Hank Payments and FinWise Bank Enter into Strategic Partnership to Offer Enhanced Consumer Lending and Savings Program and Payments Services
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Insights
The agreement between Hank Payments Corp. and FinWise Bank is poised to create a symbiotic relationship, leveraging Hank's consumer fintech software and FinWise's payment services. This partnership is expected to drive a significant increase in transiting deposits for Hank, which translates into a new revenue stream through monthly fees. This could potentially enhance Hank's earnings, benefitting shareholders in the long term. Additionally, for FinWise, the partnership aligns with its strategic goal to diversify its sources of recurring fee revenue and deposit composition, which could reduce its cost of funds and strengthen its financial position.
Investors should monitor the implementation progress and subsequent earnings reports for indicators of success, such as increased transaction volumes and fee revenue. It's also imperative to consider the competitive landscape and how this partnership differentiates Hank and FinWise from their peers, as well as the scalability of the new technology developed by Hank.
From a market perspective, the collaboration between Hank Payments and FinWise Bank reflects a growing trend in the fintech sector towards partnerships that can provide end-to-end financial solutions. The integration of payment services with budget and cash management software is a response to consumer demand for more seamless financial experiences. This move could position Hank Payments favorably within the market, potentially attracting new customers and retaining existing ones through enhanced service offerings.
For FinWise, entering the payments processing space marks a strategic expansion that could capture additional market share. The partnership's success will depend on consumer adoption rates and the effectiveness of their joint services in improving financial management for users. Market adoption and customer satisfaction metrics will be key indicators to assess the impact of this agreement on both companies' market positions.
The mention of an intensive due-diligence process and compliance assessment by FinWise underscores the regulatory complexities inherent in fintech collaborations. The partnership's long-term viability will be contingent upon adherence to evolving financial regulations and the maintenance of a robust compliance framework. Stakeholders should consider the potential regulatory risks and the companies' ability to navigate them effectively.
Furthermore, the contractual details of the customer origination program agreement could have significant implications for revenue sharing, intellectual property rights and liability. As this sector is highly regulated, the partnership must ensure transparent and compliant operations to avoid any legal or reputational repercussions that could adversely affect both companies' business prospects.
Toronto, Ontario--(Newsfile Corp. - March 4, 2024) - Hank Payments Corp. (TSXV: HANK), an emerging North American leader in consumer fintech software-as-a-service with a banking platform that modernizes budgets and payments for enterprises and consumers, and FinWise Bank, a subsidiary of FinWise Bancorp (NASDAQ: FINW), a Fintech banking solutions provider, today announced the signing of a customer origination program agreement that will significantly enhance consumers' ability to pay down loans, build savings and access credit solutions.
Hank Payments focuses on technology that modernizes payments and cash/budget management. The platform improves consumer and enterprise cash flow, payment discipline and efficiency - while saving money.
FinWise will provide payment services, including ACH origination, wires, check, and bill pay services through Mastercard's Remote Payment and Presentment Service (RPPS), in collaboration with Hank systems.
Michael Hilmer, Chairman and CEO of Hank, commented, "We are excited to enter into this partnership with an innovative Fintech banking solutions provider like FinWise. The Company is highly focused on technology and automation and represents a best-in-class solution from our perspective." He added, "With new technology developed by the Hank team in 2023, customer deposits will be housed by FinWise allowing Hank to earn fees on the deposits. The more payments and cash Hank manages, including consumer household payments, the higher the transiting deposits will be. This represents a new ongoing monthly revenue stream for Hank as transiting deposits increase high margin monthly fees and are expected to be accretive to our earnings. Implementation of the program will commence at the beginning of the second quarter of 2024."
"We are excited to work with Hank Payments to offer consumers and businesses a strong payments solution," said Kent Landvatter, CEO of FinWise. "This strategic partnership gradually moves FinWise into payments processing and is in-line with our commitment to expand and diversify our sources of recurring fee revenue. We also expect it to help diversify our deposit composition and over time reduce our cost of funds through relationship banking. Consistent with FinWise's compliance and regulatory-first culture, the bank conducted an intensive due-diligence process and compliance assessment."
About Hank Payments Corp.
Hank Payments Corp (the Company or "Hank") is a North American leader in consumer Fintech Software-as-a-Service (SaaS) and Banking-as-a-Service (BaaS) platforms that manages consumer cash flow and budgets on an automated basis using proprietary algorithms that collect, store and disburse cash as required to discharge obligations in a timely fashion. The Hank stack provides for several vertical market applications of the technology, with features specific to channels and enterprise accounts ("Partners") that allow those partners to operate new lines of business and revenue streams, using Hank. For more information visit our website at www.hankpayments.com.
About FinWise Bank
FinWise is reshaping the Banking value chain through Fintech enablement. The Company is at a key expansion point as it incorporates BIN Sponsorship and Payments HUB offerings into its current platforms, creating an integrated Fintech banking solutions provider. Its existing Strategic Program Lending business, done through scalable API-driven infrastructure, powers deposit, lending and payments programs for leading Fintech brands. FinWise also manages other Lending programs such as SBA 7(a), Real Estate, and Leasing, which provide optionality for disciplined balance sheet growth. FinWise is well positioned to help Fintechs through its compliance oversight and risk management-first culture.- For more information visit www.finwise.bank.
FOR FURTHER INFORMATION PLEASE CONTACT:
For more information regarding Hank Payments Corp., please contact: Jason Ewart, EVP Capital Markets, at 416-580-0721. For Investor Relations please contact ir@hankpayments.com and visit the Company's website at https://ir.hankpayments.com/.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/200255
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