5 ms·

Seed (YC W15) Wants to Reinvent Business Banking

40 points by emilepetrone 12y ago

btmerr 12y ago
Hey there, I'm Brian Merritt, the CEO of SEED. I'm happy to answer any questions you might have. You can also email me at brian at seed.co.
- rahimnathwani 12y ago
  One of the key elements of business banking is short/medium term credit (e.g. overdrafts and small business loans). These are typically offered by a company's main bank (as this bank has complete info on the company's past cash flows). Do you intend to offer loans and/or overdrafts, either yourselves, or in partnership with other companies?
  - btmerr 12y ago
    Short answer, yes. We have a lot of ideas about how to offer credit and lending products, both ourselves, and with partners. We're spending a lot of time talking to companies to understand the current pain points, and we'll be able to share more soon.
- vamega 12y ago
  What are the current rates for international payments. I'm very interested in the pricing structure here since it's an area that could certainly use some disruption!
  - btmerr 12y ago
    It's difficult to answer this question, because the nature of foreign exchange and banking in different countries makes it hard to generalize. What I can say right now is that our pricing will be transparent, consistent, and as low as possible. We will not seek to profit off of international payments fees, and any fees we pass through will be shared transparently. For comparison, we have heard of international transactions processed by banks that are charged upwards of 7% of the value of the transaction. Our pricing will be <1% in most cases.
- ensignavenger 12y ago
  I switched to Simple last year for my personal account, and I have wanted a similar alternative for my business accounts for a long time. Currently there is no way to apply for membership on your site- when do you expect to start taking applications? I will take a peek at your API in the morning :)
  - btmerr 12y ago
    If you fill out the form we'll send you an invite when we're able to accept new customers. There's a waiting list but we're working hard to get everyone on board as soon as possible.
    - ensignavenger 12y ago
      It turns out ad block was blocking the form :) I don't see an API method for depositing checks- is that something you plan to offer? Also, no method for getting transaction history?
      - btmerr 12y ago
        We're working to update our docs as quickly as possible, so transaction stuff will be there soon. As for checks, we're not planning on supporting check deposit via API initially. There are a few reasons: 1. Remote Check Deposit is a protected technology owned by Mitek and/or USAA, and we're limited in how we can use it. 2. Checks are a huge fraud vector, so we're going to be careful about how we support them. 3. Checks are literally the worst payment mechanism ever invented and we would love to see them die in a fire. So we're going to discourage their use as much as possible while providing better, easier to use payment mechanisms. That having been said, you will be able to deposit checks into SEED, just not via API for now.
        ensignavenger 12y ago
        Cool, I agree that checks are terrible, but I still get more customers paying by check than any other method :) Regarding item 1: Just curious- Do you mean Mitek and/or USAA have a patent on the process? Or do they own the only technology approved for some back-end process by the Federal Reserve?
online_reader_ 12y ago
Read the article, visited the website, read the docs -- still don't know why this exists or what the value proposition is; however, I'm not a business owner and don't do business banking. That said, I don't think I'm all that far off from the target audience as I do deal with billing, account balances and money transfers through third party api's. As an aside, someone needs to 'disrupt' the home mortgage loan process from top to bottom. Super opaque and really annoying to go through (even the information gathering phase) when compared to almost everything else I've experienced as an adult.
- btmerr 12y ago
  Our API offering is directed at a niche audience, but we'll be offering more products in the future, such as traditional online business banking, lending, and so on. +1 to someone fixing home mortgages. Super painful.
  - sighype 12y ago
    Can you toss out a few use cases where I'd kill to have you guys over a traditional bank? I'm curious how you pitched yourself to YC. Did you say you were going to be a sort of venue for people looking to build custom financial services on top of your API?
    - btmerr 12y ago
      We're building a better business banking service. To do so, we built an API first. Rather than waiting to release our mobile and web clients to serve traditional banking customers, we decided to release our API first, so that any companies that can take advantage of it can get after it. We've talked to a lot of companies that want to automate ACH payments, wires, check sending, and so on, rather than relying on manual and offline processes. Most businesses will be best served by our apps, once they're available. As for use cases, our conversations with business owners have led us to believe that nearly everyone is frustrated with the existing banks. Applications are difficult to use, offline forms are required, service is poor, and so on.
Meekro 12y ago
Hi Brian! I've read your API docs, and all this is pretty intriguing. As I understand it, you're offering this service so other people can write consumer apps for banking, and companies can integrate the API into their internal systems. I have just a couple of questions.. 1. What are your thoughts on dealing with fraud? While ACH is often reversible, wire transfers tend not to be. Established banks often have convoluted wire procedures (that often involve showing up in person at a branch) precisely because a fraudulent transfer -- even if the fraud was the user's fault because of phished credentials -- often results in the bank eating the losses. How will your company handle losses where somebody's API credentials got hacked, their balance transferred to Romania, and the victim notices and reports the fraud 59 days later? 2. One of the biggest limiting factors in bitcoin's growth right now is that exchanges struggle to get and keep relationships with traditional banks. No-doubt fraud prevention has a lot to do with this, but any bank that steps up to the plate could charge its partner exchanges huge fees and still be swimming in business. Have you thought about being that bank?
