Unit

Small businesses expect to manage their money inside the software they already use 🧑💻 Great insights from PaymentsJournal about how Vertical SaaS platforms are winning small businesses. https://lnkd.in/esn29Sdm

Season's greetings from all of us at Unit 🎄

It's that time of the year again: TAX FORMS 💃 🕺 Every software company that offers accounts through embedded finance needs to understand how to produce them. Quick context: in the US, every individual or business that earned more than $10 of interest in a given year receives a special tax form from their bank, called 1099-INT. In 2024, interest rates were high. So in the next couple of months, hundreds of financial technology companies will produce these tax forms for millions of end-users. It's a lot more complex than it seems. Dozens of partner banks are required to oversee exactly how those forms are created, filed with the IRS and delivered across tens of different relationships with tech companies. Tax forms require end-users to verify their details through other forms (like W-9). They must be accurate. And they must be delivered timely by postal mail (unless the end-user provides an explicit consent!). When banks have multiple programs with many end-users, that’s a lot of work, stress and room for error. Unit does it all automatically for its bank customers and their programs: - Our software ensures that end-customers fill a secure form to collect their tax details. - It summarizes all interest transactions for every single end-customer (individual or business). - It produces and file the required 1099-INT forms with the IRS automatically. - It makes the forms available to end-customers via mail and also digitally. This happens each one of our bank customers, across all the programs the bank serves. API docs: https://lnkd.in/gdqpiTUu

"Small banks, especially, can leverage BaaS platforms as a capital-light way to enter embedded finance." 🪶 Thoughtful insights from McKinsey & Company for banks considering an embedded-finance strategy. https://lnkd.in/eU4ZafVc

When banks partner with tech companies, they unlock more revenue 📈 Learn how embedded finance generates net interest margin and fee income: https://lnkd.in/gMxVHYh2 

Q: What does it take to achieve regulatory clarity in embedded finance? 🤔 A: A lot of hard work. Recently, our Chief Compliance Officer, Amanda Swoverland, participated in a tech sprint with AIR - Alliance for Innovative Regulation and the American Fintech Council. It’s a hackathon designed to help bridge the gap between regulators, banks, and fintechs. Amanda and her team won the hackathon by building a clear framework to help regulators understand fintechs (link in comments). We’re cheering for this important work to build trust between key stakeholders and get closer to regulatory clarity.

The rate of unbanked households has fallen by nearly half since 2011, according to the Federal Deposit Insurance Corporation (FDIC) 🥳 We’re cheering for the progress, while acknowledging that there’s a lot more to be done to expand financial access. https://lnkd.in/e3C_9Q75

For vertical SaaS companies, embedded finance enables them to become financial mission control for their customers 🎛️🚀

Hot off the presses: cards are still king 💳👑 Read more in this new report from the Fed (link in comments).

Fintech nerd level: over 9000 🐲 Bank account numbers in the US—especially those at credit unions and brokerages—can include letters like "X" and even special characters like "-." We’ve updated the Counterparty object to include these letters and special characters.