How to Switch Embedded Finance Providers?

Finding the proper Embedded Finance provider is essential to your long-term success if your business offers or intends to offer a FinTech app or embedded banking solution. And, let’s face it, it might not work the first time.

You might be experiencing launch delays, scalability problems, or a mismatch between your providers compliance criteria and your own. Regardless of your circumstance, it’s critical to understand that changing Embedded Finance providers is not as challenging or time-consuming as it might appear at first.

From finding a Embedded Finance provider to transferring your customers’ money to their new accounts, our team is prepared to support you during the transition.

1. Connect with PayPugs and Start Preparing

At first our sales team helps to determine if PayPugs is able to support your use case. Once that has been established, our team will dive deep with questions to fully understand your business needs, necessary setup, legal information and more.

All this is used to further create a workflow for your project. That includes the account infrastructure, money flow, KYC/KYB process and more. It is necessary to get all details straight at the beginning in order not to run into any bottlenecks once we have started.

2. Undergo AML Process

Building a strong relationship much depends on a resilient compliance understanding of both companies. In many cases, compliance is a make or break. In order for us to fully provide and trust your business operations, we ask you to undergo our AML onboarding. During this process we will ask for your business legal and operational documentation as well as any information that might be related to your licensing, KYC processes and more.

PayPugs is very thorough about this stage. The process and documentation requests may seem to be a lot at the start, however, it is all meant to establish a solid ground in order not to halt any future operations.

And don’t worry. Our compliance team will ensure that you understand all necessary information.

3. Switch to PayPugs Embedded Finance APIs

You might have started or finished constructing your product using the API of your current Embedded Finance provider depending on where you are in the build process.

The PayPugs project management team will work with you to remap your embedded banking product or FinTech app to PayPugs APIs in order to assist in a smooth conversion process. The amount of additional development effort required to switch providers can be reduced if a proper remapping process is established.

The team at PayPugs will also assist you in testing your remapped product and navigating the new APIs.

4. Implement New Compliance Policies

As known, compliance can be a make or break for many. In this crucial that both – Embedded Finance provider and your business – understands the importance of this process. At this stage it is important that both parties understand your business operations and target audience. Establishing whether they are individuals or businesses from high-risk sectors can help to craft and implement the necessary policies that would ensure that your customers are onboarded smoothly and that your business is protected against unwanted compliance issues.

This process includes: 

  • Providing complete risk and compliance documentation (policies, procedures, disclosures)
  • Establishing fraud and anti-money laundering rules
  • Establishing program, transaction limits, risk scoring, and more

To avoid having your customers go through the KYC/KYB process again, your new Embedded Finance provider will attempt to verify that you’ve already sufficiently completed the initial and ongoing KYC/KYB checks for your existing customers. This can help to provide your existing customers new accounts without having to complete KYC/KYB process again.

5. Receive Operational Accounts

Once you have completed the onboarding process, PayPugs will open you necessary IBAN accounts needed for your Embedded Banking setup. This could include an operational account, fee account and others.

6. Finish the API Setup and Test It

Since the start of the process we have onboarded your company, created necessary policies and workflows, opened several operational IBAN accounts for your business and started the API implementation.

At this point, one of the last steps in the process is to perform the finishing touches and test the new system. This is a crucial step in the process because you want to ensure that your customer receives a seamless and better experience than with your previous Embedded Finanace provider.

7. Inform Your Customers

Your customers must opt in and accept your new terms and conditions, which have updated to align with PayPugs policies, before you may transfer their funds to their new accounts.

Depending on your consumer base and product line, each circumstance will require a unique procedure, however the procedure generally involves the following steps:

  • Inform your consumers that their account will be transferred to a new provider.
  • Give your clients the option of using the new IBAN account or not. If the client declines, you close the account and send them any remaining funds.
  • The funds will be transferred utilizing the procedure outlined in the next step when a customer opts in to the new account.

8. Fund Customer Accounts

You will need to arrange for the funds of all of your customers who chose the new account to be transferred from your current Embedded Finance provider to your new one. These funds can be transferred in one of two ways:

  • Customers should receive their money back and be instructed to transfer it to new IBAN accounts (this might be appropriate if you are a B2B company with fewer customers that each have a large deposit balance).
  • Close the customer account with your old provider by making a short series of API calls, then transfer the funds to the new customer’s PayPugs IBAN accounts. This procedure is more common and produces a user experience that is more seamless.

PS. Remember that this is actually your Day 1 of your Embedded Finance journey. Read here on how to navigate it.

Get in touch to learn more

Your company’s long-term success depends on choosing the proper Embedded Finance supplier. Despite your current circumstance, you should be aware that moving service providers is not as time-consuming or complex as it might initially appear to be.

Some Embedded Finance providers have started delaying or stopping the launches of their FinTech partners as regulatory scrutiny of the FinTech sector grows.

The PayPugs platform was developed with regulatory compliance at the forefront, enabling open conversation and easy teamwork. We ensure that your company is supported during the setup and scaling stages by building strong ties.

Our team is here to make the transition comfortable for you and your clients even though we are aware that changing Embedded Finance providers is not an easy choice to make. Use the following link to get in touch with our team.

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