Rellevate, a US challenger banking service founded by a Western Union alum, has selected Technisys to provide its cloud-based core digital banking platform.
This is understood to be the first known win for Technisys in the US. The Miami-based vendor has takers of its flagship Cyberbank Core and Cyberbank Digital software primarily in Latin America, the Caribbean and, as of late, in Canada (ATB Brightside, ATB Financial’s new digital bank).
Designed for US citizens who earn between $10 and $25 an hour and live paycheck to paycheck, Rellevate will largely serve its users through their employers. Planning to go live by the end of March 2020, it will offer a Visa debit card, payday advances, bill pay and international payments services all tied up in one package sold through employers.
As Rellevate doesn’t have its own banking licence, it has partnered with an unnamed domestic bank that will hold its funds in federally insured accounts.
“Banks now need a flexible, open platform that can work within ecosystems where there is more than one vendor building all the capabilities,” says Technisys founder German Pugliese Bassi, who explains the core provider’s system is flexible enough to handle changes “in days or weeks”.
CEO and chairman of Rellevate Stewart Stockdale was once Western Union’s director for global consumer financial services, running the money transfer and payments businesses for the whole company.
Stockdale tells American Banker: “I’ve worked with payday lenders, check cashers and money transmitters, and the common denominator for those three are onerous fees.” Stockdale also spent time at Mastercard, Citi, consumer goods corporation P&G, and American Express.
By selling the product through employers, Rellevate can connect to their users’ payroll and offer an alternative to payday loans. “This is making banking services available to people who otherwise would not have access,” says Rellevate investor Mark Parsells, a managing general partner at Montpelier Ventures and previously an online banking executive at Citi.
The CEO has put together eight sales people, pitching the idea to employers as a way of avoiding high employee turnover rates, as well as a route to improving job satisfaction and saving companies the stress of providing payday advances themselves to employees.
With time, attendance and wage data, the challenger will then calculate how much an employee can safely borrow in advance. Stockdale suggests these will be small amounts, such as $50 or $100.
The idea is that if employees’ cash flow falls short in a certain situation, Rellevate can advance them instantly based on this pre-put together data on the limits they can borrow.
“If you’re at the grocery store and you go swipe your card and it says denied because of insufficient funds, we will send you a text immediately asking if you want to access your earned wages, and we’ll transfer those instantaneously to you right then and there,” says Stockdale.
Employers can choose whether to subsidise the $9.99 monthly subscription fee for the service, or if they don’t, employees will have to cover the cost themselves.