Banking operations and instant payments with Form3

What

Form3 is a UK-based Payments-as-a-Service platform offering a unified platform that integrates with multiple payment schemes. The fintech serves clients like SumUp, N26, Barclays, and other leading European financial institutions and neobanks.

Founded in 2016, Form3 has raised over $240M in venture funding. Its 2021 Series C raised £116M from investors like Goldman Sachs Asset Management, 83North, Barclays Corporate Banking, and Mastercard. With an established base in Europe and the UK, Form3 is now moving into the US market.

Why

To David Scola, US CEO of Form3, the company’s operational and revenue models can help US-based players modernize their tech stacks to accommodate instant payments. In particular, by charging on a per-transaction basis, rather than through a singular up-front cost, Form3 lets its clients use revenues to pay for Form3’s services, rather than capex.

“With things like instant payments, particularly in the US because it's a relatively new methodology, nobody's quite sure how it's going to grow,” Scola said. “It’s a massive investment that’s potentially required within a traditional architecture, so this [pricing model] allows them to dip their toes in and know that they have the scalability necessary to grow if indeed it takes off the way most of us hope it will.”

How

Form3 decided to enter the US market following the introduction of FedNew and RTP. “It's, quite bluntly, the reason we've launched in the US,” Scola noted. Leveraging a market event like FedNow, as well as the migration of FedWire to ISO20022, has created an opportunity for players like Form3. Banks were already looking to modernize their payments, and these new systems and compliance standards have accelerated that need.

Form3’s US efforts began with a headcount of one 20 months ago—with Scola as its US CEO. It’s now scaled to about 70 people, Scola said, who are aligned for the US opportunity. Fifty of these employees are engineers located across North American time zones, ranging from Canada to Argentina.

Banks with traditional cores face an operational challenge integrating instant payment-friendly technologies into their existing stack. Form3 considers itself a logical place to start overhauling technological operations. As long as clients can maintain connectivity to Form3’s API, Form3 can host changes in their core platform environment.

From there, Form3 envisions working with banks on the Fedwire migration, building out ACH capabilities, and potentially preparing its infrastructure for cross-border instant payments.

“I think the technical solution is effectively already there on our platform,” Scola said. “But we will have to wait for the kind of regulatory and legal environment to accommodate for that in the future.”