- btmerr 12y ago
  Hey there! One thing I want to be clear about is that we will not support consumer bank accounts, either directly or through our customers. So it will not be possible to build your own branded consumer bank on SEED. We expect our API will be used by companies that see value in automating their payments and receivables process, have a desire to integrate banking into their internal backend systems, have a desire to easily do analysis on their banking data, and so on. In the long run, we expect that most of our customers will use our mobile and web clients rather than using the API directly. To answer your other questions: 1. Properly managing fraud is critical to our business. As you mentioned, the potential risks are scary both for us and our customers. Some of what we do will remain private, but over time we'll share more of our approach to ensuring the safety and security of our customer funds. While we intend to protect ourselves against loss as well as or better than traditional banks, we believe there are many ways to do so without the inconveniences that most banks impose on their customers. Our first hire is an expert in cryptography, mathematics, and infosec, so that should give you some idea of where our priorities are. 2. We have thought a lot about how to best serve the bitcoin community. In fact, that used to be our pitch -- a bank for the bitcoin economy. As we spent many months talking to bitcoin merchants and the community at large, what we found is that the problems they face are the same problems many businesses face -- existing banks are serving business customers poorly. Until bitcoin stabilizes as a store of value or derivative strategies are baked into the exchanges, we don't believe that bitcoin transaction volume will grow meaningfully, so we're not focused on serving bitcoin merchants right now. Since our platform is flexible, we'll be able to integrate bitcoin support if and when it becomes a need for our customer base, so we'll see what happens. Personally, I own bitcoin and would love to see it or other cryptocurrencies thrive, and I'm a believer in the blockchain as an enabling technology. As to banking the exchanges, we're really limited by our regulators. We believe that properly operated exchanges that have MSB licenses and are running compliant KYC/AML programs deserve access to banking, and we believe that we can provide banking services to exchanges in a safe and lawful manner. However, the risk tolerance of our regulators does not always match our own. This is something we'll have to work towards. In the meantime, it's heartening to see that some exchanges appear to have found stable onshore banking relationships, such as Coinbase + SVB.
anemitz 12y ago
How does this compare to Standard Treasury? It looks like maybe Seed is more on the consumer/business side and ST would be seen as a wholesale banking provider (one level up in the bank chain)?
- btmerr 12y ago
  Dan can do a better job of talking about Standard Treasury than I can, so I'll let him speak for them. As for us, we are not planning on serving consumers. We are focused on serving startups and small business customers by providing traditional business banking services in addition to our API.
  - deleted 12y ago
    [deleted]
levlandau 12y ago
Is Seed similar to Plaid (http://www.plaid.com http://www.plaid.com)?
- btmerr 12y ago
  We love Plaid, but we're different. We compete with other banks -- Chase, Silicon Valley Bank, First Republic, Wells Fargo, etc. Zach can speak for Plaid, but to my understanding they're focused on providing API's that improve banking experiences for existing banks and bank customers.
  - toufka 12y ago
    Gotta say from an outsider's perspective, Seed [1] and Plaid [2] are pretty hard to distinguish from each other... [1] The world's first business banking API [2] The API for banking data [1] https://seed.co/images/graphics/seed_logo_blue.png https://seed.co/images/graphics/seed_logo_blue.png [2] http://farm6.static.flickr.com/5572/15111751177_d74935b2b4.jpg http://farm6.static.flickr.com/5572/15111751177_d74935b2b4.j...
    - btmerr 12y ago
      Fair point. We'll work to do a better job of helping people understand what we offer. Our focus has been to get our API into the hands of our early customers as soon as possible.
  - levlandau 12y ago
    Interesting! Do you currently compete with banks or will you do so eventually? Are your products independent of the banks your APIs interface with?
    - btmerr 12y ago
      We compete with banks, and also partner with them. Our model allows for multiple bank partners, but for the time being we're integrated with a single bank. Our stuff is designed to be portable between banks where possible. There are only about half a dozen bank core systems in wide use in the US today, so in theory if we integrated with all of them we'd be able to partner with most any bank. To date we have integrated with two different cores.
justkd 12y ago
I really love what you are doing. And it was about time:) I love you for tackling such a huge problem for us. Thx!
- btmerr 12y ago
  Thank you. We're honored to have the privilege to work on this problem and help the business community in any way possible.
logn 12y ago
What tool are they using to write their API docs? I think Stripe uses the same thing. http://docs.seed.co/v1.0/docs/authentication-login http://docs.seed.co/v1.0/docs/authentication-login
- JOfferijns 12y ago
  On the bottom of the page it says "Powered by readme" and links here: https://readme.io/ https://readme.io/
  - gdillon 12y ago
    Hey, I'm one of the ReadMe founders. Stripe was certainly an inspiration for us. I'm so psyched to have SEED building their API using our documentation tool—nice job SEED!
    - btmerr 12y ago
      We couldn't have done it without y'all, thank you!
- btmerr 12y ago
  We use http://readme.io http://readme.io and they are incredibly awesome. I can't give them a stronger or more positive recommendation.

