Bringing Banks Into the Digital Future with Glendy Kam of Tassat
Are you interested in learning about decentralized payment solutions for banks? In this episode of PayPod, host Jacob Hollabaugh sits down with Glendy Kam of Tassat to discuss the benefits of implementing private, permissioned blockchain technology in the banking industry. Tassat Group, Inc. is the leading provider of private blockchain-based, real-time solutions for commercial banks. Watch this episode for a fun and interesting dive into this latest development in payments and fintech.
Payments & Fintech Insights In This Episode
- Tassat is offering a private, permissioned blockchain, unlike public blockchains like Bitcoin and Ethereum.
- Tassat integrates with existing core banking platforms of banks while replacing legacy payment capabilities with instantaneous payments on blockchain.
- B2B payments are lagging behind consumer payments in terms of innovation, but the B2B payment market size is significant and projected to double by 2030.
- Tassat’s target customers are medium-sized and regional banks that are still using legacy payment technology, and they aim to connect these banks together.
- Tassat facilitates payments as a payment rail, with tokens serving as payment instructions on the blockchain.
- Tassat’s solution is different from stablecoins as it is 100% backed by US dollars and the backing is held in the bank’s account.
- And SO much more!
Glendy Kam : Tassat
Tassat Group, Inc. is a N.Y.-based technology company that is the leading provider of private blockchain-based, real-time solutions for commercial banks including TassatPay, which enables banks to provide their corporate clients with instantaneous, secure, real-time payments 24/7/365. TassatPay has become the most trusted blockchain-based platform for the banking industry and its B2B clients with more than $1.3 trillion in secure, real-time transactions to date. Tassat has added Smart Contracts and Fedwire functionality to make TassatPay a one-stop shop for B2B Payments. Tassat was honored with a 2021 Google Cloud Customer Award for innovation in financial services.
Featured on the Show
PayPod is the leading voice in the payments and fintech industry, covering payments, risk management and new technology. Host Jacob Hollabaugh interviews leaders who are shaping the payments and fintech world, as they discuss the latest developments in the payments and fintech industry.
Jacob: Welcome to PayPod. The Payments Industry Podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world from payment processing to risk management and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show we are talking about bringing banks fully into the digital future, how they can more seamlessly connect to the ever growing digital economy and essentially how they can avoid being left behind by new technologies and new ways of powering the movement of money. Joining me to discuss these topics and more is Glendy Kam, chief product officer at Tassat, the company that transforms your bank into a high growth financial services powerhouse. Glendy, welcome to the show. Thank you so much for being here.
Glendy: Hello, Jacob. Thanks for having me.
Jacob: Yes, the pleasure is all mine. Before we get into Tassat itself and all the incredible things you have going on there, I want to make sure that everyone listening is well. As myself, in all honesty, has a good grasp on the technology and what it is that we’re going to be discussing today. So before we get into your blockchain based platform, can we start with just explaining in general what the blockchain is, what you mean when we probably continually reference the blockchain throughout this conversation?
Glendy: That’s a good place to start the conversation. So Tassat started as a blockchain payment company. We are offering blockchain technology to banks, so what we’re doing is we basically offering a distributed ledger technology capabilities to the banks to be able to put some of the functionality capabilities for the corporate clients, to use blockchain technology to offer a much better service and more powerful functions for them to handle their B2B payments.
Jacob: Makes sense. And I know with blockchain tech, there’s public blockchains that are most of what general consumers would have heard about or think of Blockchain might be thinking of a public version, but then there’s also private blockchain, which I believe Tassat is running on the private type. Can you explain the difference between those two and why Tassat goes the private route?
Glendy: Yep. Yep. So public blockchain I’m sure everybody have heard like Bitcoin, Ethereum. There are a lot of them out there. A lot of the crypto capabilities on public blockchain, but what Tassat is offering is private, permissioned blockchain. The reason we’re doing it is because we have been working with FDIC insured banks. We’re offering this technology to the bank so private, permissioned blockchain makes sense for them because banks need to protect their clients. We’re offering technology, not just a technology as a technology vendor, but also making sure that banks are protecting their clients. We are protecting the banks. The information in a private permissioned blockchain is only residing on the blockchain like the address of the wallet on the blockchain. It only useful within the private permissioned blockchain. Even someone took the address of a wallet. They can’t use it outside of the private permission blockchain. So it is really a closed system that the banks know who are the players, who are the actors on the blockchain. And so everything is KYC and everything is completely in compliance to the bank’s regulatory.
