Building Fintech Apps with Peter Hazlehurst of Synctera and Robert Yau of Sincere | Soar Payments LLC
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Building Fintech Apps with Peter Hazlehurst of Synctera and Robert Yau of Sincere

In this special episode we sat down with Peter Hazlehurst the Co-founder and CEO of Synctera, along with his client Robert Yau Co-Founder at Sincere to discuss the process and power of developing Fintech apps. Synctera not only aids in the building process, but also in helping their clients navigate their banking relationship to ensure they get to market quickly and responsibly.

Payments & Fintech Insights In This Episode

  • The importance of an efficient path to market for Fintech apps.
  • How navigating a banking relationship can be a big lift for a growing Fintech company.
  • The power of Synctera’s T-minus 10 process.
  • How the inevitable complexities around compliance can drain company resources and how a partnership can alleviate that burden.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to PayPod. I’m your host, Heather Bodie. And today we are going to be talking about building and launching FinTech apps. Joining me is Peter Hazlehurst, the CEO of Synctera, a platform designed to help provide everything you need to build and launch a FinTech app that can scale over time.

And we also have a customer of theirs, Robert Yau, co-founder of Sincere the first cash-back debit card for pet parents. Welcome, Peter and Robert. Thank you so much for joining me today.

Peter: Great to see you, Heather.

Robert: Thank you. Good to be here.

Heather: I’d like to start for a moment with you, Peter. And tell me a little bit about yourself, how did you get into the industry, and what led you to this point?

Peter: So I’ve been a long-time player in the FinTech universe from back in the old days when it wasn’t even called FinTech yet. I came here when I was 20 years old to build a startup, to build the first Windows-based core banking system. So I’ve been here since ’93, and I started working with community banks. Since then I’ve done a bunch of different things, including working at Google and launching Google Wallet and tap and pay.

We spent a bunch of time at a company called Yodlee, and we invented all the APIs that everybody now uses from Plaid and everywhere else. And we did online banking for the really big banks like BofA, Chase, and so forth. Most recently, I spent a couple of years at Uber looking after all the payments and risk, and launching a neobank for drivers called Uber Money.

So really what we started to do with Synctera is sort of leverage all of those combined experiences of being a builder and a buyer and an assembler, to create the easiest platform for FinTech founders, people that either know tons and tons and tons about banking and just want APIs, or people that are getting started and learning banking and technologies and wanna launch something really interesting.

So we’ve tried to keep it really straightforward and easy to access. It’s been a long journey for us, and long is only 18 months, 24 months in September.

Heather: It’s nothing.

Peter: It’s been…

Heather: Congratulations.

Peter: But it’s been pretty cool. And we, Robert and I actually did a presentation at FinTech DevCon almost 12 months ago in Colorado, talking about how we were just gonna get started. And it’s super exciting to see Robert’s idea come to life. I’m a customer, and it’s fantastic.

Heather: So I feel like there’s this common misconception because there is inherent simplicity to using apps that there’s this feeling of, “Oh, I’m sure there’s an app for that.” And because technology simplifies our lives, it must be, “simple to create,” which I know is fundamentally not the truth.

So talk to me about that customer experience. If you wouldn’t mind, Robert, what initially drew you to knowing that you needed to include an application as part of what you were building, and how Synctera has made that possible for you?

Robert: Yes. So I think that’s, you know, what you say is actually, correct. It’s not as simple as people think it is to create. So the bottom line, there’s no magic bullet. It’s not just a matter just building and it will come. So for us, it’s more, you know, we identify a potential pain point or a potential opportunity in the pet market.

And the way I personally look at the problem was what type of business we’re building, whether it’s some lifestyle business versus something much bigger than that. And that’s how we approach sort of partnerships for banking services. My background is…I know nothing about FinTech.

This is my first time entering the FinTech space, but I do have a big consumer background. So I took all that into account, essentially, what partner we could go and find that could fill in that space for us. And we looked at a few, and we decided at the end of the day that Synctera was the right fit, because we are looking to build a lot of long solutions.

So that’s sort of, you know, how we end up. As Peter said, we actually got engaged quite early on, which also helped us a lot in terms of explaining what we need and how Synctera can help us. And that’s been a great partnership.

