Magazine article American Banker

A Fintech Shifts Gears to Virtual Cards

Magazine article American Banker

A Fintech Shifts Gears to Virtual Cards

Article excerpt

Byline: Penny Crosman

The fintech startup Regalii, which originally built technology to help immigrants pay bills back home, has pivoted. Under a new name, arcus, it is now helping banks reissue credit and debit cards to customers whose cards have been lost, stolen or breached.

The mission is to solve a problem CEO Edrizio De La Cruz encountered last year. He lost his credit card, notified his bank and received a new card in the mail seven days later. Meanwhile, he forgot to update his Time Warner and Verizon accounts and got dinged with two late fees. He also had to update his card number at Amazon, Uber and several other services.

"The process is quite tedious, time-consuming and expensive," De La Cruz said. "One in six Americans have that experience every year."

For banks, these episodes do more damage than may be apparent, he said.

"Typically when that happens, you as a consumer are reaching through your wallet and get the next card," he said. So a customer who has been using a Chase card for Uber might switch to a working Bank of America card. The bank could lose its top-of-wallet status permanently.

Once a bank loses its position as the dedicated card for a merchant, it is very hard to regain that status, he pointed out.

"The default payment is becoming king," De La Cruz said. "And if it's becoming king, you want the best tools to empower that."

Arcus has established direct relationships so far with more than 50 large billers in the United States. …

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