When did payment processing become Wall Street? Is this the term for all finance now?
These start-ups are challenging stodgy banks. By and large, this is and has been good. But unless the jargon has completely changed over the last twenty years, someone helping retail traders buy stock or processing Salesforce payments isn't on Wall Street.
They're at the same institution. But their work, risk profile and compensation are vastly different. Last I checked, Wall Street is doing fine amidst this disruption, what with cryptocurrencies, SPACs and booming markets public and private.
When it started affecting writers’ incomes as a result of the income being based on clicks. Making something “controversial” by mislabeling it or misconstruing it is a simple, but unfortunately successful strategy (in the short term at least).
> this is the broadest definition of Wall Street I have read
It's also insidious. Silicon Valley and Wall Street are doing fine. Expanding the definition of the latter to include mid-level loan managers is...suspiciously convenient.
> When did payment processing become Wall Street? Is this the term for all finance now?
Haha, for software developers the experience with recruiters/hiring managers in Tech sometimes goes like this:
"Oh, you worked on front office trading algorithms? So, you must be perfect fit for this payment processing group. Here, let us set up an interview where the team will assume you have deep expertise in payment processing."
Well with the current Gamestop craze that is happening it probably helps to generate clicks to title something "enemies of wallstreet" as false a title as it may be.
Is it odd that the company mentioned in the first paragraph - Simple - seems to be a contrary example? It sold to BBVA, and is now being shut down. Azlo (also owned by BBVA) is shutting down. The bank we used before Azlo (Seed.co) shut down.
Maybe startups are winning the payments space, but it sure seems like big banks are winning "the bank space".
I'm sure people on Wall Street loving the killing they can make via the SPACs, IPOs, PFOF, etc. of these companies. If they happen to work somewhere that also offers retail banking services and it costs a few midwestern loan managers their jobs, I doubt they care.
The author decided that it would be cool if there was a way to portray some irrational exuberance, and boom - here's your article. The main point is that back in the day finance apps struggled more than they should have and now they are having it too easy. That may or may not be true, but the selective case studies certainly make it hard to take every word at face value.
Let's examine the 2009 case study - Simple struggled to raise money, whereas supposedly it should have been a walk in the park by today's standards. Nevermind that they shut down recently.
And to illustrate today's standards, the author is bringing up Step, which was able to raise at whatever valuation it wanted once it hit the list of top downloaded finance apps. So first of all - Simple and Step are not an apples to apples comparison, because Simple was not a top downloaded finance app in 2009.
And then let's address the point of Step's valuation - someone cold emailing you to take their money at whatever valuation is in reality just trying to get a meeting. If you respond with a ridiculous figure, you won't hear back from them again. Sure, they are clearly not valuation sensitive, but also not necessarily total idiots. It actually sounds more like a brilliant move to me - if you were allowed to invest $5m in each app that hit the list of top downloaded finance apps, would you achieve a good IRR? Remember, all it takes is one unicorn to return an entire fund.
Would it be really that hard to dig into some unit economics of venture funds and try to provide some context for what's happening in the market rather than just ride the wave of "check it out, another investor doing crazy shit!"?
I'm sure a few of the readers here recall when most banks guaranteed 5-1/4% annual interest on savings accounts. Then the Savings and Loan debacle, then no interest any more. Banks screw up, who gets screwed?
Great article. I completely agree with you that Traditional FIs are "ripe for a tech makeover".
It's hard to say if Fintech will outright replace traditional financial institutions but what we know for sure is that banking, as we know it, is going to change drastically. I feel that the global pandemic has pushed technology adoption and banking customers are now more attuned with online banking needs. This will drive the need for third-party APIs.
Big Finance will have to reassess their legacy systems and replace them with solutions that drive speed and agility - something that third party APIs can help bring to the table.
The team at Railz have been working on such a solution. We are a data-as-a-service API for accounting data. We help financial institutions and fintechs by providing them quick, low cost, and direct access to their customers' accounting software and data via a single API. Feel free to check our website to know what we’ve been up to!
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