Heather: So talk to me about your company, what Sincere offers and how it works, and why it’s so important.

Robert: So we all know, even before the pandemic, the pet is a huge market, and then it got accelerated during the pandemic. So huge meaning, you know, numbers, like, in the billions. So I think right now last year it was, like, $120-plus-billion market in the U.S. Globally, it’s, like, three times that. So we all know it’s a big market there, so a lot of innovation happens in that market.

So from pet food to toys, to pet clothing, but there is a huge thing around finance, just like human medical, pet medical is very expensive and pet insurance is not a full coverage to have a product. So what I’ve noticed is that within the pet parents, a lot of them either do not have pet insurance or they can’t afford medical bills when it happens to their pet. And yet these pets are like children to them.

So what happens is, they either carry big debts on their credit cards or they get taken advantage of, right, with predatory loans and things like that. And that’s because there’s a huge legacy system around the whole lending process of identifying, you know, the insurance risk profile.

So our take is this, is that, okay, something needs to be done there in terms of innovating on the finance side targeted just for the pet people. So what that means is now we could do things like potentially risk profiling based on how they spend. We could potentially do loans against their medical bills because we will have a relationship with the vet also. So there’s a lot of areas that we could potentially look at.

And the first product that we worked with Synctera on was the debit card. I was gonna say it’s simple, within context, in the financial space and the compliance regulations, it’s the simplest product to enter the market with. Obviously, there are other more complex financial products we’re gonna take on, but those will take time.

But hence for us, the debit card is the first entry into that. So users will get to know about Sincere, and then our vision is to take that to a longer play, but really focus on that pet industry.

Heather: I know I have the pain of your customers all too well. I’m one of the people who adopted yet another pet during the pandemic, one with lots and lots of medical issues.

And to what you were saying, whether or not folks can afford them, sometimes they’re surprising as you don’t even have an understanding of what the scope of the financial burden will be for a certain procedure until you’ve made the decision that, “Yes, it needs to happen,” so…

And those moments are so hard to make those decisions and, too, right, they’re so highly emotional, like you said, our pets are like our children. So I really, really connect with what you’re doing and I’m grateful for your innovation in that space.

So once you decided Synctera was a good fit, talk to me about that customer journey. And maybe this is back to you, Peter, can you tell me a little bit about what are those very first next steps? What does it look like when someone decides to work with you?

Peter: I think things have evolved a lot since we first engaged with Robert. When we were getting started, we were throwing a fairly wide net for developers that were interested in building something interesting and unique.

And as we were learning, we worked with Robert and the team on, “What’s the engagement model of how do we talk to you?” and so forth. Where it is right now is pretty good. We’ve evolved.

And we’ve created a platform called t-minus10. Think about it as the 10 steps to launch of your FinTech, and it’s like a live sandbox environment. So it makes it really easy to build and test, print a debit card, try some transactions out before you actually even go through the process of finding a partner bank to be your sponsor.

Because the thing about building a FinTech is, you can do all the work and print a beautiful debit card, like mine here with my puppy, Sofie, on it.

Heather: Hi, Sofie.

Peter: And get that all done, but you can’t actually ship if you don’t have a bank partner. And so our work is two parts. One is help Robert build and, two, navigate a banking relationship at whatever level of engagement FinTech founders like Robert want. Some will say to us, “We never wanna talk to the bank. You guys take care of it. Just minimize the compliance work that we need to do to get it to market.”

Others are super dedicated and say, “I wanna have a direct relationship to the CEO of the bank. I wanna have a weekly check-in with them. I wanna talk about growth strategies.” And our job is to balance all those different ways of engaging and find the right matchmaking between a bank and a FinTech.

And our platform is kind of unique where we have 11 banks that have different risk appetites and different profiles. So we have one bank called Regent Bank in Oklahoma that’s quite happy doing cannabis FinTechs. And that’s relatively unique because cannabis is quite a heavily regulated industry. Robert’s use case is actually relatively straightforward with banking for pet lovers.