Jacob: Yeah, that’s awesome. And yeah, it makes perfect sense then that’s kind of a mixing of the two worlds of all of the advantages, the new technology of blockchain offers, but keeping that security element that is obviously central to what the banks are doing in central to us consumers of wanting to know that we’re concerned about privacy in a lot of ways, but certainly chief among them is our financial privacy in working with the bank that we think is secure when it comes to the banking world in general, then what kind of legacy technologies are you going replacing essentially with this blockchain? Basically, what is it replacing or interacting with in the banking world?
Glendy: So we are interacting actually both of them. We are interacting with some of the bank’s existing core technology because we actually integrate with the bank. We integrate directly into a lot of the core banking platforms. But of course at the same time we are replacing the payment capabilities, some of the legacy payment capabilities that bank are using with their existing B2B payments such as Wire, ACH or something similar to that and cheques of course, and then we replacing it with an instantaneous payment on blockchain.
Jacob: Yeah. And tell me why B2B first, the focus it sounds like and you just referenced is on helping them with their B2B clients. Was there a choice made there? Was there a reason behind focusing on that first?
Glendy: Yes. So we started with the B2B payment because in the P2P space, I’m sure that very interesting is if you look at the consumer and the retail space, the payment technology or the payment capability or even innovation is way ahead. B2B payments are really lagging behind. And also people don’t realize the B2B payment market size is actually really big. Last year, I think 2022, it was already just B2B payment. Market size is over 1000 billion and it’s projected to reach double by 2030. So right now there’s still a lot of US companies, they’re using legacy payment rail or. Cheques to make payments. So when real time payments incorporated into the corporate treasury function AR/AP workflow, it will significantly enhance the operation and cash flow management. This is the reason why we started with B2B payment and we want to create a payment solution first with our bank’s corporate clients.
Jacob: Yeah, it’s been a very reoccurring theme of late. A lot of our recent guests have been working in the B2B world for the same reasons you kind of outlined of. It lags significantly behind where the B2C world is, and there’s a lot of reasons for that that make perfect sense of why it has been. But it is this huge market, and when one sector lags behind the other, that means a lot of opportunity to help them get caught up and bring technologies that can help them do so. I’d love to know from Tassat’s perspective what the thought process was behind your kind of acting as this bridge. You’re providing FDIC insured banks with the tools to compete and win in this new digital economy instead of I don’t know if there was ever a thought behind, but you could have taken the route of instead of helping those existing companies and being that bridge for them, you could have been the disruptor who tries to, you know, be the bank themselves or anything. So was there ever a thought process early on or is there a reason or kind of philosophy why you want to be focused on this one thing, be that bridge for these existing companies versus coming in and being like, we can do this ourselves. We can be the bank ourselves.
Glendy: We have not really contemplated to become a bank because we actually think that providing this technology to help the banks is more valuable at this moment. And also the medium size and the regional and community bank is actually our target customers. There are so many of them and right now a lot of them, they are still on very legacy payment technology. So we think that be able to help the banks and also be able to connect them together. And that’s the reason why we launched the Digital Interbank Network last year. Be able to connect them together to create much more powerful payment network, instantaneous payment network on blockchain, which offer a lot of other value added services because of the technology is a much better solution.
Jacob: Can you explain the digital interbank network that you just referenced? You know, we launched last year what exactly that is and kind of the purpose of it, the power that it has?
Glendy: Yep. So when Tassat first started, we started with an intra bank instantaneous payment solution and then we recognize many of our bank clients are also looking for ways to send to other banks. So digital interbank Network is a blockchain solution which connects the private permission blockchains that we offer to our banks to be able to connect and transact with each other. So now, once they’re connected to the digital interbank network, they are no longer limited to just transacting among their own clients within the banks. They will be able to transact with other customers at another bank. So the digital interbank network not only allow our client banks to be able to make payments with each other because of the blockchain technology, it will also be able to leverage the many powerful capabilities blockchain offers to support their payment processing.
Jacob: Yeah, it’s really very, very impressive. And you built your own rail system to replace the old legacy ones and you’re doing instantaneous payments. So within that, are you handling money yourselves or are you just you’ve built the rail system to connect the right people to make this happen? Or what’s the flow of money look like in this instantaneous network you’ve built? Yep.
