The partnership will enable businesses to embed financial services products such as payments, deposits, point-of-sale credit and merchant cash advances directly into their ecosystem.
NatWest has committed £115m to the establishment of the new UK entity and a £50m investment in European BaaS provider Vodeno to acquire an 18% minority stake.
“By entering into this strategic partnership with Vodeno Group we will be able to meet the evolving needs of our business customers as they look to embed financial products in their own propositions and journeys,” said Alison Rose, NatWest Group’s chief executive. “It also complements our existing investment in the development of business banking technology within our Mettle business.”
Through its business banking app Mettle, NatWest has built a standalone core banking and payments capability. Vodeno’s platform will provide a channel for delivering these capabilities to BaaS clients in the UK.
Wojciech Sobieraj, chief executive officer of Vodeno, said: “Our fully API-based platform offers a comprehensive suite of BaaS products that enable brands to ‘embed’ financial services directly into their ecosystems to create seamless customer journeys. We are excited to combine our technology with NatWest Group to offer the next generation of financial services.”
Vodeno, which is majority owned by Warburg Pincus, recently commissioned an independent survey of more than 2,000 senior decision-makers from European SMEs, to look at payments within banking ecosystems. It revealed the limitations that enterprises currently face.
On average, 35% claimed that payments take between two and three days to reach their business, 54% have been forced to take out a loan as a result of missing payments and cash flow disruptions, and 62% contend that delayed and unpredictable cash flow is the biggest challenge their business currently faces.
The vast majority plan to adopt real-time payment processing capabilities in the next 12 months.
Tom Bentley, chief commercial officer at Vodeno, said: “In the current macroeconomic climate, cash flow can mean the difference between survival and insolvency, and unpredictable payment processing is the single biggest disruption to business operations. BaaS offers new innovations, better solutions and the ability to make real-time payments a reality for more businesses.”
Image source: NatWest