And when we expand the functionality together to do, effectively, “Buy now pay later,” or helping pet owners cover expensive bills, then we’ll add another complexity, which is lending. And each of these things is a journey for us with our FinTechs and with our banks to keep them aware of what’s required to navigate the inevitable complexities around compliance. And I think Robert would be, it’d be fair to say that you’ve learned more about banking compliance than you probably ever wanted to learn, and then 10 times more.

Robert: Yes. And I just wanted to add that, that actually worked for Synctera. It’s not the fact that they’re just a banking partner tying us to a sponsor bank. The big thing was because we came through a non-FinTech background, the knowledge and the work that we gained from Synctera, I think it saved us not just time, money.

I’m super careful where we spend our pennies. I would say just the compliance knowledge that we gained from working with Synctera, that probably saved us millions. And I’m not joking, right? In fact, when I see how much…some compliance folks charge per hour or similar…

But on a more serious note, I think one of the big thing about Synctera, and sort of what Peter’s touched on is this, you know, call it a one-stop solutions. Meaning, we go to Sentara, we have a long vision on Sincere where we want to be, debit cards, like 0.1 of our journey.

And we see this complete financial system we’re building for the pet market. And we saw parallels with Synctera. What that means is debit card today, the potential of credit cards, the potential of loans, buy now pay later, is a single place for us.

Unlike some of the other platforms, we don’t have to go and stitch things ourselves with different vendors. For us, we just talk to Synctera. It ties into all the other solutions, the other vendors that we don’t necessarily have to deal with ourself, so Synctera takes care of it. And that was a nice thing.

And that’s actually a very strong signal for us to work with Synctera, is that parallel of the long vision that we could…we will grow with them with the product offering and also in terms of some of the vision. And one of the great thing that I know when I first engaged with Peter and this emerged quite early on, he saw our vision.

So he got what we were trying to do. And there was…you know, a lot of stuff overlapped and that sort of helped us a lot in terms of how we also picked the partner in the beginning.

Peter: I think one of the things that sounds like Robert need to evaluate is does it technically work. That’s sort of a basic thing. Is the API stack reasonable or is it some crazy implementation that makes it difficult to code to? Third, is, are there people on the other side of the world that actually understand the business Robert’s in and/or how you could apply banking, like services, to that business?

And then fourth, will you find a bank partner that actually believes in what you’re doing? Because what can happen is, you could go build all of this stuff and then the bank says, “I don’t really like your idea. I’m gonna be really punitive and charge you lots of fees.” And that will just stifle growth. And where we wanna end up with at Synctera is this principle of, like, Shopify for banking.

So Robert’s sort of grown with us. The next Robert that’s doing a neobank for people that love Pellegrino, that person is gonna come through an even faster learning curve because we’ve built an open source mobile banking app. So they don’t even have to do that anymore, and so on.

So we’re gonna continue to evolve to make it faster and faster to launch. Because testing and getting signal on your community is the single most important thing that a FinTech founder can do, which is, is my idea interesting, do people believe in my idea, and is there some sort of traction metric? And right now the cost of getting to the experiment is really high.

We’re making it smaller. If we can get the cost of getting to an experiment down to, like, a day of time, then it really is like Shopify. So there are so many web stores on Shopify that only do $1,000 a month of sales. But it doesn’t matter, they’ve found their community and that’s okay. And then some of them had breakout experiences. We wanna do the same thing on the banking side.

Heather: So let’s talk about security and privacy. I know you had made a slight joke earlier that Robert knows more about banking compliance than he could ever wish. What is Synctera’s approach to security and privacy? And is that a partnership between the two of you or is that something Synctera is exclusively responsible for?

Peter: So privacy and security is everybody’s concern, and it’s always the weakest link that gets you in trouble. So foundationally, we at Synctera go through a number of certifications and verifications to prove that our platform is as safe as it can possibly be. Inevitably, somebody will send us a security alert saying, “Hey, I found this area where you could do some more homework,” and so on.

But we continuously do intrusion detection and scanning for weaknesses and so forth. That’s just the minimum. You have to do that because, particularly in banking, money is involved and you can’t be lackadaisical about the monetary support. So we go through a bunch of audits, and we have to attest to those audits to the bank.

