YC-Backed Standard Treasury Aims To Make Software That Eats Commercial Banking

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Standard Treasury, a YC-backed company, is hoping to make it easier for businesses to deal with their banks through standard APIs that ease transfers and other transactions.

The company says that integrating banking services for small businesses and startups is overly complicated. They can end up sending large files over FTP with specs that take up hundreds of pages.

Co-founder Daniel Kimerling had this experience when he was building up his last company, Giftly, which let people send gifts on the web and mobile devices to each other without affecting the point-of-sale systems at local merchants. They had to build up their own infrastructure to interface with the banking system to manage peer-to-peer payments.

“The existing model for bank-enterprise relationships hasn’t changed since the 1970s,” Kimerling said. “Banking is really painful. We have customers that ask — why can’t banking be like Stripe or Braintree?”

One issue is that banks generally don’t create their own software; they buy it from other vendors like FIS Global, a $13 billion publicly traded company that sells banking and payments technology.

“It turns out that every banker also hates their technology. They rarely homebrew their own technology. They usually white-label it from someone else,” Kimerling said.

So Standard Treasury is building middleware that allows a bank’s customers to programmatically interface with their bank. Their first product today is a RESTful API that processes electronic checks, book transfers, account opening and closing and foreign currency quoting and execution. They will also build webhooks for posting transactions.

While the company can’t say which banks it is partnering with, it is conducting pilots with one of the country’s five largest banks and is working with several other mid-size and regional ones to launch their own API platforms.

The two co-founders, Kimerling and his co-founder Zac Townsend, have known each other for more than a decade and this concept was pretty much their first idea when they applied to and got into YC. (They experimented with a few other ones, but kept returning to this one.)

Townsend also has some payments experience after working briefly at Stripe, one of the other up-and-coming YC companies to watch out for after hits like Airbnb and Dropbox. Townsend also worked on technology policy for Newark Mayor Cory Booker.

The pair spoke to hundreds of co-founders, CFOs, and VPs of Finance at different companies to figure out what they wanted from their banks. APIs for the most basic services like transfers are the beginning, but Kimerling and Townsend want to eventually build out a full stack of bank technology, including “core” banking and systems that can report back who has how much in their accounts.