TabaPay CEO on the Moat AI Can’t Replace

To last in fintech, it pays to have a moat that makes it hard for newcomers to replicate your success. TabaPay’s moat, built on banking, compliance and relationships, is pretty wide. And when AI is collapsing the cost of building software, co-founder and CEO Rodney Robinson argues those three things are the only ones that still matter.

TabaPay’s origins date back to the early 2010s, when Robinson and his partners sold a disbursement company to Mastercard. During his two years running that company post-sale, Robinson heard from customers who wanted additional services like collection and account funding. He took the idea to Mastercard, but the company wasn’t interested.

“This was a big problem that needed to be solved,” Robinson recalled. “It’s as old as time. If you listen to your customers and solve the problems they have, you grow as a business.”

The technology, it turned out, had been a long time coming. Robinson laughed when asked whether the infrastructure was ready to do what he envisioned in 2013, and said he had begun working on instant transfers back in the late 1990s. Early this century, he partnered with a regional network on farmers’ insurance disbursements; Mastercard and Visa joined the network only after seeing the case proven.

“We didn’t discover it, but we gave them the business case to do it,” Robinson said.

That business case is now a category. Instant payments are available around the clock, processed in real time and quickly available to the recipient. Rails like Visa Direct and Mastercard MoneySend work best when the recipient’s debit card information is known. More than 162 financial institutions are live on TabaPay’s system. 20 of them are enabled to send funds. Combined, they provide real-time payment capability to 61% of US demand deposit accounts. 

What TabaPay sells is the money movement that other companies build their businesses on top of.

“What we enable is this ability to accept and send funds and collect funds, at low cost, low risk, and instantly,” Robinson said. “Round-trip, two-sided, instant, low-cost, low-risk payment is what we’re good at. We do it better than anyone else in the country. We do it much more than anyone else in the country.”

Consider three industry problems these rails have helped solve.

The first is earned wage access (EWA). Robinson said this is where payroll is quickly headed. However, there is still much room for growth. TabaPay processes more than 100 million EWA payroll payments each month. As impressive as that is, it represents 30 million of a possible 170 million US workers. 

Many employers offer EWA, but TabaPay, as a licensed money transmitter, can offer EWA directly to employees. In some cases, employers only recognize the value after their own workers register for it. 

“Consumers now can get paid every day without any fees because the employer is offering it as a benefit,” Robinson said. “[Before EWA], people had to work and pay interest on loans. Now they have everyday liquidity, so they don’t need a loan, and the payday lending industry has crashed. We changed it so the finance system works for them.”

The second problem is money transfers between traditional and digital banks. Digital players like Chime let customers transfer funds instantly and at low cost and no risk. These are capabilities that depend on rails like TabaPay’s. The result is that digital banks can offer more, and their customers can do more with their money. 

The third is tipping. Enabling it instantly via credit card takes plenty of work under the hood, including facilitating the ability to instantly accept and transfer payments, as well as integrating with the receiver’s general ledger.

Fintechs deliver value through risk modeling, with each one solving a specific problem. EWA tackles risk, tipping solves distribution, and TabaPay enables the money movement beneath both. Together, Robinson said they have created a huge industry which was non-existent 15 years ago.

“Every company solves something, and they use our payment system to help them enable their industry,” Robinson said.

Though, with a growing number of payment options, is designing a single-use API becoming a harder task?

In a word, no. Robinson’s response is that all APIs are essentially the same – they send payments and collect money. 

Where they differ is behind the scenes.

TabaPay’s API connects to 20 American banks with send capabilities across two countries, runs at high speed with ledger capacity for 700 transactions per second, and positions TabaPay as a direct processor.

Which brings the story back to the moat. AI now helps companies fight fraud with fewer people, and Robinson said TabaPay likewise identifies abnormalities in money flow. That could be a fraudster repeatedly using the same card, deploying multiple identities through the same device, or sending large flows through a card. 

But as AI simplifies software design, firms in this sector need new differentiators, according to Robinson. TabaPay has three: unique banking capability, strong compliance features, and extensive relationships.

“This is what matters now; software just implements what your back office does,” Robinson said. “You can’t replace our business with AI; you need a whole bunch more stuff.”