Lithic

RegTech is a hot topic in the fintech space; which RegTech startups will win? On the latest episode of Fintech Layer Cake, our host, Reginald (Reggie) Young, sat down with Faraz Rana, founder and CEO of Affinity. They discuss Faraz’s journey from M&A lawyer to founder of a RegTech startup, the nuances of the BNPL (Buy Now Pay Later) space, the importance of compliance in Fintech, and the evolution of the regulatory and compliance landscape. He explains that, as the VC market slows down and there is greater focus on bottom lines and margins, many companies are turning to RegTech to remove inefficiencies from compliance and operations. Link to the full episode in the comments.

According to recent industry reports, companies spend over $1 trillion annually using commercial cards. Commercial card programs have become a critical tool for companies looking to streamline their operations, manage expenses, and gain valuable insights into their spending patterns. However, in today’s competitive market, program owners require more than just basic transaction data to manage their finances effectively. Equipped only with basic data about their card transactions, companies are left with a fragmented view of their expenses, which makes it challenging to manage costs effectively. Our latest release aims to change that. We are pleased to announce Lithic’s latest advancement in commercial payment solutions: support for Level 2 (L2) and Level 3 (L3) enhanced commercial data. Lithic’s L2 and L3 data support offers a comprehensive solution that captures detailed information on each transaction, providing businesses with the insights they need to optimize their spending and streamline their financial operations. Read our latest blog post to learn what data points L2 and L3 data covers, the value of enhanced commercial data, the key features of Lithic’s L2 and L3 data support, and how you can get started. Link in the comments.

The landscape for launching payment programs is not what it used to be. But the importance of a strong bank partnership hasn’t changed. In fact, it’s become an even more crucial component of any successful payment program. Between higher capital costs and increased regulatory scrutiny, banks are more selective about who they partner with. Due diligence processes have become more difficult to navigate, and banks are increasingly committed to setting the right partners up for success. Asked about the current state of bank partnerships, here’s what Jason Hass, Head of Business Development at First Electronic Bank, had to say: “The landscape for launching card programs has evolved significantly over the past 24 months, with higher capital costs and increased regulatory scrutiny reshaping the process. Partnering with a sponsor bank in this environment involves longer diligence timelines and more comprehensive evaluations. At First Electronic Bank, we work closely with our fintech partners throughout this phase, helping to update and craft policies and procedures, providing expert guidance, and leveraging our subject matter expertise to support a successful launch. We believe that the success and compliance of our partners are essential to our own success, and we are committed to ensuring that your program thrives in this complex landscape.” To learn what else banks are looking for in fintech partners, and how you can get started on going direct, download our latest guide, “How to Go Direct to a Sponsor Bank.” Link in the comments.

In case you missed it, on a previous episode of the Fintech Layer Cake podcast, we sat down with Rodrigo Suarez of Piermont Bank to chat about building successful relationships between fintechs and bank partners. The total time expected for fintechs to reach a term sheet usually takes an average of two to three months. With the right preparation, it can take less than a month. Rodrigo shares insights about how bank sponsors work with fintech companies, how these banks view the fintech landscape, and how fintechs can set themselves up for success. Get the link to the episode in the comments.

We recently celebrated our 10th year of operations, and couldn’t be more proud of the team and partners that have helped us get here. But our story goes back even further than the Lithic name. In 2014, we built Privacy.com to create a safe and easy way for consumers to pay online. We had an innovative idea but needed to work with a legacy card-issuing processor to launch. It took us over a year, and after we were up and running, on-going operations were a daily struggle. We believed there had to be a better way. So we built Lithic, the issuing and processing infrastructure we always wanted. With developer-friendly, modern, well-documented APIs, insanely fast speed-to-market, and flawless reconciliation, it’s purpose-built to give card issuers extremely high levels of observability, control, and flexibility over their card programs. Today, we help some of the world’s fastest-growing digital banks, fintech companies, and software companies in the world process billions annually. Read the blog post for the full story of how we got where we are today. Link in the comments.

It’s no secret that partnerships take work. Like any strong relationship, both parties need to keep each other accountable and advocate for each other's best interests. For fintechs working with sponsor banks, this advocacy often comes in the form of audits, certifications, reviews, scrutiny, and increased oversight. While these measures can feel like obstacles that slow down fintechs’ operations, they’re in everyone’s best interest. In our latest guide, we spoke with several sponsor banks about the intricacies of bank partnerships. Sarah Grotta, Deputy Chief Financial Officer of FinWise Bank, shares her perspective: “I advise fintechs that a sponsor bank is your partner, not an annoying business preventer. A good sponsor bank will help keep a fintech out of regulatory hot water that can damage the fintech’s ability to do business, plus a bank partner can be a source of new business. When considering your options for a bank partner, come prepared with questions about their approach to regulatory oversight. Not only will they respect your interest in running a compliant program, but you will have the opportunity to assess how well their approach fits with your business practices.” The benefits of a strong bank partnership cannot be understated. Read the full guide to learn what sponsor banks are looking for in fintech partners and how companies can get started. Link in the comments.

Did you know that our co-founders have been friends since high school? To celebrate 10 years of building Lithic together, we recently launched a special episode of the Fintech Layer Cake podcast featuring all three of them. In it, they discuss some of the biggest challenges they encountered as they scaled Lithic into one of the largest issuer processors in the industry. Bo Jiang shares how building a bespoke card program helped shape Lithic’s approach into the modular offering it’s known for today. Listen to the full episode for more challenges, learnings, and insights from three of the most innovative minds in fintech. Link in the comments.

We’re excited to announce the release of our latest guide: How to Go Direct to a Sponsor Bank. Driven by decades of communal experience and discussions with dozens of sponsor banks, we break down everything fintechs need to know about establishing direct banking partnerships: when to consider this path, what sponsor banks look for in fintech partners, best practices, and more. Link in the comments.

It’s Lithic’s 10-year anniversary! To celebrate a decade of fintech innovation, Reginald (Reggie) Young, the host of Fintech Layer Cake, rounded up Lithic's co-founders Bo Jiang, Jason Kruse, and David Nichols for a special anniversary episode. The founders dive into the transformative journey from their early days at Privacy.com to becoming a leading name in payments infrastructure. They share behind-the-scenes challenges, pivotal decisions, and lessons learned while reshaping the fintech landscape. Whether you're a fintech enthusiast or an industry professional, this episode offers a unique glimpse into the minds of those who are redefining financial technology. Link to the full episode in the comments.

Tokenization has become the industry standard for card programs of all shapes and sizes. It helps companies comply with PCI standards, limit exposure to potential data leaks, store payment details for faster payment experiences, and more. But the management of the tokens can be manual and cumbersome.  Our latest release aims to change that. Lithic’s Token Management API allows you to easily manage the lifecycle of card tokenization. It can be used with digital wallets and merchant tokens and on Visa and Mastercard. In our latest blog post, we cover the benefits of this API, how it works, and how you can get started. Link in the comments.