Glendy: Back to the earlier questions that you asked. We’re not a bank, so we’re not really handling the money ourselves. So we facilitate. We serve as a payment rail or basically the tokens that we put on the blockchain is merely a payment instructions that help the bank to be able to transact with each other. So the token actually carry information about the dollar amount and also who is coming from, who they are sending to complete payment instruction, plus a lot more data that can be right on the blockchain, which is an immutable technology so that they would be able to travel with the payment. This is something that I think blockchain technology offer a really powerful solution to a lot of the existing payment frictions in corporate payment processing.
Jacob: It seems to me, and from all the conversations we’ve had on this show as the the best case technology to use to get what everyone is looking for, which is speed. Finally, at long last, as someone who kind of grew up through the digital revolution, I’ve been one of many consumers out there for a long time. That’s like everything in my life moves really fast, but it seems like money still doesn’t like why is that right? And it has definitely been the the hottest. All the trends of recent in the financial world can come back to one thing, and it is that people finally are demanding speed. And I’m with you and with your company. It seems certainly that blockchain is probably our best route to. Incorporating that speed really, really quickly. I’d love if you could walk us through kind of a full blown example of how this all works. Like a hypothetical, you don’t have to use an actual name of a client or bank or anything, but a hypothetical bank and a corporate client of theirs. How that corporate client would be using this, the type of payments that would be going forth. Kind of paint a picture for us of what that actually looks like in action.
Glendy: Actually, we have a lot of use cases with our clients because the blockchain technology that we’re offering to the banks allows the client to tokenize their deposit and then be able, once it’s tokenized, then the token travel on the blockchain 24/7/365 without touching the core banking platform. And then finally, when the tokens arrive at the beneficiary’s wallet, they would be able to redeem it back to US dollars. So our solution is really a tokenized deposit solution. So we take the US dollar in the client’s wallet, make sure that it is protected by the bank. So that’s why the tokens is always 1 to 1 backed by US dollar. This is a very important paradigm of our platform and then once it’s tokenized, it travels on the blockchain from one wallet to another, from one customer to another customer. And finally, when the client wants to convert that token back into US dollar because the original money was already protected by the bank, it’s sitting somewhere the banks actually keep track of. Then they would be able to just convert it back and deposit back into their account immediately.
Jacob: Wonderful. So they don’t have to worry about the conversion rates of, Hey, this is going from USD to are you using Ethereum or what is the token based on?
Glendy: Thank you for bringing that up because a lot of people are confused between also is this a stablecoin solution? It’s absolutely not, because I’m sure you’re aware a lot of the stablecoins out there. They are backed by US dollar equivalent or money equivalent, but it’s not 100% US dollar. The solution that offer is 100% backed by US dollar and the US dollar backing the token is actually sitting with the bank in the bank’s account. So that is the reason why we wouldn’t even consider this as equivalent to a stablecoin. This is really tokenized deposit. We’re just using the technology to make the money movement, to make the value transfer more efficient and also be able to leverage the technology to put better experience and put some logic and workflow and processing on top of the payment.
Jacob: Yeah, I love it. And back to what I had referenced before, it seems like just such a great merging of as these new technologies have come out and the first use cases for them that people hear about sometimes can be like, Oh, that sounds impressive, but it also sounds scary or I got to worry about this or that, and this seems like such a great merging of word. We’re giving you everything you’ve come to expect and need and want in these types of services, but we’re leveraging the parts of the technology that offer us ability to do this better or faster and not leave you worried about checking the conversion rates of your stablecoin or whatnot throughout the day to make sure that that payment you just made is actually going to be the full amount or less or whatnot. So final topics I want to kind of get into. Here are a couple newer offerings from Tassat and maybe a bit of what the future holds for the company and the industry at large, starting with the fact Tassat recently introduced smart contracts and fedwire functionality and has stated that you’re going to serve as an on ramp to FedNow when that rolls out, which hopefully fingers crossed that’s in the near future. We we still don’t have an exact date or no, but we’ve heard summer of this year, so maybe sometime soon. But you’re going to be kind of the on ramp to that. Can you walk me through what these new services are and what they kind of change about your offering?
Glendy: Smart contract is really the most exciting. I love talking about that because it’s the most exciting offering. That is the reason why we want to put payment on blockchain. Everybody was like, There are other ways to make instantaneous payment. Why Blockchain smart contract is the reason why blockchain, like I mentioned earlier, making payment go faster. Of course that’s great, but more importantly is the payment experience. There are so many things that happen before a payment and there are a lot of things that happen after a payment. Those are like the payable services receivable services. There must be a story before why you make a payment and there are a lot of things you need to do after the payment. Smart contract would be able to come in and facilitate a lot of the servicing. So this is what we are doing. On Smart contract. We already got the payment, instantaneous payment on our platform. So that’s the reason why the next set of capability we’re building is for the smart contract carrying business logic intelligence workflow on the payment so that they would be traveling with the payment and all these processing is actually executed and monitored, governed by the blockchain. So it eliminate a lot of the manual process in our current corporate treasury management, corporate services, we can put it all on the blockchain and let blockchain take. Care of that. So we completely automate some of these services.