40 points by emilepetrone 12y ago

Hey there, I'm Brian Merritt, the CEO of SEED. I'm happy to answer any questions you might have. You can also email me at brian at seed.co.

rahimnathwani 12y ago
One of the key elements of business banking is short/medium term credit (e.g. overdrafts and small business loans). These are typically offered by a company's main bank (as this bank has complete info on the company's past cash flows). Do you intend to offer loans and/or overdrafts, either yourselves, or in partnership with other companies?
- btmerr 12y ago
  Short answer, yes. We have a lot of ideas about how to offer credit and lending products, both ourselves, and with partners. We're spending a lot of time talking to companies to understand the current pain points, and we'll be able to share more soon.
vamega 12y ago
What are the current rates for international payments. I'm very interested in the pricing structure here since it's an area that could certainly use some disruption!
- btmerr 12y ago
  It's difficult to answer this question, because the nature of foreign exchange and banking in different countries makes it hard to generalize. What I can say right now is that our pricing will be transparent, consistent, and as low as possible. We will not seek to profit off of international payments fees, and any fees we pass through will be shared transparently. For comparison, we have heard of international transactions processed by banks that are charged upwards of 7% of the value of the transaction. Our pricing will be <1% in most cases.
ensignavenger 12y ago
I switched to Simple last year for my personal account, and I have wanted a similar alternative for my business accounts for a long time. Currently there is no way to apply for membership on your site- when do you expect to start taking applications? I will take a peek at your API in the morning :)
- btmerr 12y ago
  If you fill out the form we'll send you an invite when we're able to accept new customers. There's a waiting list but we're working hard to get everyone on board as soon as possible.
  - ensignavenger 12y ago
    It turns out ad block was blocking the form :) I don't see an API method for depositing checks- is that something you plan to offer? Also, no method for getting transaction history?
    - btmerr 12y ago
      We're working to update our docs as quickly as possible, so transaction stuff will be there soon. As for checks, we're not planning on supporting check deposit via API initially. There are a few reasons: 1. Remote Check Deposit is a protected technology owned by Mitek and/or USAA, and we're limited in how we can use it. 2. Checks are a huge fraud vector, so we're going to be careful about how we support them. 3. Checks are literally the worst payment mechanism ever invented and we would love to see them die in a fire. So we're going to discourage their use as much as possible while providing better, easier to use payment mechanisms. That having been said, you will be able to deposit checks into SEED, just not via API for now.
      - ensignavenger 12y ago
        Cool, I agree that checks are terrible, but I still get more customers paying by check than any other method :) Regarding item 1: Just curious- Do you mean Mitek and/or USAA have a patent on the process? Or do they own the only technology approved for some back-end process by the Federal Reserve?

