Unbanked financial product developer Plastyc Inc. announced today that it scored a $2 million investment compliments of Core Innovation Capital, the investment partner of the Center for Financial Services Innovation.
Plastyc says it will use the funds to expand its existing services, as well as grow out its product set for financial institutions, believing that the need among the unbanked for “responsible financial services” products is only trending higher.
Plastyc first hinted at this investment in a January SEC filing.
Plastyc offers iBankUp, a money management service that it demoed at Finovate’s conference in New York last fall, as well as the Upside line of prepaid Visa cards. Though its early audience targeting roots focused on the youth market, it has subsequently opened up its services to include, well, everyone.
“It was pretty clear we could help beyond teenagers,” Patrice Peyret, chief executive, told Bank Innovation today. Peyret says his company is essentially in the prepaid space, with a goal to provide as much “full-blown replacement” for banking as possible.
Here’s what is on the development slate for Plastyc:
- The “obvious direction” the vendor is taking is offering users more flexibility in dealing with savings through its services, not just checking; and
- Offering a white label version of its products to financial institutions. Peyret sees market potential in light of regulatory hurdles inspiring banks to look into providing prepaid cards. Why? With banks charging monthly fees in the $5 to $10 neighborhood for checking accounts, prepaid cards offer a cheaper alternative for consumers who may bail on their checking accounts. The key to success, he said, is ensuring that consumers do not lose any functionality upon making the switch.
Editor’s Note: This post was updated on 2.7. Peyret says his company is not going to sell another $1.5M worth of shares on top of the $2M purchased by CoreVC. Rather, it has authorized more shares than it has sold to allow for conversion of possible future debt and warrant instruments.