THE FINTECH INTERVIEW

Why the credit processing market has a gap The credit processing space has what Jim describes as a chasm in the middle. On one side sit FIS and Fiserv, what he calls the three-legged stool of incumbents. On the other side are startups that move fast and break things, often at their clients’ expense.“ Traditionally, the big folks in the space, they do what they do very well. They’ re very good at credit, but they’ re very bad at innovation. There’ s a long tail of underserved issuers in the United States and around the world that are just dying to go faster.” The other side presents different problems. Newer entrants move faster but lack credit expertise, and when they get things wrong, their clients pay the price.“ On the other end, the newer entrants to the space, they ' re not very good at credit. It ' s complex, it’ s hard to deliver.”

That’ s where Jim’ s thinking diverges from typical startup logic. When a credit processor fails, the damage doesn’ t stay contained.“ The scars and scar tissue occur because the clients learn that the processor’ s not very good at this and they’ re taking the wounds with their customers and then eventually with the regulators. We don’ t want to do that.”

Thredd’ s approach with LoanPro avoids learning on clients Thredd partnered with LoanPro for its credit launch rather than building loan origination and servicing internally. The decision reflects Jim’ s view that credit requires expertise you can ' t develop

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quickly and mistakes cost clients too much.“ We don’ t want to learn on the job with credit, so we’ re partnering with a great partner. What we’ re bringing is best-in-breed card capabilities. That’ s what we do really well. We’ re going to leverage the loan origination and loan servicing capabilities of LoanPro and we’ re bringing our credit ledger.”

The split makes sense. Thredd handles card processing, LoanPro manages loan infrastructure and clients get compliance from day one. Jim ' s been in the business long enough to know that service delivery matters more than speed when it comes to credit.“ We want to be bank grade out of the gate because I’ ve been in this business for 25 years. Credit’ s tough. We know service delivery is everything – it’ s one of our key selling principles.”

The platform model Thredd uses is horizontal, meaning clients bring problems and Thredd offers APIs to solve them. Credit expands that model into financing scenarios Thredd couldn ' t touch before, which changes how the company can respond to client requirements.“ It truly opens up the spectrum of things we can do,” Jim says.

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