online_reader_ 12y ago

Read the article, visited the website, read the docs -- still don't know why this exists or what the value proposition is; however, I'm not a business owner and don't do business banking. That said, I don't think I'm all that far off from the target audience as I do deal with billing, account balances and money transfers through third party api's. As an aside, someone needs to 'disrupt' the home mortgage loan process from top to bottom. Super opaque and really annoying to go through (even the information gathering phase) when compared to almost everything else I've experienced as an adult.

btmerr 12y ago
Our API offering is directed at a niche audience, but we'll be offering more products in the future, such as traditional online business banking, lending, and so on. +1 to someone fixing home mortgages. Super painful.
- sighype 12y ago
  Can you toss out a few use cases where I'd kill to have you guys over a traditional bank? I'm curious how you pitched yourself to YC. Did you say you were going to be a sort of venue for people looking to build custom financial services on top of your API?
  - btmerr 12y ago
    We're building a better business banking service. To do so, we built an API first. Rather than waiting to release our mobile and web clients to serve traditional banking customers, we decided to release our API first, so that any companies that can take advantage of it can get after it. We've talked to a lot of companies that want to automate ACH payments, wires, check sending, and so on, rather than relying on manual and offline processes. Most businesses will be best served by our apps, once they're available. As for use cases, our conversations with business owners have led us to believe that nearly everyone is frustrated with the existing banks. Applications are difficult to use, offline forms are required, service is poor, and so on.

Meekro 12y ago

Hi Brian! I've read your API docs, and all this is pretty intriguing. As I understand it, you're offering this service so other people can write consumer apps for banking, and companies can integrate the API into their internal systems. I have just a couple of questions.. 1. What are your thoughts on dealing with fraud? While ACH is often reversible, wire transfers tend not to be. Established banks often have convoluted wire procedures (that often involve showing up in person at a branch) precisely because a fraudulent transfer -- even if the fraud was the user's fault because of phished credentials -- often results in the bank eating the losses. How will your company handle losses where somebody's API credentials got hacked, their balance transferred to Romania, and the victim notices and reports the fraud 59 days later? 2. One of the biggest limiting factors in bitcoin's growth right now is that exchanges struggle to get and keep relationships with traditional banks. No-doubt fraud prevention has a lot to do with this, but any bank that steps up to the plate could charge its partner exchanges huge fees and still be swimming in business. Have you thought about being that bank?