Jacob: Yeah. And the B2B world, as we’ve said a few different times now, certainly needs is in need of a lot of that automation and so it makes sense working in that world. Why this would be, you know, I love that you tie it into like this is the reason for there are other ways to move money faster, instantaneously. But this one offers us the secondary benefit of building out the technology to serve other areas within that payment chain.
Glendy: FedNow is also an instantaneous payment platform. We are the showcase partner of FedNow because we actually see we are a complement to FedNow. FedNow offered the fast settlement of payments, but we are offering the capability to support the logic, the workflow and the intelligence on top of that payment. So we actually a very good complement to FedNow.
Jacob: Yeah, and I’m hopeful we’ll see that roll out very soon. And I’ve said a few times in past episodes of this podcast, I’m really hopeful that it is also the final inflection point or tipping point too. There’s been a big build up in moving money faster, bringing speed, bringing instantaneous, and I’m hoping that FedNow roll out will kind of be that tipping point where things start to move really, really quick as far as adoption and everyone getting on board and using services like the ones that you have to offer. The other recent expansion I’ve seen from you is the announcement of a multi-currency offering. What’s that expansion process look like? I’m sure that’s I mean, that’s a big undertaking to go from the single currency to multi currency. So what’s that kind of look like for you and what potential does that bring you?
Glendy: Oh, it’s got huge potential. That’s why it is a very large initiative for us. So we are rolling out our multi-currency wallet, so we build out a capability on the blockchain to support multi-currency. So right now Tassat only support US dollar, but going forward we would be able to allow our bank customers to be able to offer other currency wallets for their corporate clients. So right now this is already like a lot of corporate clients, they may have like foreign currency accounts or multi currency account with the bank, but then if your blockchain solution only looking at your US dollar accounts that really limit that capability so multi-currency on blockchain allow them to be able to transact from more than just US dollar to US dollar. Now you can transact from a yen wallet to a yen wallet or euro wallet to euro wallet. This is also the first step in our much bigger roadmap to open up the possibility of ethics transactions in the future.
Jacob: And that’s the leads me right into my final question that I have for you then looking ahead to the future, maybe let’s just say the next 3 to 5 years or so, kind of short term future. Are there any specific goals Tassat is aiming for or maybe any specific trends in the industry that Tassat is watching closely to stay on the forefront of?
Glendy: Yes! Actually looking at the B2B payment trend overall, just in the industry, we can see three very obvious focus right now. Real time payment is going to become ubiquitous. Right now is not yet, but I think it will. So that’s why making payment faster is really important, not just for P2P. You know, a lot of the real time payment right now is P2P or maybe even B2C, right? But I think it’s going to be all over P2P, B2B, B2C space. The second one is Rich Data with payment. That’s going to become the foundational of all payments, because once you have the data with the payment, then a lot of the analytics, a lot of the information travel with the payments. So that’s also the reason why blockchain become a very important part of future payment evolution. So these are also some of the things that we are looking at, make sure that we are tied into these evolution of payment in the future. The third one is stronger customer protection in security to prevent fraud. It may be through AI, it may be also through, much more secure infrastructure such as blockchain, to be able to provide that to the customers.
Jacob: Yeah, that’s fascinating. And sounds like you got a lot on your hands, but you’re doing an amazing job handling it all and building this bridge to the future for all of the banks and all of us consumers that use them. So it’s been fantastic. Glen has been absolute blast. For those listening who may want to follow you or learn more about Tassat, keep up with all that you and the company have going on. Where would be the best place for them to go to do so?
Glendy: There are several places. Linkedin would be the first because through Lincoln. You will also find all our most up to date information, our news and our new product launch. So there are some very exciting product launch that is coming very soon. So definitely follow us on LinkedIn so you’ll get the most up to date updates.
Jacob: Love it. We will link to those and more in the show notes below. Glendy, thank you so much for your time and knowledge today. It’s been a real pleasure speaking with you.
Glendy: Thank you,Jacob.
Jacob: If you enjoyed this episode and want to hear more, head on over to sorbet.com/podcast to subscribe on your podcast listening platform of choice. That’s s o a r p a y. Dot com slash podcast.