as-a-service or services primarily as issuer processors?

Good question. Marqeta is definitely a processor. They are basically the company that initially partnered with a bank. They built card rails. They integrated with Visa and MasterCard, a bunch of other networks. And they're basically taking the role of processor, but they're making it easier for other FinTechs or non FinTechs to take a card to market. So in some ways they are a processor, but they're also a banking-as-a-service provider because they're making it easier versus your traditional processors in the banking space that may not necessarily have easy to use integration layers on top. 

So in Marqeta's case, the notion of a banking-as-a-service is that you're essentially making it or trying to make it easier for non-bank companies to launch financial products. If you're a processor and you have a layer on top and you're between them and the bank, you are a banking-as-a-service provider. In Marqeta's case, they happened to be a processor, making it easier to get cards to market.

And that's essentially the first model of banking-as-a-service, which is do one thing easily and get out to market. If you actually look at Dwolla, Dwolla is also a sort of a 1.0 banking-as-a-service provider, they have the bank and they make ACH easier. Because essentially you don't have to go to a bank partner to do ACH. You can go to Dwolla and they're very easy to integrate widgets and modules and things like that. So any layer where it's an abstraction layer, is essentially banking-as-a-service.

 How do they play their roles within banking-as-a-service, designate them as processors? In Dwolla's case, I believe they're a payment processor. And then if you want them to start your e-commerce company and build on top of Dwolla, you're using Dwolla essentially as a payment processor, but you're basically not a payment processor, you're just basically an e-commerce or a FinTech.

So banking-as-a-service is a higher layer here. Within that, the goal of banking-as-a-service is making it easier. It's really hard today to talk to a bank because banks are hard to talk to. They don't have good technology and they have a bunch of compliance and program requirements. If you are starting here and you want to build a FinTech site for making it easier for men and women, between 20 and 30 years old in New York to save money with their credit cards, you focus on that. You partner with banking-as-a-service, they plug into the bank. So you don't have to basically figure out all the bank stuff and you can focus on your business.

Now, if you need a processor, because you want to issue or launch a debit card, you need Marqeta. If you want to handle payments, you need Dwolla, right? So they each have their different roles within the banking-as-a-service, but essentially you would go to them for those certain things.

Now the 2.0 banking-as-a-service model is now like Unit, Synapse, Productfy, which try to be all of them. We will basically be a processor, payment company, bank accounts, even lending, they'll try to aggregate all of them into a single platform. That's the 2.0 version, which is the 1.0 version is Marqeta, Dwolla doing one thing pretty well. The 2.0 version is everyone saying, "Well, if you come to me and you're trying to build your FinTech app, you need payments, you need bank accounts, you need debit cards, you might even need rewards for crypto currency." Whatever that is, I'll give you this layer here, and then you focus on what you want to build. And we'll basically just aggregate everything for you into a bunch of APIs that you guys can basically use. So that's the 2.0 model, we are now building on top of the banks. We're also plugged into Marqeta so that you don't have to go to Marqeta and Dwolla and Visa, MasterCard, whatever. And so that's our layer, which is, we are the 2.0 layer, which essentially all in one, if you will.