Finance Everywhere, Podcasts

After being acquired by SoFi, Galileo’s Clay Wilkes looks out to a busy future

  • Banking and payments as a service platform,Galileo was recently acquired by SoFi for $1.2 billion.
  • Now, it's growing globally as fintech startups and companies in unrelated industries want to launch financial products.
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After being acquired by SoFi, Galileo’s Clay Wilkes looks out to a busy future

One of the most exciting stories of this generation of fintech firms is Galileo. Recently acquired by SoFi for $1.2 billion, Galileo now provides the payments and banking backbone via APIs to many of the top names in the game, like Chime, TransferWise, Robinhood and Bluevine. Firms like these use Galileo to open accounts and issue cards.

Clay Wilkes founded Galileo 20 years ago and continues to lead the company today. He joins us on the podcast today to talk about why his firm is seeing so much interest from companies across industries that want to launch financial products. Clay describes Galileo’s genesis story and what the early opportunities were for the problems he was attempting to solve. He describes the evolution of the platform as financial services have evolved. Clay dives into the use cases for his customers and lastly, he talks about the product and corporate strategy pipeline he’s got lined up for the near future.

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The following excerpts were edited for clarity.

20 years in the making

It’s been a journey. We began with the goal to transform the enablement of financial services. It’s interesting to look at the evolution of financial services generally — starting with credit, then debit, and everything else that came after. That third bucket is the world we plugged in to. Digital banking and fintech really emerged out of that. Galileo was in a prime position to take advantage of that.

Our platform is different than other enablement technologies. We don’t look at the inputs and outputs of cards or accounts, per se. We organize data and information, which has allowed us to be very capable and diverse in the way that we approach solutions to problems.

Banking as a computer science problem

The enablement of financial services can be seen as a computer science challenge. As you look at large legacy players, they’re fixed, rigid and monolithic. It was very important to have an enabling capability that we brought out.

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Early wins

If you think about the computer that sits on your desktop, you can organize everything in a hierarchical structure. That’s how we started. All of these apps in emerging forms of payments are very diverse. We’re talking about gift cards, transit, travel, payroll, and now digital banking and ecommerce. Being able to have a capability to power all of that is really important and one of the reasons Galileo has been successful.

Evolving client needs

It’s been an evolution. Fintech really grew out of the early days of prepaid. Now, we’re more consumer aware and the need to be more consumer aware. Some of the leaders in the space now are very cognizant of changing the way banks do business.

Use cases

Our APIs provide account of record, ledger, authorization, settlement, ACH, fraud dispute, customer service, business intelligence and all-leading forms contactless payment, including Apple Pay, Google Pay and Samsung Pay. We can provide push provisioning. We are integrated to the leading cash load networks. We provide bank suite programs for high yield FDIC accounts. In North America, we’re integrated to many banks, 8 card production companies, and all the payment networks.

Challenger banks

If you look at a company like Robinhood — the company recently launched its cash management product. We power all of that. Same thing for Chime. Its digital banking offering is powered by Galileo. These firms take advantage of our services via a set of APIs.

Galileo is going through phenomenal growth right now, mainly due to the growth of our clients. With the challenges around the pandemic and changing consumer behavior, we’ll continue to see a push into digital banking. The transformation was already underway. You really don’t need a branch — you have everything you need on your hand-held device.

Expanding globally

We’re headed to Latin America. We’ve live in Mexico today. We’re moving into Brazil, Colombia, Argentina, Uruguay, Chile, and Ecaudor. There are significant opportunities in Latin America. In Mexico, for example, you have 130 million residents with 50 banks total, but really 5 banks dominate. 90 percent of all payments are done in cash. Fintech can really democratize payments and make it efficient and create capabilities that don’t exist or aren’t widely available.

The SoFi acquisition

We have been successful in debit and payments. SoFi has been a very successful consumer-facing lender. The thesis under which we did the combination is taking the SoFi product, wrapping our enterprise-grade APIs around it, and making it available to our clients and their consumers beyond that. For me, that’s exciting. The SoFi acquisition is an accelerant.

One of the predominant ideas of our acquisition is preserving Galileo as an independent business unit. That way, we will focus on and serve the needs of our clients. It’s an Amazon/AWS type model. On one hand, you have this consumer business and on the other hand, you have a technology, infrastructure play.

Finance beyond the financial services industry

We announced last year that we’re in beta for Galileo Instant. We’re doing a full public launch later in June. It removes much of the friction around offering payments — it’s perfectly designed for a gig economy marketplace. Since our announcement, we’ve had 450 inbound companies express interest in it.

The use cases are interesting. I have a neighbor with a large steel company with 10,000 welders. He asked me if I had a product that could pay the welders by the weld. I responded, if you give me a few months, the answer is yes. This isn’t a company that wants to be a fintech — they just want to make a payment and incorporate it into some type of business logic.

With its YouTube platform, Google needs to pay its 23 million influencers for the ads they’re running. It’s another good example of the need for something like this.

It could take months for companies to create a payment product. In a recent meeting with a payments network company, we onboarded a business, ran through KYB, onboarded a gig economy worker, and ran through KYC. Then we did an actual payment — we purchased a virtual gift card. Then, we went out on the street and bought something at an unrelated merchant. The entire thing took 23 minutes.

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