Fintech innovators have been inspired to reshape the way modern banking and payments work. “Why? To solve a problem,” said then-St. Louis Fed Executive Vice President Julie Stackhouse during a recent Dialogue with the Fed event.
“Over the course of particularly the last year and half, I’ve had a chance to talk to quite a few financial technology entrepreneurs, and each story is a little different,” Stackhouse said. She provided examples of entrepreneurship in financial technology (fintech).
Stackhouse described how now-St. Louis Fed Board of Directors Deputy Chair Jim McKelvey was inspired to invent the Square merchant payment system after losing a sale at his glass-blowing factory. At the time, his gallery only accepted cash or check, she said.
Another innovator, Quinten Farmer of Even Responsible Finance, came up with a new way for employees to get paycheck advances.
“Payroll systems every two weeks, when you’re living paycheck to paycheck, are archaic. And if you need cash before payday, the tendency is to go to a payday lender,” she said. Stackhouse explained how the Even Responsible Finance tool enables workers to borrow against their earned wages, and Walmart pays the fees.