On behalf of the bank, we actually require Robert and his team to do effectively the same thing so that if our APIs are safe, but a problem is in his app and people could exploit the app that would be just as bad. So from a consumer’s perspective, apps that launch powered by us as safe or followed the same standards of safety as any that would be launched from a community bank, or from Bank of America, or Citi, or Chase.

And the regulators don’t care that Robert is a small startup with 20 employees. They care that the consumer on the other side of this has a real bank account with real money in it. And if the money gets stolen or taken away that there’s safeguards to protect that. And there’s not lighter standards because it’s just a neobank for people that love their pets.

Heather: Right. You don’t, like, tier up as the organization grows. You’re at the top tier as you enter the business, essentially.

Peter: And this has traditionally been a moat that the big banks have used to make it harder for FinTechs to compete, because they basically say, “You have to do these thousand steps before you can launch.”

And it’s literally 1,000, right? Robert, probably 800, but it’s a lot. And our job is to help Robert understand what he has to do, what we can do with him, and then the frameworks of protection and the layers of safety we can surround him with.

Robert: I would also add, even just from an entrepreneurial or startup perspective, not necessarily the fact that you’re in the banking space, I think as a responsible business, we take security and privacy into account, regardless if you are in the banking space or not. Because the effect, if you don’t do it right, it really hits your business later on if you don’t do it right now.

We always see this where in the press about information being leaked or being hacked. So even if we were not in the banking space, I think it’s something that it should be top of the list in talking about security. But to Peter’s point, yes, there’s an extra layer to that security when we’re dealing with people’s money at the end of the day.

So in our case, we actually try to avoid storing information, like, we don’t need to store. So that’s certainly required by the bank. So things like social security numbers, that’s not necessary for our day-to-day. So that’s how we sort of handle some of the contingency if anything were to happen, that sensitive information, we actually don’t store ourself, we just get…pass it along to the banks.

So there are other ways that as a startup, we minimize any potential in the future. But, yeah, to Peter’s point, we went through a lot of penetration testing and a lot of security processes that may not necessarily be needed. We were a non-FinTech, but I would, as an entrepreneur think people should do regardless if they’re FinTech or not. It’s just where we are at, you know.

Heather: Ethically speaking, yes, absolutely. So building an app that functions for right now is different than building an app that has the potential for scalability and will grow with your company. And I know that’s part of Synctera’s value statement is that we’re building, launching, and, ideally, for businesses that are going to scale and grow. Robert, can you talk to me about the support structure in the ongoing relationship with Synctera to be able to go from that initial launch to that scaling or growth phase with the application?

Robert: Right. So, I think scaling is always in the back of my mind, but not necessarily a priority at this point. But maybe the way to rephrase my answer is this, the way I look at the journey, it’s how can we quickly prove out that there’s a market there for our product, you know, the product market fit, and how do we get there with the minimum amount of investment?

And that means time and resource, but with the fact that if this were to work, is anything that’s stopping us from scaling? So we know there are solutions out there that will may…get us to, you know, oh, seven days we could launch a virtual card. But we know being very deep tech ourselves, that it will not be able to scale if we were to ramp up to, let’s say, 1,000 users.

So those are things that is always as a founder, I need to sort of balance, right, the trade-off, what are the tradeoffs? Can we live with those tradeoffs? But the difference we found at Synctera, and I think it’s also a timing issue, too, because I started to engage with Peter, we were both quite early on. So we were able to say, “Okay, this is what we need.”

And we were able to get this feedback immediately from the banking side and also from where we are in terms of the market. So what that means is… So a good example was the photo card. We know that’s gonna take time. But Peter’s team, we’re willing to see what’s involved and what we could do today, versus for example, in six months’ time, what that may look like. So how we could quickly get to where we are today with what we have?

Now, obviously, this will work, “Hey, we could get to where we are today based on this. But if our user base grows to X, Y, Z, then there are certain things that we need to put in place, too.” So a good example, compliance, there’s certain compliance that we could do for 50 users, but we cannot get away with for 500 users as an example. So in a similar light, we have 10 users versus 1,000 users.

