Update on the disbursements market with Dash Solutions CEO, Stephen Faust

Welcome to another Tearsheet LinkedIn Live session. Joining me is Steven Faust, Dash Solutions CEO. Earlier this year, Prepaid Technologies rebranded as Dash. The company moved into a new corporate headquarters in Birmingham, Alabama. The company serves clients with 4 modalities: disbursements, rewards, spend, and pay.

Stephen and I discuss the company’s rebrand and how that’s impacting the business. We discuss organic trends in the modalities where the firm competes. Stephen shares how Dash differentiates itself from a growing number of competitors and the impact the macroeconomy is having on his firm’s business.

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The following excerpts were edited for clarity.

Introduction

My name is Steven Faust. I'm the CEO of Dash Solutions. For a very long time, we were named Prepaid Technologies, and recently went through a brand change to Dash Solutions. Dash was our product brand, and we leaned into the solutions that we were providing for customers combined with our Dash brands and became Dash Solutions this year. So that's really exciting. We moved it to a new corporate headquarters here in Birmingham, Alabama. We also have an office in the Empire State Building in New York. We have a diversified team in many of the states and cities around the country and in southern Canada. 

Our best solution is a technology platform that we've been building over the last many years. And through that platform, it allows businesses to configure payment solutions for various needs, and we bucket them into four modalities: disbursements, rewards, spend, and pay. We've got over 100 bank approved models in those four different modalities. And then as we like to say, kind of endless customizations thereafter, so that we can present a brand feature set based on what our customer needs for their payout. And it's all payouts using the prepaid Visa, MasterCard and Discover rails. And, but as we all know, it's transitioning to a more digital first approach, and we're really leaning into that with the technology we're building. 

Me, personally, I grew up in New Orleans, married, I have three kids. I live now in Birmingham. I've been working in this business since I was seven. So I've been in the payments world and fintech for a long time. And it's been fun to ride this roller coaster and payments over the many years. It's been super exciting. 

Our company has had a lot of success. We brought on a minority investor in 2016, and then we raised a larger round with Edison Partners in 2021. And Edison has been a great partner, and they too have a lot of proficiency in payments. So we've got good partnerships, we're leaning into technology, we've got an unbelievable team, and really just going after some of the exciting opportunities in the world, in those four modalities, and a lot in the disbursements category.

Use case: A university

What helps differentiate us is that we're able to go into a big company and say, Hey, you may have a vendor for all these different things, but we can be a single solution technology provider that can help you. A good example of someone that uses multiple products and solutions for us is a university. We can provide pay cards for their underbanked staff. We provide spend cards for all their student athletes, managers, band members, cheerleaders, and coaches, as they travel all over the world and do different things with real time money movement and accountability. We work with their hospital systems and do research payments for clinical trials or other research that they're doing in the university, as well as the hospital. We can work with the bursar's office and do emergency payments and payouts and other disbursements that they need. 

Trends in the business

If you talk about the pay world, post-COVID, gig economy, different ways that businesses are looking to transition the way that they pay people, from digital first distribution of a payroll card solution to real time payments, early wage access, and other benefits that we can provide on top of the traditional payroll card, like employee benefits. We're seeing the growth there, and have creative strategies to serve markets in agriculture and others that have been challenges in the past and provide them the solutions they need to operate their lives.

We are seeing a lot of companies very much lean into the marketing side of their business to grow. We not only have more incentive payment solutions, but we made the acquisition of a company called WorkStride, which is part of our technology platform now, that has leading tech when it comes to systems that allow for employee recognition and engagement. We know that it’s become hugely important after COVID to channel incentives management in sales. That provides platforms where people can be trained on certain things, like interaction with staff, recognition for good behavior, all those type of things which also lead to payments on the back end. Big companies are focused on that, because it's important to driving sales and driving retention to their staff. So that's kind of what's driving that line. 

On our spend business, we've built a pretty sophisticated expense management system that kind of leads into like college per diems, and other stuff like that. Our system was geared for small to medium sized business, and we're going through aggregation to find those markets. We work with Lowe's, for example. We've got an expense management platform that Lowe's makes available to all the small businesses that come into their stores and it provides some oversight, real time money movement, discounts at Lowe's, and all these good things. 

Probably the biggest line that we're focused on and most excited about is the disbursements category. What's really driving that is the trillions of dollars of payments that are hung up in very big companies, governments, and so on, that are moving out in a very antiquated and cost heavy model. We can come present a digital first solution that can eliminate those costs, drive efficiency in their business, and more importantly, provide an application to the end user that is very modern, very easy to use, provides all the choice and branding feature set that the business requires, and can generate income. So we’re really flipping that model on its head, where we can go to really large payers and say, hey, you can take a very high cost, not very efficient model, and transition it into something that saves you time and money, provides you immediate greater oversight, reduces your liability and obligations, generate income, and at the same time, delight your customer. There's so much opportunity there – that's really exciting to us and really driving that payment modality in our business.

Drilling down into disbursements

If you ask different people in the payments industry what disbursements are, you're probably gonna get 10 different answers, because it's such a big omnibus classification of what this type of payments is. We are looking into our big addressable markets that have needs and have antiquated systems that our technology and solutions can solve for. 

Speed in vertical disbursements

There are systems, as a consumer, with these very big companies and in systems and governments or whatever, that if you get a payment four months from now, you're taking that as a win, you know? They set the bar super low, and they haven't updated in decades. If we are able to take information from a customer through an API or a file upload, and correspond with you immediately, it’s a game changer. So they're not looking to take it from four months to seconds, but we're able to provide them a faster turnaround and that's huge, because it totally changes the way they look at things.

Because even if you talk about real time payments and faster ACH, that assumes that your whole population is banked. And when you're talking to a major payor, that's touching everybody, they can't assume that. So providing a solution like this, and a one size fits all for their whole population, is pretty cool.

Rebranding Prepaid as Dash

It's funny – I just ran out of our mid year planning meeting touchpoint with our executive team, fine tuning things for the second half of the year. The year has been going great. We had a lot of momentum working on some major program initiatives with big companies this year – we've gotten those launched and are seeing good results. After you take a major investment, there's always kind of reorganizing teams. We quickly grew our staff by about 30%. We did an acquisition in the middle of that as well, so aligning those resources and getting everybody focused in the right direction, we can see all that happening. And it's pretty fun. And there's a ton of excitement around. Not only the success that the company’s having, being a fintech company in the southeast that's kicking butt is pretty fun, but also because they're seeing the momentum around that. Edison's leaning into that a lot. 

Coming into the new brand, we moved into a new corporate office in Birmingham. We put our name on the building. So there's a lot of buzz in the city about what's going on with the company. 

Looking ahead

And for the second half of the year, it's really about focusing. We're working on major initiatives with FIS, our partner from a processing and a go to market standpoint. We've got some really cool things, next iterations of our disbursements tech that we're launching and bringing to market, so it's a constant investment in research and development, technology and product development, refocusing teams on new verticals. One of the biggest challenges we have is that we have too much opportunity, and it's like, where do the biggest addressable markets really take the company? Those are good problems to have.