Up and Away: Growing Tuvoli’s Online Platform through Embedded Banking
When Sandeep Dalmia co-founded Tuvoli, a B2B platform for the private air charter industry, he decided to take a page from his days at eBay and PayPal, with an eye to the future of financial services. He integrated digital payments and embedded banking capabilities into the platform, working in partnership with banking as a service (BaaS) provider Treasury Prime.
“When eBay acquired PayPal, sales on the eBay platform skyrocketed. At the end of the day, your marketplace platform is not complete until you have integrated a payment solution.” Dalmia says. “With PayPal, all you need is your email address, you never have to worry about sharing your information, that’s all there is to it. So we wanted that built-in payment capability for Tuvoli as well.”
Within Tuvoli’s embedded banking platform, private aircraft brokers can source itineraries for their high-net-worth clients and arrange ancillary services as well; and operators can quote the itineraries and manage trips. Operators can also invoice brokers for the trips and receive funds from them. The platform facilitates instant payment between all parties. This is a game-changer for the industry: a payment process that used to take up to 30 days to finalize, can now be initiated instantly on Tuvoli and completed within hours after the conclusion of a flight.
Tuvoli was able to roll out its payment product in less than three months using Treasury Prime’s APIs and expects to handle over $200 million on its platform in 2021. Here’s how this was achieved.
The need for embedded banking
Tuvoli needed the ability to process high dollar amounts between charter brokers and charter operators. Each journey on their services marketplace can involve multiple transactions in the ecosystem—from purchasing fuel to booking flights—netting on average $25,000 per trip.
The whole ecosystem is tied to the banking platform, where Tuvoli establishes an FDIC-insured bank account for every user and facilitates electronic funds transfer between any two parties around the clock. Compliance measures are in place to detect fraud or regulation violations.
Tuvoli was also able to introduce the concept of guaranteed payments for air charter flights, where the buyer can put funds into a separate staging account between the time the trip is confirmed, and when the journey concludes.
“What is the cost of doing business 24/7?” asks Dalmia. “Our current environment shows while businesses run 24/7, banks don’t. As a result, the cost of doing business after-hours is the interchange fee you pay to the card issuers. We want to minimize this cost while enabling businesses to focus on what they do best – sell and grow.”
All this is possible because of the relationship that Tuvoli has established with Piermont Bank through Treasury Prime.
“I was skeptical to begin with, thinking, who would I go to when there is a problem? Those questions were all resolved as we went deeper into the process,” Dalmia says. "I think it has worked out phenomenally.”
Finding the right Baas partner
Treasury Prime was not the first BaaS partner that Tuvoli worked with. They launched with BBVA, but after the bank was acquired by PNC, BBVA shut down its Open Platform, and clients such as Tuvoli had to scramble to find other BaaS providers.
“We went back to the drawing board and we talked to a bunch of banks who were interested in partnering with us. They said all the great things that we wanted to hear, but when it came to technology, they didn't have what we needed. And when they quoted us, the rates they quoted us were in some instances 10 times what we were paying.”
Having learned from the experience with BBVA, Tuvoli no longer wanted to be tied to a single bank. With a BaaS provider like Treasury Prime, the fintech can connect with multiple banks.
“It gave us flexibility. If we want to leverage another partnership for certain products, we can look at other banks in the Treasury Prime portfolio and integrate them without having to do a migration because it’s the same API system,” Dalmia says.
The company entered into a partnership with Treasury Prime and began development work in mid-April. The migration had to be completed quickly to prevent any disruption to the service for its existing customers. The due diligence process wrapped up quickly, and the integration continued full steam ahead. By June 1, they had the production keys and were able to go live.
“We just had to shift everything from the back end and point it towards Treasury Prime’s APIs,” Dalmia says. “The technology I thought was very mature. The documentation was well laid out. There were no major red flags.”
One factor that helped with the speedy integration was that Tuvoli was ready with all their AML policies and their BSA compliance materials in place. When any issues were encountered, Tuvoli worked with the Treasury Prime team to remove obstacles and find solutions promptly.
“Jim Brusstar, the president of Treasury Prime, was very instrumental in listening to us. And he incorporated the changes to their APIs for us in a timely manner.” Dalmia says. “We appreciated the agility with which we were able to work with the Treasury Prime and Piermont Bank teams to get us transitioned over to their APIs”.
Central to any embedded finance platform is the ability to open bank accounts and run compliance checks. While compliance may not be top of mind for fintech companies, it can make or break your business. Treasury Prime partners with leading vendors including Alloy to provide compliance support to Tuvoli and other fintechs.
On Tuvoli, every time a business applies for a bank account, they must provide beneficial ownership information, which includes anyone who owns 25% or more of the company, and each beneficial owner must pass the Know Your Customer (KYC) check. Once that is approved, Tuvoli has to conduct a Know Your Business (KYB) check to verify the business registration, EIN number, articles of incorporation and more, to ensure that the applicant is a legal entity and not a shell company.
“This used to take a long time. Now we have the benefit of performing the checks in real-time. As soon as an application gets submitted to us, we submit it to Treasury Prime and Alloy. If there are no flags, it automatically kicks back approval within seconds. If there is a flag, we can evaluate it and identify the problem quickly and correct any mistakes. The evaluation runs instantly, and kicks the approval back to us,” Dalmia says. “Now our accounts get approved within minutes compared to days before.”
What does the future of banking look like?
Now that the integration is complete, Dalmia has ambitions to bundle next-generation banking and payment products to enhance the Tuvoli platform and make it the one-stop-shop for all payment needs in private aviation.