They are at different levels and that’s what Synctera wrote. Because we started with zero, so obviously with zero, we could get away with this, but the minute we hit, let’s say, 500 users, then we need to do this. And, you know, so scale up in terms of both our investment and time.

So that’s also super helpful in terms of how we think about this. But, you know, to summarize I think the big thing is, as a founder is knowing when to make the tradeoffs, but really keeping in terms of what we are building, what you are actually building, so keeping that vision, you know, that’s always in the back of my mind. If we are gonna scale this, is Synctera gonna scale with us?

Or if we decide to pivot or for whatever reason, right, for another business model, how it’s gonna work. So something that’s entrepreneurial, I have to think about all the time. But, yeah, we’ve solved that, and so Synctera has been sort of in parallel in terms of what we’re doing. And to be honest, the support system has been amazing.

What I mean by that is, we are able to access…and I’m gonna get Peter into trouble, but we’re able to access from the engineers all the way up to the compliance folks across to Peter himself, right? And I know how expensive their time is, but with the fact that we were at zero, right, when we first started, so I am sure just on the time alone, we’ve probably spent, God knows how much now. I’m sure it’s not gonna scale.

So this is why…but that was a huge thing for us, too, is the fact that we are able to get to the source of the people who could help us and that’s Synctera, which has been super helpful.

Heather: To wrap up our time together, I love to ask my guests, A, if they’ll give us a little insight, anything exciting, any new projects, partnerships for either one of you. So if you wouldn’t mind, maybe we’ll start with Peter. Is there anything you can give us the insight scoop on that Synctera is working on right now that we should keep our eye out for?

Peter: Yeah. One of the things, and it’ll probably annoy my marketing and product teams that we’re working on, that I’m gonna scoop you on is we’re going to introduce, we’ll call it starter edition pricing, where it’s, like, an all-you-can-eat price for, like, five bucks a user a month as a simplification of all of the complexity around different components.

And for our earliest FinTechs, we think this is gonna make it really straightforward for them to understand, I’m gonna make 70% revenue on the interchange. It’s gonna cost me five bucks a month. And I don’t have to think about every other little fee and a line item that exists.

And the reason we’re doing that is because we’ve heard from a lot of folks that the payments ecosystem has so many components and so many layers. And unless you are really focused on navigating and negotiating down to the penny, it’s actually too hard to think about. So we’re gonna simplify our pricing model tremendously as a result.

Robert: So I think from our side, the way to think about sort of the pet market and what we’re trying to do in the financial space, debit card is really just is your point one of where we’re heading. As yourself being a pet parent, there are a lot of financial areas that needs to be innovated or solved that’s happening on sort of what I call the children’s markets, that’s everything from medical to clothing, you name it.

And I see parallels in the pet market, but for whatever reason, whether it’s difficult entry or no one’s really thought about it, it hasn’t been solved. So iinsurance, a good example, loans another a good example where it’s still stuck in this legacy system. So if our vision is right, the things to look forward to is that you will hopefully see Sincere as that financial area for pet parents. Snd, yeah, the debit card, it’s really just a 0.1 where we’re going.

Heather: Well, thank you so much, both Peter and Robert for joining us today. I love these chances to speak with both people who are managing a product, but also the people who are benefiting from that product. So it’s really cool to hear about the dynamic between the two of you and to get that insight scoop on the customer journey. So thank you both so much for joining us. If folks wanna get in touch with either one of you, where should they go?

Robert: Very simple. My email is just robert@trysincere.com. They could just contact me there.

Heather: Great.

Peter: Same, same just P, the letter P, p@synctera.com, super easy.

Heather: Beautiful. Thanks so much to both of you for joining us today. Look forward to seeing your futures hold in those…in your projects. Thank you so much.

Robert: Thank you.

Peter: Thanks.

Female: If you enjoyed this episode and wanna hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.

Industry Spotlight

Synctera & Sincere

Whether you’re looking to prototype, release an MVP, or bring a new service to your existing customer base, Synctera has the platform, experiences, and programs to help you build and launch your FinTech app fast, and scale it over the long term.

Sincere – the debit card for pet parents. Get rewarded for spending on your pets with the first debit card for pet parents.