btmerr 12y ago
Hey there! One thing I want to be clear about is that we will not support consumer bank accounts, either directly or through our customers. So it will not be possible to build your own branded consumer bank on SEED. We expect our API will be used by companies that see value in automating their payments and receivables process, have a desire to integrate banking into their internal backend systems, have a desire to easily do analysis on their banking data, and so on. In the long run, we expect that most of our customers will use our mobile and web clients rather than using the API directly. To answer your other questions: 1. Properly managing fraud is critical to our business. As you mentioned, the potential risks are scary both for us and our customers. Some of what we do will remain private, but over time we'll share more of our approach to ensuring the safety and security of our customer funds. While we intend to protect ourselves against loss as well as or better than traditional banks, we believe there are many ways to do so without the inconveniences that most banks impose on their customers. Our first hire is an expert in cryptography, mathematics, and infosec, so that should give you some idea of where our priorities are. 2. We have thought a lot about how to best serve the bitcoin community. In fact, that used to be our pitch -- a bank for the bitcoin economy. As we spent many months talking to bitcoin merchants and the community at large, what we found is that the problems they face are the same problems many businesses face -- existing banks are serving business customers poorly. Until bitcoin stabilizes as a store of value or derivative strategies are baked into the exchanges, we don't believe that bitcoin transaction volume will grow meaningfully, so we're not focused on serving bitcoin merchants right now. Since our platform is flexible, we'll be able to integrate bitcoin support if and when it becomes a need for our customer base, so we'll see what happens. Personally, I own bitcoin and would love to see it or other cryptocurrencies thrive, and I'm a believer in the blockchain as an enabling technology. As to banking the exchanges, we're really limited by our regulators. We believe that properly operated exchanges that have MSB licenses and are running compliant KYC/AML programs deserve access to banking, and we believe that we can provide banking services to exchanges in a safe and lawful manner. However, the risk tolerance of our regulators does not always match our own. This is something we'll have to work towards. In the meantime, it's heartening to see that some exchanges appear to have found stable onshore banking relationships, such as Coinbase + SVB.

anemitz 12y ago

How does this compare to Standard Treasury? It looks like maybe Seed is more on the consumer/business side and ST would be seen as a wholesale banking provider (one level up in the bank chain)?

btmerr 12y ago
Dan can do a better job of talking about Standard Treasury than I can, so I'll let him speak for them. As for us, we are not planning on serving consumers. We are focused on serving startups and small business customers by providing traditional business banking services in addition to our API.
- deleted 12y ago
  [deleted]

levlandau 12y ago

Is Seed similar to Plaid (http://www.plaid.com http://www.plaid.com)?

btmerr 12y ago
We love Plaid, but we're different. We compete with other banks -- Chase, Silicon Valley Bank, First Republic, Wells Fargo, etc. Zach can speak for Plaid, but to my understanding they're focused on providing API's that improve banking experiences for existing banks and bank customers.
- toufka 12y ago
  Gotta say from an outsider's perspective, Seed [1] and Plaid [2] are pretty hard to distinguish from each other... [1] The world's first business banking API [2] The API for banking data [1] https://seed.co/images/graphics/seed_logo_blue.png https://seed.co/images/graphics/seed_logo_blue.png [2] http://farm6.static.flickr.com/5572/15111751177_d74935b2b4.jpg http://farm6.static.flickr.com/5572/15111751177_d74935b2b4.j...
  - btmerr 12y ago
    Fair point. We'll work to do a better job of helping people understand what we offer. Our focus has been to get our API into the hands of our early customers as soon as possible.
- levlandau 12y ago
  Interesting! Do you currently compete with banks or will you do so eventually? Are your products independent of the banks your APIs interface with?
  - btmerr 12y ago
    We compete with banks, and also partner with them. Our model allows for multiple bank partners, but for the time being we're integrated with a single bank. Our stuff is designed to be portable between banks where possible. There are only about half a dozen bank core systems in wide use in the US today, so in theory if we integrated with all of them we'd be able to partner with most any bank. To date we have integrated with two different cores.

justkd 12y ago

I really love what you are doing. And it was about time:) I love you for tackling such a huge problem for us. Thx!

btmerr 12y ago
Thank you. We're honored to have the privilege to work on this problem and help the business community in any way possible.

logn 12y ago

What tool are they using to write their API docs? I think Stripe uses the same thing. http://docs.seed.co/v1.0/docs/authentication-login http://docs.seed.co/v1.0/docs/authentication-login

JOfferijns 12y ago
On the bottom of the page it says "Powered by readme" and links here: https://readme.io/ https://readme.io/
- gdillon 12y ago
  Hey, I'm one of the ReadMe founders. Stripe was certainly an inspiration for us. I'm so psyched to have SEED building their API using our documentation tool—nice job SEED!
  - btmerr 12y ago
    We couldn't have done it without y'all, thank you!
btmerr 12y ago
We use http://readme.io http://readme.io and they are incredibly awesome. I can't give them a stronger or more positive recommendation.