What is the best way for a fin-tech (mobile wallet) startup to approach a bank for an operational partnership? For eg. Stripe & Wells Fargo

1. What makes the deal attractive to the bank, what are the banks looking for? eg equity, fees, etc? 2. Who in the bank are the best to approach? 3. How do you position the partnership so it is attractive to the bank? 4. Are there some banks that are better than the rest for a partnership with a startup? eg white label banks


Depending on the market, a bank is going to look at a combination of low-cost customer acquisition (particularly in strategic growth segments), mass-market desposit mobilization, credit portfolio growth and fee-based income. The respective weight of these, in terms of relative importance, will depend on the bank and its strategic objectives. It will also vary based in whether you are talking to an acquiring or an issuing bank. The best way to approach a bank is therefore to identify which core business element your startup is best positioned to support, and which bank is likelier to find the value prop attractive. I would suggest talking to the head of retail banking, the head of credit business and the head of acquiring business.

Answered 7 years ago

To answer those questions best you should frame those questions around the specific problems you are solving.
What problems are we solving for the bank?
What problems are we solving for the consumers of the bank?
How are the bank currently solving those problems?
In what ways are we significantly helping the bank and it's consumers?
Based on how you monetize and how you add value to everybody involved gives you insight into how you put together a partnership that not only generates interest but also has the potential to last.

Remember this: Triple Win Partnerships. A win for the bank. A win for your company. A win for the end user/customer. If all three win now and in the long term it could be a good deal. If it's short on any of the three, the deal won't last.

Start calling banks that you can quickly and easily call and meet in person if there is an interest in your product and service. Start NOW if you haven't already. The best direction you will get is from the people you speak from the bank yourself. You will also learn a lot going through the process. Time to suck it up and make some calls.

Last note: the example you gave... Stripe and Wells Fargo... Based on the other partnerships I've established with banks/payment processors, they are always open to partnerships that bring in new merchant accounts that are low risk and profitable. In this case specifically, it's more than likely a shared percentage of the net revenue on fees collected from the merchants. The shared amount between Stripe and Wells is probably 95% Stripe to 5% Wells. Also, Wells probably doesn't do a whole lot. They more than likely are just the sponsoring bank for ISO registration to Visa/MasterCard.

I hope that helps. Let me know if there is anything else you need.

Here to serve,


Answered 7 years ago

Most banks will not forge any partnership. Depending on which country of the world you operate in, financial regulators may prohibit the bank from investing in your startup in any manner.

The bank, first and foremost will always concentrate on their business. If you fit into their traditional business channels, they will work with you. This is what banks do best. They provide (sometimes even extend) their banking platform which includes financial services to businesses to build upon them.

Since they are the only ones who are licensed to handle money, the bank will always see how your product offering can fit into their scheme of things.

To specifically answer the questions you asked:

1. A deal is attractive to the bank when (a) it is compliance with the regulator (b) the Risk Officer of the bank has deemed it to be less risky (c) it is in play with their current product offering (d) it does not downplay or dilute an existing product offering

2. The Who is almost one of the easiest part, yet, the one that most people screw up with. You have to be cognizant of the banking verticals and under which department would your product offering come under. Very rarely would a product offering over lap with two departments. Anyhow, find out which department can sponsor/lead the initiative and then speak to the Head of Department. A common mistake is for people on the outside trying to figure out who in the bank would be responsible for leading the effort. If the HOD of a specific vertical sees potential in your offering, they will channel it to all the right places.

3. Banks as I cited earlier, don't put much play into "partnerships" in the literal sense. What they are more interested in, is the likelihood of making money by what you have to offer. So, they are interested in the topline, bottomline and everything in between. You first and foremost have to tackle the Legal/Compliance angle. Without this being tackled, there is no going forward. Then, how much business can you throw their way in a given year. Don't worry, they will figure out how much money they will make from it. You just have to be confident of throwing business their way. Lastly, what value add do "you" bring to the table. If the bank sees synergy in your offering, they will very easily be able to work with you to white-label your product(s).

4. As cited above, most banks will NOT do partnerships (of any kind). They will however offer a listening ear for white-labeling of services.

Best of luck in your endeavor.

Answered 7 years ago

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